Does the "private national club" business model still work?

[Bart Bradley]

Can new "destination courses" be built in today's environment and be successful?

Bart

[John Kavanaugh]

Yes.  All it takes is a benevolent membership.  Look at all the happiness Jim Colton has received, bestowed and expressed through his membership at Ballyneal and tell me that is not working.

[JC Jones]

If the course is tops, everything else works itself out.

[Bart Bradley]

John:

I am not talking about courses that have been open for a couple of years.  What about NEW courses, ones that are in the planning stages now?

Bart

[Jud_T]

If your business model includes competing with some of the best courses in the country that still have openings, then, uh yes.

[John Kavanaugh]

John:

I am not talking about courses that have been open for a couple of years.  What about NEW courses, ones that are in the planning stages now?

Bart

The answer is still yes if you can find a benevolent membership.  What do you see different now than when Ballyneal or Nanea were built?  Maybe a club only has one, two or ten members.  Can part of a business model be doing something that makes you happy?

[Mike Sweeney]

If the course is tops, everything else works itself out.

Please list the National Clubs that you are a member of?

Thanks

PS. Just to make it easy on you, I belong to one National, one International and I dropped two. Oh and the National that I kept was the worst course of the rotation (6000 yard Doak 5, but I have been schooled by a Ross historian that I "don't get it") but my wife loves it and it has a low yearly nut that I don't have to worry about.

[TEPaul]

Bart:

Personally I think the idea/model has been a bit overused in recent years given the basic supply/demand equation for the type of members most of those projects may be looking for.

[JC Jones]

If the course is tops, everything else works itself out.

Please list the National Clubs that you are a member of?

Thanks

0.  Please tell me why that is relevant?

PS. Just to make it easy on you, I belong to one National, one International and I dropped two. Oh and the National that I kept was the worst course of the rotation (6000 yard Doak 5, but I have been schooled by a Ross historian that I "don't get it") but my wife loves it and it has a low yearly nut that I don't have to worry about.

Please tell me why that is relevant?

And, one of the Nationals you dropped this year had a net GAIN in members.  Foolio.

[Mark Chaplin]

Quality at the right price will always suceed.

Poor quality, the wrong price structure will always struggle, finally a really difficult to get to location has to be the best of the best.

[Mike Sweeney]

JC,

Nice deflection. If you take me on a Rater trip perhaps I will understand better when I pay my dues in January..........

[JC Jones]

JC,

Nice deflection. If you take me on a Rater trip perhaps I will understand better when I pay my dues in January..........

I wish we had an emoticon of a smiley face yawning.

Deflection?  Have you been drinking Mucci juice again?  I answered your question.

Answer mine.

[Mike_Young]

I don't know....

I think this will be an interesting year for many of the people that will be considered members for such clubs in America.  For example just this past Tuesday I saw several good friends that had properties which gave them net worths of a few million dollars and had always allowed for pretty good incomes.....new appraisals on shopping centers and apartments and the next thing you know these same guys are leaving clubs and trying to figure how they will even make it....and so many of these guys are over 60 years of age....I think the age of the developer as we knew it has passed and will not return in the same manner....this will be the year of commercial RE failures and IMHO many of the entreprenuers will take a harder look at such items as clubs....JMO

[Chris Johnston]

The easy answer is "Maybe" as it really depends on the costs.  Big ticket clubs will continue to struggle to find people, lower cost altrnatives will be fine.  Land costs are a key, as are new thinking on design fees.  New thinking is required.

There is a complete recalibration on costs. 

[Jim Jackson]

I think we all anticipate a slowdown in course construction in general, and certainly so in private national club.  However, I see the market as being intact, and suspect that as our economy bounces back that potential members will come out of their foxholes.  Let's face it, there are many, many more people out there, outside this DG, with love of great archicture and golf in general and the desire to play somewhere special like a national club, and I don't see that going away.  I for one looking for the right opportunity, down economy or not, in the not too distant future.  I forsee golf only and lower up front fees.  However, I read more and more about clubs like the outpost club and tourGCX (or whatever) and wonder if that is gaining any momentum.

[Mike Sweeney]

The easy answer is "Maybe" as it really depends on the costs.  Big ticket clubs will continue to struggle to find people, lower cost altrnatives will be fine.  Land costs are a key, as are new thinking on design fees.  New thinking is required.

There is a complete recalibration on costs.

  Big ticket clubs will continue to struggle to find people, lower cost altrnatives will be fine.  Land costs are a key, as are new thinking on design fees.  New thinking is required.

There is a complete recalibration on costs.  

Bingo.

The course I kept in the rotation was built in 1916. The debt was probably paid off in 1930. The club's balance sheet is the envy of America, and the men's locker room is about the same size as my first apartment in NYC.

It is a little soft, a little too green and a little too short (for 5% of golfers).

Pat Mucci is often right.

[Bill Gayne]

I think success is possible but there's a lot working in the other direction including a lack of confidence in the economy and the golf model, many of the aging baby boomers aren't looking to add clubs as they were ten years ago, the generations coming behind the baby boomers are fewer in numbers and as a group don't have the consumer confidence, air travel is becoming a greater burden, excess supply relative to demand, and if there's a residential component the problems grow exponentially.

It really does take an owner that has a vision and some deep pockets to see through the an extended start-up and some tough times.

To have a viable club that is solely based on national or international membership it takes a lot of like minded people coming together and being committed to a vision and experience over the long run. At present there is a lot more supply chasing demand.

[Sean_A]

I really don't know what the story is.  I often look at these national deals for folks with a relatively short window.  Guys making some cash by their 40s, but essentially getting bored or too old for this sort of thing by their mid to late 60s - lets call it a 20 year window.  The one way to avoid this type of reality is to keep the price way down and the course not overly difficult.  Are there national clubs/memebrships that do this and still manage to offer an attractive product?  My guess is yes, but that many are not well known - sort of like your run of the mill club which gets the job done without all the fanfare of a top 100 club.  Perhaps we shall see more "local" US clubs open up to national and even overseas members. 

Ciao

[Bruce Katona]

The lead person in the venture must:
1. have very deep financial pockets
2. have patience to ever consider receiving any return on his/her investment
3. be able to cobble together 100 friends who can write the checks required annually to keep the place running while it fills.
4. Really love the sports business because golf is like owning a minor league sports franchise - for every success there are multiple failures.

[Jud_T]

  Perhaps we shall see more "local" US clubs open up to national and even overseas members. 

Ciao

Sean,

I agree on this bit.  When I played a hidden gem on the East Coast this summer that had lost some members I was shocked when I inquired whether they offered a national or non-resident membership that the answer was no...

[J Sadowsky]

I guess I will repost this here to stop a seperate thread from getting sidetracked.  

In the Contentment GC thread, I posted my concern that the market for these courses is limited to a very small number of people.

As someone with limited connections and limited time, I've only played two private courses in my life (my father-in-law's course, and I was lucky enough to be invited to a charity scramble at Robert Trent Jones GC here in DC).  And I don't even have kids yet.  I now have a job where I don't work weekends, but even now I am going to a wedding here, a football game there, visiting my in-laws, working on the home, visiting my mother (who is long-term sick), etc.  I maybe get 2 "getaway" weekends a year, and then one or two week-long+ vacations.  The weeklong vacations are with the wife (and generally to some place interesting - for instance, I will be needing golf recommendations in Nha Trang hopefully soon).  The getaways could be to Ballyhack I guess, but it is just as easy to go to Homestead, Greenbriar, or (given my budget and needs) Wintergreen. 

My wife is against me joining a local private club.  I would not even bother bringing up a national one.  As I said, I am clearly not the target audience.  But I do believe I am more and more the profile of the average upscale golfer, and I wonder if these courses can survive without catering solely to what Veblen appropriately calls "the Leisure Class."

I'd also say that - despite the limited connections - you would think that I would be on the verge of the target audience.  Relatively young, no kids yet (therefore diposable income), professional class, who this year actually played more golf away from the District (3 rounds in Jamaica, 5 in Mexico, 2 in central Virginia, 1 in Indiana, and had to miss possible rounds in Minnesota and Michigan) then in the DC area (1 charity golf outing, 1 client-development round, 4 rounds at various CCFAD/municipal courses).  If I can't see the appeal in membership, I doubt they will take off to many other newly-upper-class professionals either.

[John Kavanaugh]

Justin,

You can't join a national destination club until you realize it isn't all about you.  Of all the stories we have heard Gene and Jim tell about their experiences I can not recall a single instance where they were playing without guests.  Maybe you should talk your wife into joining a club.

[Jud_T]

If you can get the wife and kids to play as well then it becomes a nobrainer...

[J Sadowsky]

Justin,

You can't join a national destination club until you realize it isn't all about you.  Of all the stories we have heard Gene and Jim tell about their experiences I can not recall a single instance where they were playing without guests.  Maybe you should talk your wife into joining a club.

John,

I guess that would just be another problem.  I do not really have a large group of friends that are interested in golf.  One of my friends used to bartend at Oakland Hills, but he gets out maybe a few times a year.  While I have a few clients and associates who golf, I do not think any of them would necessarily be that interested in taking a weekend trip with me.  

Also - interesting that you say this in this thread while Lester sells the "solitude" angle in another.  Obviously, I do not think the two are contradictory in reality, but it amuses nevetheless. 

[J Sadowsky]

If you can get the wife and kids to play as well then it becomes a nobrainer...

No kids, but trust me, working on the wife.  To her credit, she never rules it out (and says we all need more exercise), but it will take time unless we find a course with yoga stations in between holes.

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