Would a Membership like this work?

[Chris Cupit]

Is this a decent idea or a truly stupid thought by a club owner

My basic premise is that golf as an industry is truly in a terrible position and I think its fundamentals are horrible and we will continue to see declines in participation rates.  We will devolve into a tiny niche sport.  Forget about whose to blame for a second and stay with me.

I do think the fundamentals of golf as an enjoyable game are strong.  Golfers are committed and loyal but the business has priced them out in many ways.

In a major metro area are there enough golfers who would pay to belong to a club like this:

Truly private and no tee times.  An architecturally intersting course that is consistently in good condition. 
Individual Memberships at a low or no intial payment (truly market driven which is about zero now).
Lump sum dues of $500 that included everything except what you ate, drank or equipment purchases.  I'm in Atlanta and I see $500 including dues, range, carts, (obviously no guest fees), service charges, no minimums or assessments of any kind, walking whenever you want.

If you wanted a family member to play a family guest may be a $10-$15 guest fee and regular guest fee of whatever ($75).

If you just came and played (whether you took a cart or walked) it was $500--if you played once, 20 rounds or 5 rounds that month.

For food and bev the club would serve an EXTREMELY limited menu from 11-4 and have a bar open daily from 11-7 (later in summer as needed).

For food the menu is burger, hot dog, Chicken, Tuna or Egg Salad sandwhiches and a BBQ sandwich (think Augusta) with prices of $3 for sandwiches and dogs, $5 for hamburger and $4 for BBQ.  Chips, snacks and everything else very inexpensive.  Draft beer at $1.75, Domestic Beer $2.25 and Import at $2.75.   Members would be allowed to have wine lockers and BYOB wine and liquor if they wanted to have something stronger.

Limited to 300-350 members.  A few major events (Spring Member-Guest, Fall Member-Member, Club CHampionship and a Couples event or two).  But no mens association, 18 hole ladies, 9 hole ladies, seniors.......

Part of me feels many people would love this type of deal while another side says it would kill off those that want and need more.  Trouble is though that the "needing more" is barely sustainable and fewer and fewer can afford it.  I think it is fair to say that a true country club guy spends over $1,200 per month if he is active and his wife uses it at all.  I see that guy facing bills of $750 in months that he hardly uses the club and when and if he is the only user of the club, that makes no sense.

Thoughts??

PS  I recognize that my model is still expensive--private membership is always more than daily fee.  But can just a Golf Club make it that is not a super high end affair?   

[Bill_McBride]

I would be all in for a deal like this.  350 x12 x $500 = $2,100,000.  With low or no debt it would be a bonanza.  Not sure why you wouldn't want a men's group, ladies' group, etc, everybody wants some regular competition with friends who are also club members.

I love the limited food and beverage options and schedule.

This sounds like a third owner deal after the bank capitulates and just wants out.

This ties in nicely with the recent thread on modest clubhouses.

[Mac Plumart]

Help me on a few items Chris...

$500 per year, $500 per month?

Either way that is very affordable if it covers EVERYTHING except food.  

I see two problems.

#1--how do you come up with the intitial capital to buy the land and build the course?  Owner with enough cash to simply make it happen?  

#2--Will that type of cash flow be an attractive enough yield to incent him to actually do the deal?

#3--You say the course will be architecturally significant...I read that as saying the course will be good...damn good!  If that is the case and the price is so cheap, how are you going to effectively limit the members?  I would guess there would be a lot of demand.

#4--This leads to another point (and maybe highlights why my questions in #3 might be dead ass wrong)...if the course is inexpensive, but good...will the average golfer want to play it?  Couldn't golf be like a luxury good, like diamonds?  The higher the price, the more preceived value?  That is will getting members be hard as the price is too low?  As the uneducated golfer sees the club  with $25,000 initiation fee as having to be better...heck it costs more.

I say two problems...and then I list 4.  What a dummy!

[K. Krahenbuhl]

Sounds good to me Chris.  An open line to the first tee and a cold drink after the round.  It would make me feel as if I was saving money by not paying for unnecessary overhead.

[Ted Cahill]

Chris- thank you for posting this.  I live in the SF Bay area and have been looking for a private club that doesn't require an initiation fee.  (I haven't found one) I would happily pay 500-750 a month in dues to belong to a golf focused club, but the idea of coughing up 15,000 or more initiation fee- I just cant justify it. 

I will watch this thread for contributors that work in the private club industry and see if in thier experienced opinion, your proposal could be feasible.  I wonder if a club somewhere operates under a model similar to the one you laid out.   I love golf and avidly play- I'm a hopeless Bandonista- I think as much for the no nonsense, no putting on airs, all golf environment as much as the great courses.  I would love to belong to a club with the same kind of ethos.

[A.G._Crockett]

Chris,
At $500 you lose me and absolutely everybody with whom I play golf.  Within the last 3 yrs., most of my long-time golf buddies dropped out of a club well before it hit $500.

Of course, that probably says more about what I do for a living and who my friends are than the club concept you are interested in.

[Gary Daughters]

Dogs allowed?

[Steve_ Shaffer]

Chris,

Blue Bell CC,in the Philly 'burbs, essentially has done just what you have proposed except that it is not a walking only course,although walking is permitted at certain times:

Full Membership:

http://www.bluebellcc.com/bluebellcc/content/view_c.php?s_id=1753144

Weekday Membership:

http://www.bluebellcc.com/bluebellcc/content/view_c.php?s_id=1753144

By the way, the owner of Blue Bell has made an offer to buy nearby LuLu CC and, if succesful pending township approval, will probably implement the same plans and/or offer a dual membership.

[Jim Jackson]

Chris:
I love the idea.  I'd certainly be willing to pay the 5/month and avoid the ridiculous upcharges, food minimums, assessments, and the like, for this thing to stay golf-focussed.  Better yet, pay the entire 6K at the beginning of the year, then just pay as you go for family, guests, food, drink, etc.  The problem I see is that if you just hold it to 500/month, without any initiation or financial commitment, you might not get committed members i.e. if they don't use it for a month or two they may bail.

[JESII]

Chris,

How about the fact that you're not getting any sort of retention hook into the members? What you've described would be very attractive to alot of people in an area like Atlanta, but without skin in the game people can jump ship quite easily and leave the budget out of whack.

[Carl Nichols]

I would do this in a heartbeat, since it would be cheaper than my current place (which also has a 70K initiation). But can 2.1MM a year cover all of the relevant expenses, including maintaining a really good course as well as it should be maintained? Seems like you might need more than 350 members, which might make it harder not to have tee times, etc.

[Tim Bert]

Chris

Sounds pretty good to me. There would be two barriers that I don't think I could get past personally, but it would probably work for many.

1. As an avid walker, I probably wouldn't join a private model where I felt like I was fully subsidizing the cart riders. I'd either rather see a slightly lower monthly fee for the walker, or a lower fee for everyone with a modest cart charge. Depends on the membership you are trying attract, I get that.

2. 300-500 local members sounds like too many for taste for no tee times. I'd rather have the tee times with that many people so I don't slow up and find myself in a long queue. I was part of a club with over 700 members and 36 holes with tee times and it was hard enough to play at times with tee times that I would have hated to see what would happen if you just showed up and hoped.

Other than those two nitpicks, the model sounds ok, but I think we all need to recognize at $500 / month we aren't growing the game, we are going to continue to shrink it. 

[Steve Kline]

This is exactly what I am looking for but can't find. But, the $500 would be a little much for me since I am paying for my son to go to private school. $350-400 would be more doable. Once my son is off to college then I could swing $500/mo. My current club is almost this except the golf course isn't very good and is tough to walk (although I always do). As for commitment the only way I would leave is if a better course in my area adopted a similar type membership. Friends that you like to play with are what keep you at a club. Initiation fees are a sunk cost so don't factor int my decision.

[Jeff Shelman]

Chris,

I think the concept would/could work in the right market. Obviously it depends on where it fits in with geographic competitors.

In some ways it is similar to the dues structure at my club, just wrapped up into one package.

We are $350 dues, $50 capital fee, $250/quarter minimum. We pay about $450 or so annually for locker, storage, range and carts. That adds up to a little more than $6000/yr or $500/month.

[Patrick_Mucci]

Chris,

I'm not familiar with the Atlanta market, so I'm not really qualified to comment in the context of an Atlanta specific example.

But, if it was in the NY Metro area, I would fault you on several grounds.

First, it's too inexpensive.

Second, I think you have to have a better quality menu.
PV, NGLA and other clubs have limited menus, but, with excellent food.

I don't want to bring guests and have them eat hot dogs.
I want quality food.

Third, you have to have a membership that can fund an unusual or unexpected problem.
If you have marginal members, when a problem arises, they will bail.
You need to retain members in the face of financial adversity.

I like the idea of a simplistic, quality platform, in the golf, facility, service and food.

But, I don't think you can be successful catering to the lowest common denominator with a shoestring operation.

Just my thoughts

[Anton]

Interesting idea and I would be a taker but as an owner you are taking a risk that members will not return yr to yr without the initiation commitment.  

Here is just an idea (a course near me does this):  

Offer 2 membership scenerios.  option 1 =  a yr to yr membership with no initiation at 500 month = $6000 a yr
                                            option 2 = an initiation of (ex. $5K) and then annual dues of $4K per yr.  
Option 2 is a bit more security for you as the owner and saves a long term member some cash in the long run.  

Just a thought.  You have a good principle but people do like some options and feel like they have some control in the purchase.  
Good Luck to you!

[Ryan DeMay]

Chris,

A club at which I was previously employed uses a model very similar to the one you describe.  Avalon Golf and Country Club is in an economically depressed area in northeast Ohio that is doing surprisingly well, considering.  At last report they had nearly 1,000 members using a dues only, no initiation, no service charges, no minimums, and no assessment model.  Much of their membership gains can attributed to their acquisition of two other courses in the area, giving them three golf courses at three separate locations.  The recent  acquisitions added two older, traditional country clubs to the fairly recently re-designed, golf-only Avalon Lakes (Dye/Liddy).   Here is a link to their current dues structure:

http://www.avalonlakes.com/membersmain.htm

[Patrick_Mucci]

Chris,

I think Tony is correct.

You have to be "invested" in the club.

A $ 5,000 bond, initiation, loan, whatever, would seem to be a prudent requirement.

[Jeff Shelman]

Pat and others,

I think that while an initiation fee makes members more invested in a club, it isn't always prudent.

At this point in time, I think initiation fees aren't set by whether it is a good idea for the club or whether a club doesn't want to water down its membership or whatever, it is set in large part by what other clubs in the same geographic area are doing.

Right now in MSP, I know of at least a half dozen private clubs that have zero initiation fee at this moment. Several others have recently had zero initiation fee promotions. A different club had been very steadfast at keeping its initiation fee at $5000 recently dropped it to $1500 because they were losing potential members to two other clubs that have zero or $500 initiation fees.

The number of clubs that can command $5000 in many parts of this country is very small unless they are close to full. Too many clubs will enter the 2011 season with fewer than 300 members. When that happens, you need the dues paying members. Retaining the members that you have is more important than ever.

[Steve_ Shaffer]

The Blue Bell membership plans, as described in the links above, have a non refundable initiation fee that can be paid in a lump sum or over a period of time with a "walk away" feature for the pay out period.

Blue Bell also charges a $25 cart fee per person which can increase costs substantially(and the club's revenue) as I believe walking is only allowed on Tuesdays or after 2pm any day. There is no caddie program there. I'm not sure if push/pull carts are allowed.

[Patrick_Mucci]

Jeff,

What you say is true, but, Chris asked about a concept for a new club.

Catering to the lowest common denominator, and offering minimal services, wouldn't attract a membership that can sustain the club in hard times.

You need the membership to invest in the club.

Some clubs charge nothing, wanting only the dues.
Other clubs, nearby, are still charging HEFTY initiation fees.

I doubt that Baltusrol, Winged Foot, and others are giving away memberships.

Location, quality of the course, clubhouse, service and food still count when people are trying to decide where to join.

If getting into a club was solely a function of money, wouldn't you opt for the club with the best quality that was the most financially stable ?

[Wade Schueneman]

Chris,

Have you considered offering "national memberships".

DISCLOSURE - This post is authored by a fan of Rivermont that lives 50+ miles from Atlanta.

[Gary Daughters]

If stability looks like an issue, what if you required dues for the first 12 months up front?

Maybe even require the second year's dues at the expiration of the first year.

After that introduce a monthly option.  

[Jeff Shelman]

Pat, you are certainly right about Winged Foot and Baltustrol. The problem is that not every club gets to reside in the top 1% of clubs.

What I know is what's happening here. There are clubs that are just fine (though very few, if any, clubs have waiting lists of any note), but the vast majority are scratching for every possible member.

There was a club here that has a very solid Old Dead Guy designed course that went to zero initiation for a while in the fall.

For right or for wrong, monthly dues are the lifeblood of every club. In a perfect world would every club be able to get some skin in the game from new members? Certainly.

But if a prospective member is weighing one pretty good club against another pretty good club, initiation fee is likely going to be a factor.

I don't know that there's a right or wrong answer with this.

[Wade Schueneman]

As a native Atlantan, I wonder if $10k up front + $350/month would not be a better recipe for success.  To me there is something very attractive about keeping monthly dues under $100/week and about having a bit of lock-in on account of an initiation fee.