[Mark Pearce]

40 years ago very few clubs worried about making a profit.  Breaking even was the key because they were members clubs.  The economics are very different if you're worried about return on investment.

[Scott Warren]

From an Australian perspective, but interesting in the context of this discussion, nonetheless.

http://www.brw.com.au/p/brw-lounge/golf_club_members_dying_give_some_GvzNn3fPY738cYBW0JgJfI

[Mark_F]

From an Australian perspective, but interesting in the context of this discussion, nonetheless.

http://www.brw.com.au/p/brw-lounge/golf_club_members_dying_give_some_GvzNn3fPY738cYBW0JgJfI

What is the "staggered pricing structure for members under 40", Scott?

[Scott Warren]

Mark,

Between age 18 and 40, there are several different levels of joining fee and annual fee, moving up from no joining fee for under-18s to 100% for those aged 40+.

I joined at age 27 and paid 40% of the full joining fee (and to be clear, I don't pay the other 60% when I turn 40, what I already paid is all I ever pay).

Then under-40s also get a smaller discount on the annual fee (I'm not exactly sure how much, I think about 10%).

[Duncan Cheslett]

There are probably not many courses left with a lot of debt.

That would be news to quite a few members' clubs in this neck of the woods. Several borrowed extravagantly - usually to finance new greens or a fancy clubhouse - and are now struggling even to service the debt out of a reduced level of income, never mind pay back any capital.

One south Manchester club put their centenery celebrations on hold this year because they had been forced into administration by the bank getting nervous about the outstanding debt. Their course is probably next to worthless as anything other than a golf course as it is miles from the nearest farm and cannot be developed as it regularly floods, due to its immediate proximity to the River Mersey.

They've got nice new greens, though...

[Paul Gray]

There are probably not many courses left with a lot of debt.

That would be news to quite a few members' clubs in this neck of the woods. Several borrowed extravagantly - usually to finance new greens or a fancy clubhouse - and are now struggling even to service the debt out of a reduced level of income, never mind pay back any capital.

One south Manchester club put their centenery celebrations on hold this year because they had been forced into administration by the bank getting nervous about the outstanding debt. Their course is probably next to worthless as anything other than a golf course as it is miles from the nearest farm and cannot be developed as it regularly floods, due to its immediate proximity to the River Mersey.

They've got nice new greens, though...

Perhaps if there's one lesson to be learnt from the excesses of the past it should be, as a friend of mine recently so eloquently put it: "You can't f~#k with nature."

Modest land equals modest golf course equals modest [edit] revenue.....although there are experts out there at papering over the cracks, so to speak.

[Paul Gray]

We can agree or disagree about exact structure all we like. Here is a link I thought a few might appreciate seeing:

http://edinburgh-golf.com/

[Jon Wiggett]

40 years ago very few clubs worried about making a profit.  Breaking even was the key because they were members clubs.  The economics are very different if you're worried about return on investment.

I think Mark has put it perfectly here.

Paul,

this concept is good but what many clubs in my area did was to have reciprocals where it was free to play which is financial suicide.


Jon

[Duncan Cheslett]

40 years ago very few clubs worried about making a profit.  Breaking even was the key because they were members clubs.  The economics are very different if you're worried about return on investment.

I think Mark has put it perfectly here.


Jon

I'm sure Mark is right about members clubs 40 or more years ago. The trouble is that things have changed enormously. The costs associated with maintaining a course and running a club have increased almost exponentially.

A magazine article by Henry Cotton in 1940 desribes Reddish Vale being maintained to a very high standard by just the Pro and two men. Now we have a well-paid greenkeeper, three full-time staff and a couple of part-timers, together with a shed-load of expensive equipment. We are not alone. Breaking even is a struggle for most members clubs and falling membership will continue to make it increasingly so.

Today, members clubs are businesses and need to be run as businesses. To survive long term all businesses need to make profits in  good years to even out the bad ones. 40 years ago if the clubhouse needed a new roof a levy would be placed on members and they would pay up. Try that today and half the membership would walk. That is the reality.

[Jon Wiggett]

Duncan,

I think the point was that 40 years ago clubs were run as non profit making bodies who cut their cloth to suit their situation. Not rich but not broke. Now they are businesses many of whom are kitted out as though they were well off but are actually in debt. One of the problems many members may find is depending on the constitution of the club if it goes belly up they may still be responsible for its debt.

You started this thread by asking if tradition was killing clubs in the UK. It is a little amusing to read that now you think it is the so called modernisation of the club management that might be the reason.

Jon

[Mark Pearce]

Jon,

I noticed that slight shift in Duncan's position too.  To be honest, I think the suggestion that it was tradition that was killing clubs died a death some time ago in this thread.

[Paul Gray]

40 years ago very few clubs worried about making a profit.  Breaking even was the key because they were members clubs.  The economics are very different if you're worried about return on investment.

I think Mark has put it perfectly here.

Paul,

this concept is good but what many clubs in my area did was to have reciprocals where it was free to play which is financial suicide.


Jon

Hi Jon,

To try to get a better understanding of things up in your part of the world, why do you regard it as financial suicide?

[Jon Wiggett]

Paul,

two years ago I could join an west coast 9 holer for £102 and get 3 free rounds at Tain, Fortrose, Strathpeffer, Invergordon, Evanton, Golspie, Portmahomack and Bonar Bridge plus some of the west coast courses. Great for the 9 holer who gets new members from the east coast who rarely make the trip but not so good for the east coast clubs. One of these clubs reckoned it had over 850 reciprocal rounds on its course in 2012. Do not forget that some of these rounds would have been played anyway so it is lost greenfees. In effect it costs the clubs revenue and at the same time there is more wear and tear on the course. Loss of revenue coupled with increased expenditure due to an agreement is financial suicide for a club with very little financial playing room in my book.

Jon

[Adrian_Stiff]

Many golf clubs just don't do the maths. If you 'theoretically' do 32,000 rounds and it costs £640,000 to run the golf course then you need to average £20 per round played. If you sell rounds at £19 you will go bust eventually if you sell them at £10 you will go bust quicker.

If you take the attitude there is a tee time we can fill at £10 so we may as well take the £10, you will eventually go bust by the fact you have alerted your customers that are currently happy to pay £20 that there are cheaper ways to play.

If you create cheap times on afternoons or certain days many of your £20+ customers will just play in the cheap times.

At all times you must consider the green fee multiples versus membership cost, if you go out of sync you will get into trouble and that ideal range is 20-30. The cheapest way to play golf should be as a member if you play 20 times.

It is not easy but you just got to hold your head up and maintain your price. The grabbitts will eventually fold or reduce their product quality. The UK situation is pretty dire, we have had bad weather over the last few years that have killed off society organisers, money is tight, time is tight. Many clubs have joined the rat race of dropping green fees, making memberships less attractive.

Recriprocal's are theoretically a great idea but as I earlier highlighted and JW has pointed out if 10 clubs get together then the 10th best course gets the best deal and the best course gets the crap end. The county card (which has become a National Discount Card) does at least generate money and should be a great reason for being a member and so a help in membership retention. Sadly they get passed about and so non-members can get to use them, perhaps innocently people say 'borrow my card'. It needs a national database governed by the CDH number and picture, but even then most clubs are just happy to take money.

I have priced our summer green fees at £48 midweek and £72 day rate, I do 2-4-1s at £36, County Card at £36 and Members Guests at £36. So 90% of our green fee income is at the budget deals, I just accept I only get 75% of rack rate and I HAVE TO BE PART of the game that every club seems to play save the elite (top 100) courses. We get a lot of free national press from Todays golfer/Golf World y being a 2-4-1 course, the company that owns those mags own 2-4-1 as well. If everyone stopped 2-4-1s it would be great, teeofftimes and all the ponce schemes are killers as they just propagate cheap nomadic golf.

[Brent Hutto]

If everyone stopped 2-4-1s it would be great, teeofftimes and all the ponce schemes are killers as they just propagate cheap nomadic golf.

Although you gotta admit today is a great time to be a cheap nomadic golfer!

When I first started playing golf in the mid-90's I was a cheap nomadic golfer of sorts. And most of the people I played with were the same. Our area was overbuilt with public golf courses of all qualities and prices so in a sense even though it was during the Go-Go golf boom, at the local level it was somewhat like today's oversaturated marketplace.

Where I eventually ended up was a public course that actually beat the cheap nomadic deals. They just offered dirt-cheap monthly subscriptions and, being a 27 hole course built on sand, they could absorb a tons of rounds played. Admittedly the smallish greens were perpetually beat to hell but what the heck I was playing 10-15 rounds a month for $65.

The question I always venture in these discussions is whether the "industry" has any plausible path that returns it to the state I found 20 years ago. Where there are ubiquitous cheap-and-cheerful, overplayed, overcrowded courses serving large numbers of "cheap nomadic golfers" with or without the "nomadic" part. Or have we worked our way down a path that just spirals downward endlessly with fewer and fewer golfers being chased by fewer and fewer viable course albeit with a higher average level of maintenance and "niceness" among the few courses that are left.

[Adrian_Stiff]

Yes it is a great time to be a cheap nomadic golfer. Long term is that good?

I suppose golf is in a position not so different from many other situations wherby the transparency of the internet has driven the price down. Many are having a tough time and competing at prices that are just not yielding enough profit. The customer is having a great time but companies without profits mean no company. Our local corner shops are 'no more' because you can buy cheaper elsewhere and we now have shopping malls and buying areas and now those are becoming unsustainable with online buying. I don't know how it will pan out but altering the balance of any situation is always dangerous and the knock on events are potentially catastrophic.

[Brent Hutto]

I guess of all the possible scenarios, if I had to choose between these two extremes I know which one I'd pick:

1) Eventually there are very, very few private golf courses or mid-to-upper range public ones. Maybe still some big-$$$ resorts but not much in the way of "nice" courses locally available in most areas. But there do remain a decent supply of scruffy price-is-all-that-matters overcrowded, under maintained public places to play.

2) Eventually all the lower-range public courses and affordable private options chase that last bargain dollar right down the toilet. It no longer makes sense to use all that land for something you can only charge 10 bucks a round to use. But there are still a decent number of private clubs holding down the upper end of the market. And some high-$$$ resorts and in certain areas a few high-$$$ CCFAD operations.

I think the first scenario is preferable. If forced to choose I'd rather give up any sort of regular, ongoing access to the quality of courses (and quality of "experience") that I've been used to...as long as I could go back to my 4 hour, 50 minute rounds among the great unwashed on a scruffy public track with cuppy fairway lies and the occasion bare spot on the putting greens.

Of course really long term there's a certain probability we end up with the option none of us would choose:

3) It no longer makes economic sense to maintain golf courses at any level of price or "niceness" and the whole enterprise slowly but surely implodes and eventually golf is no longer engaged in on a widespread basis anywhere.

[Paul Gray]

Brent,

You're not too fair from the 'Clubs A, B and C model' previously discussed in this thread.

Adrian has an awful lot more sense that you'd find within many clubs in the UK at present and that's why his 'Club B' is far more likely to survive than most. Again, the reality is that many in the middle group are simply going to disappear.

The corner shop analogy is a good one because it applies broadly across the industry. As well as price transparency effecting green fees it's knocking revenue within Club Pro Shops. Once a reasonable means of generating a little extra revenue, Pro Shops are becoming, at best, loss leaders.

[Sean_A]

I am not sure there is a comparable situation to golf in the UK.  As stated previously, by far the biggest reason for struggling clubs is overbuild.  While you may be able to book golf online, you can't play golf online - yet.  So I am failing to see the strong connection to street front shops compared to e-shops and how that relates to golf.  Add in that a large percentage of that overbuild is made up of at best average courses on average land and the recipe for failure becomes quite clear.

Ciao    

[Paul Gray]

Sean,

I'm not in the strongest of positions to compare UK golf to any other golf markets but, with specific regard to the internet, the issue is one of transparency. Granted you can't play golf online yet but you can buy (not simply book) a tee time there. That isn't to contradict anything we've said about supply exceeding demand, it's just that the internet highlights that over supply.

[Sean_A]

Sean,

I'm not in the strongest of positions to compare UK golf to any other golf markets but, with specific regard to the internet, the issue is one of transparency. Granted you can't play golf online yet but you can buy (not simply book) a tee time there. That isn't to contradict anything we've said about supply exceeding demand, it's just that the internet highlights that over supply.

Paul

Fair enough, but as said earlier, I think the real culprit for struggling clubs has been identified.  All the other talk is just milling about the edges of the real issue.  If every club dropped all its traditions, there still aren't enough golfers to fill the membership rolls.  To think a serious number of new golfers will come to the game if and when this happens is a bit pie in the sky thinking.  There are already a ton of clubs with virtually no connection with tradition which are struggling.  I still say, a good product in good condition is the number one best seller for golfers.  

Ciao

[Dave Doxey]

Here's my perspective.

I was a member of private clubs for most of my long golfing life.  A job relocation, which at the time was to be only for a couple of years, forced me into the “cheap nomadic golfer” mode at approximately when the golf business fell on hard times.

While the 'cheap' part is indeed nice, due in some part to Internet tee times, the 'nomadic' part is not all that great and I miss the camaraderie of being a club member.

However, watching clubs struggle, I'm held back by the prospect of writing a check for $20K+ initiation to a private club that may fall on financial hard times and/or eliminate that initiation fee entirely in the future.  My investing background tells me not to buy into a falling market.  In the past, I have never given a second though to club initiation buy-ins, but given the current state of the industry, I do now.

I guess that I'm headed for one of two solutions.  One is a private club with no initiation, where I'll happily pay a higher cost-per-round in return for a good group of guys to play with.  The second would be to find a public course with some sort of formal or informal group of regulars who play together.  I guess, when you think about it, these two aren't all that different....

"Tradition" never comes to mind.  Perhaps these is none in US clubs?

[Daryl David]

Here's my perspective.

I was a member of private clubs for most of my long golfing life.  A job relocation, which at the time was to be only for a couple of years, forced me into the “cheap nomadic golfer” mode at approximately when the golf business fell on hard times.

While the 'cheap' part is indeed nice, due in some part to Internet tee times, the 'nomadic' part is not all that great and I miss the camaraderie of being a club member.

However, watching clubs struggle, I'm held back by the prospect of writing a check for $20K+ initiation to a private club that may fall on financial hard times and/or eliminate that initiation fee entirely in the future.  My investing background tells me not to buy into a falling market.  In the past, I have never given a second though to club initiation buy-ins, but given the current state of the industry, I do now.

I guess that I'm headed for one of two solutions.  One is a private club with no initiation, where I'll happily pay a higher cost-per-round in return for a good group of guys to play with.  The second would be to find a public course with some sort of formal or informal group of regulars who play together.  I guess, when you think about it, these two aren't all that different....

"Tradition" never comes to mind.  Perhaps these is none in US clubs?

Dave,
Those that get all tied up worrying about initiation or equity fees being a potentially losing investment should never join a club. That money should be considered lost upon joining and considered part of the freight for the golfing life they desire. I believe it was a huge mistake during the club boom to promote clubs with schemes centering on how easy you can get your money back when you leave. It attracted people to clubs that never would have joined it they knew the real truth which is that they would never see that money again. That's why we have massive sell lists now that will never be eaten away by influxes of new members. All of those folks grumbling about getting their "investment" back sends the club into a downward spiral.

If anyone is considering joining a new club and a major part of the sales pitch is how easy it will be to get their initiation/ equity back, they should run the other way.

[RJ_Daley]

I'm surprised this thread got to 8 pages.  Having only read first few pages and skipping to last, it doesn't seem to me that much has been defined.  And, I certainly have no real world understanding of the culture and ambiance of UK golf clubs, having never been...

I assume the consensus is generally with the maxim, 'when in Rome...'   It seems to me that those of us that have a much less formal inclination when it comes to dress code and clubhouse protocols, are generally guests.  And, if you are invited to play at a club with more rigorous traditions of dress and manner, you can either respect the invitation and comply, or don't go.  Simple enough, it seems to me.

But on the question of whether traditions, and clubhouse rules, etc. are killing the clubs, I don't really think so.  I think that some of the most rigorous clubs with what many of us might think are over-the-top traditions and rules, are clubs that don't really give a darn, and have all the members of the same sensibilities that they want.  Stodgy old clubs of the parodied club David Feherty makes fun of "Scrotswoods" are an anachronism, that eventually the most musty and ridged of traditions eventually fade away, like most all anachronistic style.  We don't see the old writing prose and vernacular of the great old writers of the turn of the last century, with their turn of phrases, etc.  And, we won't see some of the stodginess of some of the most ridgid examples now either as new decades and culture changes.  

But, it is all about choice.  Personally, I don't care how prestigious it is thought of and how good the golf course is, I wouldn't be at Muirfield playing a 9 hole loop, go change for lunch to slurp some soup and make a show of eating a sandwich, then rechange to go our to play another nine holes, and come back to dress formal for a dinner.  It just ain't me.  But, they don't seem to be victims of a killing of their club, and I'm not dying to take part.  Fair dinkum as those Aussies say.

And, for the record, there isn't a tinkers chance that I'd pine to play a course that requires knee high dark socks with one's bermuda shorts.  I'm positive I can fill out my dance card of seeking out good golf architecture examples to play and still skip that embarrassment.  

  BTW, I have a question for my more well traveled foreign golf architecture seeking friends like Bill McB and Mike W.  Having seen your photos at dinners after rounds at some to the greatly thought of international clubs, you gents being all dressed up in your sport coats and ties at the club house after-golf gatherings;  I'm puzzled by the logistics of the whole process.   Do you dress in coat and tie, on your way to the club you've been invited to, carry your golf clothes with you and change, then afterwards change into the coat and tie again- or the other way around, drive in golf attire, play and change in the coat and tie you carry with you?  It seems to me to be an awful lot of extra baggage space to pack a coat and shirt-tie and enough golf and casual tourist clothes, on a typical multi-day, or week+ foreign trip, and your golf clubs to lug around as well.  

[Paul Gray]

RJ,

You've actually skipped the bit where we covered some good ground. Try the middle section. A broad consensus was reached and, to paraphrase Sean, we're now into a discussion about the minutiae.

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