All UK member golf clubs will receive a massive windfall

[Sean_A]

Adrian


I don't really know what the trend of usage is and I would be suspicious of any generalization because the UK is vastly different from area to area and club to club.  Though I do agree that it is very odd for a 350 member club to have a Saturday crush.  I think RV has had a recent surge in membership so maybe it is temporary and things will settle out after a few years.  I would be loath to offer 5 day memberships unless I was dead sure the numbers were going to work going well into the future.  I would look for other alternatives and only use 5 day membership as  last resort.


I do know that it is next to impossible for me to get a good tee time for the Saturday comp.  It books out in a few minutes once the times go online.  The situation is being considered by the club because there have been complaints.  In the summer the club now offers Sunday comps for those who find they couldn't get into the Saturday comp...some guys now don't even bother with Saturday anymore...that will be me this year unless things change.  Of course the net result is fewer "leisure" times available on the weekend which I generally do not like.  That said, the club is heavily geared toward comps so that aspect is something I have to live with even though I could care less about comps. Bottom line, I got used to a club which didn't have a full membership and/or so many members who wanted to play on Saturday.  That has now changed and for me it is a bad change. 


Ciao

[Adrian_Stiff]

Sean - That to me sounds as if Burnham has the sameish problem that RV is experiencing. We are the same on Saturday's, very noticeable in the Winter with the lack of daylight hours.


I am surprised you have not considered Cleeve Hill as your membership.


As a side note what would you pay for a 10play membership, ie a membership restricted to 10 rounds at B&B. I always thought that might be a winner.

[Duncan Cheslett]

I would suggest that Reddish Vale is not a typical suburban golf club. No one joins RV for any reason other than its fine golf course; it is not the kind of club that attracts members in search of social cachet or business connections. We get a lot of defectors from other local clubs who realise that our course is far superior to most others in the area. We also tend to attract members from a wider area than most similar clubs, prepared to travel to play the best course.

Consequently, our membership is made up mainly of serious golfers rather than casual players. This accounts for the very high proportion of 7 day members expecting to play every Saturday as well as a couple of other times during the week.

I genuinely believe that no one as thus far seen this as a problem. The assertion that a club should have 600 members shocked me; I couldn't see how this  was possible given that in my experience over half of all members expect to play in the Saturday competition each week.

I have had my eyes opened and in my position as being responsible for marketing and membership I will be working on a proposal for the next Council meeting.

I am grateful for all the input in this thread and hope that I have your blessings to contact you privately for further  assistance.

Apologies to Ran for such a long thread without specific architectural content but I am sure many will have found it of interest.

[Sean_A]

Adrian

My club has a similar issue to RV, but with twice as many members so in a way its a good problem    It is the only club for a long way which consistently has qualifiers in the winter and it is by far the best course in quite a large area.  So in these ways we are very different from RV.

I looked into joining Cleeve Cloud, but its actually quite expensive considering their pay & play rate...the balance is all wrong.  I think I worked it out that I would need to play 40 games to break even.  I am never in a million years going to play 40 games on the hill with the weather it gets.  The actual club has no attraction for me because I still want to retain my current membership, the house is a tip and on top of it all its still 30 minute drive.  Its only the course I care about and can play there cheap as chips when I like. 

Ciao

[Jon Wiggett]

Adrian,

I am not sure you are addressing the problem RV has. It is not that they have too many members (in fact they are short) it is also not that members play too much and I wonder how you would be received if you were to tell any of your members playing twice a week they were playing to much which is what you seem to be suggesting. RV's problem is when some of their members play. If enough members alter their playing habits then all would be well.

Fairness is all relevant.  You could say that all members have the same opportunity.

Ryan,

is it not that spending has out paced membership costs? That is certainly my impression and I suspect it is where the bulk of the solution lies for many clubs.

Jon

[Ryan Coles]

Jon

In some cases I'm sure. But not in this locality. Cost of sand, dressing, seed, fuel, rates, wages/NI/Pension, never ending compliance and h&s, insurance, wash down bays, machinery, haulage, all went up way above the % subs increases at the same time as joining fees went by the wayside, property costs soared and pressure on jobs led to a slump in participation.

My club is far busier with 600 than it ever was with 750. Those leaving are the one platers or anorexic. Those joining do so because they want to play golf.

Where you may have a point is in machinery purchases. 10 years ago clubs probably hired in aeration equipment. Now most seem to have a terraspike or equivalent as well as a toro pro core. Wasteful expenditure or a necessity to prolong the season, improve drainage and reduce disruption?

Lots of clubs are cutting costs. Pro's retainer going, % of greenfees removed, hardly anyone pays overtime at weekends for greenstaff, all annualised hours.

[Jon Wiggett]

Ryan,

I do not disagree with you at all but I will stand by the point that this is an issue many clubs will have to address.

Jon

[Duncan Cheslett]

Ryan,

I've just been having a good look at your club website, and on the face of it Knowle appears to occupy a similar place in the market to Reddish Vale. Members' subs are similarly priced, neither of us has a joining fee, and green fees are in the low-mid region of the spectrum. Clearly both clubs have a quality course, but neither is the most "prestigious" club in its area.

Yet Knowle has 600 members against RV's 350 or so. You also say that Knowle's membership has declined from 750!

Clearly then, there are cultural differences. I am still trying to get my head around just how you manage to accommodate 600 members on one course without having major problems at the weekend. If we had 600 members,  300 of them would expect to play every Saturday!

What proportion of your membership is 5-day?

How many Ladies do you have?

How many Juniors? Are they allowed to play in Saturday comps?

I feel a golfing trip to the Bristol area with my wife coming on as soon as this bloody weather improves!

[Ryan Coles]

Ryan,

I've just been having a good look at your club website, and on the face of it Knowle appears to occupy a similar place in the market to Reddish Vale. Members' subs are similarly priced, neither of us has a joining fee, and green fees are in the low-mid region of the spectrum. Clearly both clubs have a quality course, but neither is the most "prestigious" club in its area.

Yet Knowle has 600 members against RV's 350 or so. You also say that Knowle's membership has declined from 750!

Clearly then, there are cultural differences. I am still trying to get my head around just how you manage to accommodate 600 members on one course without having major problems at the weekend. If we had 600 members,  300 of them would expect to play every Saturday!

What proportion of your membership is 5-day?

How many Ladies do you have?

How many Juniors? Are they allowed to play in Saturday comps?

I feel a golfing trip to the Bristol area with my wife coming on as soon as this bloody weather improves!

Duncan

We only have our winter rates on view at the moment but we're £30 midweek against a sub of just over £900, expensive relative to some areas but in this one we're somewhere in the middle.

Our profile is not untypical of many clubs I don't think. A large proportion over 55, but a good number of 18-40's. Unlike most clubs our juniors tend not to be university types and generally stay on through their 20's.

Our ladies section is about 70 with only about 20 who play with any regularity.

We have about 80 juniors of various ages, they play with very few restrictions and are eligible to win club trophies at when 14 handicap or below. No issues usage wise, the younger ones play when quiet, the older ones always playing opens etc.

In terms of course usage. Saturday has sort of resolved itself. Those who can play at other times of the week have gravitated. (Why would you play on Saturday if you're retired and take 4 hours when the rest of the week it takes 3.15).

We run most of our medals on Saturday. Two tee start am and pm which accommodates 132 and in summer we get another 15 or so go out after the tee reservation at 3.30pm.

Sunday's we tend to play our trophy events. 1 to boost an otherwise quiet day and 2. To take some pressure of Saturday. When I started playing 20 years ago Sunday's were much busier. These days more people play on a Friday, our car park is full of vans as our tradesmen award themselves a half day. All good bar spenders.

As we're in town, summer evenings are busy, which again helps take some pressure off Saturday's.

[Ryan Coles]

Update on the original subject. KPMG advised yesterday that those claims going back to the start will see around 60% uplift based on simple interest.

If the compound interest argument succeeds, the numbers are staggering even for relatively small claims.

[Matt Dawson]

Ryan

I have some experience of customer remediation cases (banking specifically) where interest calculations form a considerable part of compensation and consequential loss claims.

There is plenty of historical precedent regarding 8% simple interest, and courts, regulatory bodies and suchlike tend to favour this approach. Compound interest would be highly unusual, to put it mildly. Especially given our recent interest rate environment.

KPMG will be well aware of this point, as will most law firms involved in this area.

[Ryan Coles]

Look up the Littlewoods case currently going through. KPMG are pursuing compound interest.

http://www.taxjournal.com/tj/articles/littlewoods-retail-compound-interest-claim-upheld-01062015

[Matt Dawson]

Thanks for highlighting Ryan.

Mea culpa

[Duncan Cheslett]

Regarding CASC status;

I was speaking with our accountant the other day and the new CASC rules throw up another issue.

If all clubhouse activities are hived off into a subsidiary company it leaves the club with income coming almost entirely from membership subscriptions and green fees. Both are now exempt from VAT. HMRC rules only allow a business to reclaim VAT on purchases in proportion to its income that is subject to VAT.

This means that the club's ability to reclaim VAT on purchases relating to the course - machinery, materials, chemicals etc. - will be very limited.

The main attraction of CASC is the 80% reduction in Business Rates. For us however, well over half of this saving will now be lost by our inability to reclaim VAT on golf related purchases.

It is getting to the point that we seriously have to question whether it is worth jumping through the new hoops in order to retain CASC status.

Our accountant suspects that many CASC golf clubs will simply carry on regardless and hope for the best, He further suspects that HMRC, smarting from their humiliation over green fees, will be watching golf clubs - particularly CASCs - like a hawk.

I wonder if this might ultimately spell the end of the road for some small golf clubs who have become reliant on the rates savings that CASC brings, and botch their response to the changes in the rules?

[Adrian_Stiff]

I am pretty sure I said this earlier in the thread or may have just made the point that if you hive off the clubhouse into a catering company that business is operating without paying rates or is only paying 20% of them. If not now soon the HMRC will demand full rates on the buildings, possibly car park for that operating business.


CASC should be for small 9 hole golf courses in the middle of nowhere not for bona-fide clubs, which was what it was designed to help not the bigger clubs.

[Jon Wiggett]

Duncan,

in the end clubs will have to decide what they are. Private members clubs where they do not pay VAT but do not get CASC status or profit making businesses where they may get CASC but also have to pay VAT. You cannot have it both ways.

[Duncan Cheslett]

Duncan,

in the end clubs will have to decide what they are. Private members clubs where they do not pay VAT but do not get CASC status or profit making businesses where they may get CASC but also have to pay VAT. You cannot have it both ways.

Not quite, John.

A private members club which has a very modest income from green fees and the clubhouse might find that CASC status is still an advantage. The problem comes when non-member income reaches £100k per year.

A commercially run golfing and catering operation is not going to qualify for CASC anyway.

It is beginning to look as if the powers that be have been successful in excluding virtually all members golf clubs from the auspices of CASC.

My fear is for the ones that fail to realise that the party is over and press on - only for HMRC to come down on them after say five years and demand repayment of the Business Rates discount and/or disallow a big chunk of reclaimed VAT.

Given the parlous finances of many local members clubs around the country this could trigger insolvency.

Expect to see a move towards 12 hole golf courses as clubs flog off land in a bid to survive. Which might actually not be a bad thing...

 

[Sean_A]

Duncan


Some golfers, for reasons I can't fathom, seem to believe they have a right to play the game and sometimes...just about anywhere (see Trump).  I don't see there is a problem in your scenario.  Follow the rules or be willing to pay the consequences...thats life all over.  Be competitive...thats life all over. 


Ciao

[Adrian_Stiff]

Duncan,

in the end clubs will have to decide what they are. Private members clubs where they do not pay VAT but do not get CASC status or profit making businesses where they may get CASC but also have to pay VAT. You cannot have it both ways.

Not quite, John.

A private members club which has a very modest income from green fees and the clubhouse might find that CASC status is still an advantage. The problem comes when non-member income reaches £100k per year.

A commercially run golfing and catering operation is not going to qualify for CASC anyway.

It is beginning to look as if the powers that be have been successful in excluding virtually all members golf clubs from the auspices of CASC.

That was the intention and to be honest it is perfectly fair. CASC was set up for small sports clubs. Community Amateur Sports Clubs.

[Duncan Cheslett]

You are quite right, Adrian.

I am sure that golf clubs were never in the minds of the people who put together the original proposals for CASC.

The loopholes that allowed golf clubs to qualify have largely been closed. It is clear from looking at many clubs' websites however, and the plethora of CASC conforming new membership categories coming on the market, that many clubs are determined to retain their status. A couple of example from our local competitors:

http://howdidido.blob.core.windows.net/clubsitespublic/file_dba8e6e5-c6b9-4d44-addb-a008f372062f.pdf

http://dentongolfclub.co.uk/membership/

We will probably be launching an "Off-Peak" membership in time for new season, but it is looking increasingly likely that it will be for commercial reasons, not in order to stay in CASC.

[Adrian_Stiff]

I think if a club owns their land they are foolish to be part of CASC. If they fall foul of the rules, they could easily rack up a couple of hundred thousand pounds of bills if they think they are getting away with it and then they are not. Ultimately they could lose land as the members won't want to all cough up £500 each for the fine.

[Jon Wiggett]

Duncan,

in the end clubs will have to decide what they are. Private members clubs where they do not pay VAT but do not get CASC status or profit making businesses where they may get CASC but also have to pay VAT. You cannot have it both ways.

Not quite, John.

A private members club which has a very modest income from green fees and the clubhouse might find that CASC status is still an advantage. The problem comes when non-member income reaches £100k per year.

A commercially run golfing and catering operation is not going to qualify for CASC anyway.

It is beginning to look as if the powers that be have been successful in excluding virtually all members golf clubs from the auspices of CASC.

My fear is for the ones that fail to realise that the party is over and press on - only for HMRC to come down on them after say five years and demand repayment of the Business Rates discount and/or disallow a big chunk of reclaimed VAT.

Given the parlous finances of many local members clubs around the country this could trigger insolvency.

Expect to see a move towards 12 hole golf courses as clubs flog off land in a bid to survive. Which might actually not be a bad thing...

Duncan,

I still maintain that in the end private members clubs must decide what they are instead of trying to have it both ways. If they are so poorly managed as to not realise this then it is their own fault.

Jon

[Adrian_Stiff]

Jon


With all respect I don't think you understand just how hard it has got now. I don't know or understand your set up and I can't get an iota of information off your web site to fathom your project, but many clubs are close to breaking point. Golfers, seasoned, scratch or just too old many are leaving the game. Reasons are many but numbers are going lower and lower.

[Jon Wiggett]

Jon


With all respect I don't think you understand just how hard it has got now. I don't know or understand your set up and I can't get an iota of information off your web site to fathom your project, but many clubs are close to breaking point. Golfers, seasoned, scratch or just too old many are leaving the game. Reasons are many but numbers are going lower and lower.

And the relevance of this to the thread is what Adrian? Are you suggesting that HMRC should cut private members clubs who are struggling some slack and let them not pay? Should not the clubs ry to fathom out why people are going and put in place successful alternatives to solve this? Read your first sentence Adrian as I think some of the answer lies within it.

Jon

[Adrian_Stiff]

Jon - You are making reference that RV is doing something wrong. I don't think really anyone has done anything wrong other than getting caught up in death spiral by the 'first set of struggling clubs' that decide to discount their price, from that point this is what happens, each club cuts each other by a £1 until the price is ratshit. The high users still see value the lighter users chose to golf a cheaper way, unfortunately it usually leads to these golfers playing less and less possibly even quitting the game.


What is happened and is continuing is easy for me to see as an operator and looking at the stats and patterns of play. I think the pattern Duncan brought up with 330 members and no space on a weekend is a likely future pattern for others.


I also think weather has played apart and I would say the weather of 2016 will see 1% quit their membership (5 or 6 at most clubs) those people will be fed up and maybe in the 6 or 7 weekends they have now not golfed, might have enjoyed going to watch football, fished, cycled or started on some home improvement or other hobby.


The HMRC should have a level platform for all golf clubs regardless of ownership. The rates are astronomical though set to drop by 21% shortly as the government as revaluing the position. We pay £124 per day currently, all it is is a ponce tax.