[Craig Disher]

Private club, not member-owned. Yearly dues up 50% over 5 years (8K to over 12K), 10% from 2024 to 2025. I have no idea of the revenues or expenses but the golf and f&b staff has increased. Course conditioning has been about the same. There have also been significant cosmetic improvements to the areas surrounding the clubhouse. I believe the owner is doing well as the membership to over 600 and increased accompanied and unaccompanied guest play has made it much more difficult for members to secure a convenient tee time.

[John Kavanaugh]

Thank God for owners.

[Carl Johnson]

Our private member-owned (nonequity) club just jumped initiation from $40,000 to $65,000 paired with an assessment of $18,750 to existing members (reduced for members over age 65, etc.).  We lost about 50 of 500 members as a result of the assessment, but had no trouble at all filling those spots from the wait list, so I have heard.  Plenty were in line who were willing to go the full Monty.  The assessment and initiation kick up were to pay for a new clubhouse and some golf course infrastructure improvements (e.g., irrigation systems).  What will be telling is how the dues increases (decreases not expected) go over the coming years, but as someone once said, predictions are hard to make, especially about the future.  Dues increases for calendar year 2025 haven't been announced yet.

[Ira Fishman]

Thank God for owners.

I thought you said that gentlemen don’t discuss economics :-)

[Chris Hughes]

As a golf course owner, I can assure you that the cost of running a golf course is up dramatically.  Even for member owned non-profit clubs.  At nearly all clubs, labor is the largest single line item, in some cases almost 50% of total expenses.  For some positions at my course, the starting wage is up almost 100% since the start of COVID.  Other positions have not been affected as much, but they are up as well. The number of hours is also up, as the increase in rounds means more pro shop staff, more outside staff, and more restaurant servers.  That's not an increase of thousands of dollars, it's easily hundreds and hundreds of thousands of dollars or certainly more than a million dollars for many clubs. 


Insurance is up by 2X or 3X, property taxes are up, mower prices have doubled and you can now easily pay a hundred thousand dollars for a single mower.  And there is NO used equipment at any price.  Any project requiring outside contractors is up 50%.  Sorry, but we are not immune from inflation and our heavy reliance on labor means we are are seeing more inflation than other industries.



If your private club has $5M in expenses, then a 20% increase overall is a million dollars.  And 20% could be just one year's hit. 
 
If your club was full, then the number of members hasn't changed, so clubs (even non-profit) can either cut services or raise fees, and nobody is looking to cut services right now.  Quite the opposite, members are demanding better conditions to keep up with the club next door.  If you divide $1M by 400 members, that's $2,500 a year per member.


Throw in a dining room renovation, increased maintenance, or an irrigation project and now you're talking real money. 


Sorry to break it to you, but it's math.

Presumably there are significant revenue offsets for the expense increases you outline?

[Chris Hughes]

Great post; thank you.


My club (member owned) went through a very lengthy and very careful process in 2022 and 2023 to determine the next steps for both facilities upgrades and improvements.  The determination was made that there would be a bunker renovation, a new pool and pool house to replace the original ones from 1966, and 4 dedicated pickleball courts.  (The pool/pool house and bunkers were much more deferred maintenance than just capital improvements.)


There was a $4k per membership unit assessment, and the bunker work, which required no permitting, proceeded last winter. The financing of the project also included a $50/month dues increase that would take effect when the demo on the existing pool began.


By the time we closed the pool for the season and had all the permits in place to begin that work, costs had gone up so much that the club had to borrow an extra $1 million and change above the projections from just a year earlier.


All of this has happened at an extremely well-run and financially healthy member-owned club.

As a %, how much was the $1,000,000 overage vs. the original estimate?

[A.G._Crockett]

Great post; thank you.


My club (member owned) went through a very lengthy and very careful process in 2022 and 2023 to determine the next steps for both facilities upgrades and improvements.  The determination was made that there would be a bunker renovation, a new pool and pool house to replace the original ones from 1966, and 4 dedicated pickleball courts.  (The pool/pool house and bunkers were much more deferred maintenance than just capital improvements.)


There was a $4k per membership unit assessment, and the bunker work, which required no permitting, proceeded last winter. The financing of the project also included a $50/month dues increase that would take effect when the demo on the existing pool began.


By the time we closed the pool for the season and had all the permits in place to begin that work, costs had gone up so much that the club had to borrow an extra $1 million and change above the projections from just a year earlier.


All of this has happened at an extremely well-run and financially healthy member-owned club.

As a %, how much was the $1,000,000 overage vs. the original estimate?

Good question.  I’m sure I can find that, but I’ll have to do some digging.  And it’s perhaps a little hard to separate out because the bunker project (repairing drainage, capillary concrete, all new sand, sod around the edges) was completed and paid for before the permitting for the rest of the project was even complete.  There was an additional issue when some asbestos was unexpectedly found in the pool house, which changed the demo procedure and cost.


I’ll see what I can find on that; interesting question.

[Tags:]

Tags:

[Tags:]

Tags:

Call to undefined function theme_linktree()