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

[PCCraig]

I don't think clubs where property ownership is a requirement for membership should truly be considered national membership clubs...

Jud:

Why not?

[Jud_T]

Because they usually have some year-round residents........or maybe I'm simply wrong this 1 time!

[JC Jones]

...I just only see the model working for a handful of people. Those where money is no object, those whose life has the kind of stability where getting away on weekends is a regular occurrence, or those who -- because of family and their own interests -- dedicate most of their leisure time to golf to the exclusion of other things.  This appears to be a market that, despite record inequality in the United States (and thus more people for whom money is no object), would nonetheless be overall a shrinking market, rather than a growing one.

Let's ignore the ridiculous generalization of the rest of the paragraph and focus on the blue area.  I would argue that the type of club you're referring to in this thread wants it that way.  In fact, I know an owner at a newer and very well respected national club that espouses this very idea.  Most of these places want a membership that "get it".  Right now, it's hard to find 200 folks that "get it" for 50 grand.  But that will end one day.

Those that are willing to plop down some dough for a special experience will never go away.  There are times when the economy dictates that less of them are available.  But the population isn't shrinking.  And there will be a time when folks have more expendable income.  I can't agree that the model doesn't work.  It's hard right now for sure, but the model works.  It's been proven.

I heart Ben Sims. 

[Steve_ Shaffer]

I view the "private national club" as an equivalent to "fractional ownership" ( the nicer name for "time share.) I would have joined one 20 years ago but not now.

I like the Prairie Club's business model better.

[Ben Sims]

JC,

You edited!  Oh well.  I was going to say that your counterpoint was so good that I had no rebuttal.  I will next May though.  Scratch that, the club I will be joining isn't a national club, and that's one of the things I love about it.

[JC Jones]

JC,

You edited!  Oh well.  I was going to say that your counterpoint was so good that I had no rebuttal.  I will next May though.  Scratch that, the club I will be joining isn't a national club, and that's one of the things I love about it.

I wasn't sure if you had joined yet (only vaguely remembered you posting something about it) and didn't want to quibble over whether it was a national club or not.  I'm glad we agree that it is not a national club.

So, I will undo my edit and say:

Sorry, Ben.  You aren't a member of a national club so you have no idea what you are talking about.

[Ben Sims]

JC,

You edited!  Oh well.  I was going to say that your counterpoint was so good that I had no rebuttal.  I will next May though.  Scratch that, the club I will be joining isn't a national club, and that's one of the things I love about it.

I wasn't sure if you had joined yet (only vaguely remembered you posting something about it) and didn't want to quibble over whether it was a national club or not.  I'm glad we agree that it is not a national club.

So, I will undo my edit and say:

Sorry, Ben.  You aren't a member of a national club so you have no idea what you are talking about.

JC,

It's definitely not a national club.  But I am very excited to be a member.  Even so, from my personal standpoint, it still means I can engage in the argument.   

Back to the subject.  What's odd, is that a place like Ballyneal works and a place like Colorado GC seems to be struggling for funds.  Why is that?  I think it's about more than the golf course.  Location, amenities, and fees are all part of the puzzle.  It's complex, and I don't have the time nor the interest to delve into this further. 

Bottom line is that the model will work for as long as folks will pay the money.  I don't foresee the national club going anywhere anytime soon.  Too many people are doom and gloom around here.

[JC Jones]

Bottom line is that the model will work for as long as folks will pay the money.  I don't foresee the national club going anywhere anytime soon.  Too many people are doom and gloom around here.

Mike Sweeney's new nickname is Chicken Little. 

[Mac Plumart]

This thread has a really good subject and some truly excellent points for people to consider, especially if those people are considering joining and national/destination course.

John Kavanaugh makes a great point with his statement that "yes" the private national club business model will work if the membership is benevolent. 

Also, Justin S's analysis is really good and highlights things that I think are valuable to consider/discover. 

I am looking for a national/destination to join and have been looking for over a year.  During this year, I've consider/discovered many of the things he touches on. 

First off, if you are looking to make it work on a cost per round basis...I don't think you will ever join a club.  You can alway find cheaper golf.

This leads to the second point, which builds on John's point.  And that is this destination courses has to hold some special value to its members that is difficult to put a price on.  Most likely that centers on the experience of playing golf on the course and/or being at the club brings out some sort of feeling that is not able to be replicated anywhere else.  Find a group of people who feel this way about a certain course, and you will most likely have that "benevolent membership" that John talks about.

A few of these courses that I've seen people talk about on this site that appear to generate that feeling are, Ballyneal, Sand Hills, and Kingsley.  The members I've met from these courses flat out love them.  Nothing can replace them in their eyes.  Frequent comments like "it is my favorite place on the face of the earth" or "there is no other place I'd rather be" are made on the courses.  Other courses I've heard discussed like this from people who are not members of this site are, The Golf Club, Augusta National, and Cypress Point.   

Perhaps the lesson to be gleaned from this is that if you don't have that special feeling for the club/course, you shouldn't join.  There are a couple of clubs that I've stumbled across that I'd join instantly without doing any calculations at all on the finances.  Maybe that is the deal, you want to be at this club so much that it doesn't matter the costs.  As the "feeling" the club/course generates is, essentially, priceless to the members.

Frankly (as Justin touches on), I've had this feeling at some resort courses as well.  So, those could indeed be a de facto national club for some people.  And again, cost might not matter if the feeling is just so special.

[Brett_Morrissy]

Can I ask about costs in the States, and you UK also 

Specifically, in all you research, what range do the prices, for joining National Clubs, range?
And also, is it a given that a National Club is cheaper on both joining and annual costs because it is perhaps harder to get to and hence visited less?

If there is wide variation, what are generally the reasons for this?

[C. Squier]

Can I ask about costs in the States, and you UK also 

Specifically, in all you research, what range do the prices, for joining National Clubs, range?
And also, is it a given that a National Club is cheaper on both joining and annual costs because it is perhaps harder to get to and hence visited less?

If there is wide variation, what are generally the reasons for this?

I think the first question to be answered is if the club is a local club w/ national membership category or a club that is a destination club with a majority of national members. 

[Chris Johnston]

Can I ask about costs in the States, and you UK also  

Specifically, in all you research, what range do the prices, for joining National Clubs, range?
And also, is it a given that a National Club is cheaper on both joining and annual costs because it is perhaps harder to get to and hence visited less?

If there is wide variation, what are generally the reasons for this?

It only makes sense - the variation re: cost to join a premier national club (these days) is closely related to the amount of debt on a club.  The higher the debt, the higher the nut.  We have little debt at Dismal River and the cost to join is very low in relation to the experience - low cost also allows us to attract and bring in a great variety of passionate members.   It's a numbers game today.

Value works these days.  Everyone wants value. 

[brad_miller]

Given there are so many on this site looking to join some sort of National club or one with National membership  , maybe we should have a bake off of all the ones that one might be able to join just by writing a check, assuming one could produce a couple of golf solid golf references. Here are some that may or may not fit the bill.

Ballyhack, Ballyneal, Dormie, Prairie Club, Sutton Bay, Dismal River please add others....... we could compare, cost, dues, # of members, # of fully paid members that have joined in past 2 years and most importantly debt. Basically how does one determine the financial health of a club prior to joining? Would anyone want to be the 21st member of a club needing ~250 plus members to break even on an operating basis in this financial environment.

[Chris Johnston]

Given there are so many on this site looking to join some sort of National club or one with National membership  , maybe we should have a bake off of all the ones that one might be able to join just by writing a check, assuming they could produce a couple of golf solid golf references. Here are some that may or may not fit the bill.

Ballyhack, Ballyneal, Dormie, Prairie Club, Sutton Bay, Dismal River please add others....... we could compare, cost, dues, # of members, # of members that have joined in past 2 years and most importantly debt.

Brad - I don't think it appropriate to use the site to sell memberships.  I share Dismal River for perspective on various topics.  I am happy to chat or email with you but don't think it appropriate to use the site to sell our club.

[Mac Plumart]

Hey Brett...

I found initiation fees to be anywhere between $3,000 to $150,000 for national clubs.  And annual dues between $2,400 and $6,000.  Frankly, the cost difference seemed to have more to do with geographic location then quality of the golf course.


Brad...

I think the list of courses is WAY broader than that as each person's desires and tastes is so different.  For me, Ohio clubs are first priority as I spend a great deal of time there in the summer as I have family there.  I just had family move to Michigan, so Michigan clubs are on the radar.  I've investigated other desitnation clubs, but ran into many of the issues Justin talked about.  How often in a given year would I get there?  Things like that. 


I just think this topic is so personal and so specific to each person's needs each and every person needs to do their own analysis and reach their own conclusions.

 

[Sean_A]

I've always thought it a strange and mainly American phenomena - that of the national club.  To me, I don't want to bother bringing my party to a club all the time.  So I would want a local club with national membership.  That club would also have to have a lot of comps so I can just sign up and make my way to the 1st tee.  Otherwise, how in the heck does a club ethos/atmosphere ever develop with so few people hanging about?  I spose it takes all kinds and all kinds of clubs, but its not really for me.  Take away the club aspect and I figure one may as well just travel about playing with that national club cash, but then I suspect for many the cash doesn't mean much. 

Ciao

[Jeff Dawson]

Regardles of which club and where... Brad Miller makes a great point.  I would add that there are a number of questions you would want truthful answers to before making a decision.  As to cost...several new clubs are sort of like the airlines...each seat is a different price.  If a club does not have enough members paying dues to cover the operational cost I would want to know how they pay the difference and who is paying it?  How long are they willing to do so?  As far as debt goes just do the math.  If you are joining a club for 20k and they have 40 million in debt and operations of 1.5 - 2 million annually I would want to know a detailed plan as to how they get beyond that.  If a club has more than just a few million in debt and no waiting list I would be concerned.  The financial health is important because it controls the quality of the membership and eventually the quality of the maintenance of the course.  The expense of the project (land cost, build cost, etc.) is really the important factor for a destination national club.  Most great clubs with national memberships didn't cost much to build and could be sustained properly ie Sand Hills.  

[Mike_Young]

Back to the subject.  What's odd, is that a place like Ballyneal works and a place like Colorado GC seems to be struggling for funds.  Why is that?  I think it's about more than the golf course.  Location, amenities, and fees are all part of the puzzle. 

Ben,
Your statement above may be correct but I think often we never know which ones are actually making it and which aren't.....one could have a club that cost 2 millon to build and have 2 million debt while another might have cost 10 million and have zero debt...and then one might operate for 1 million while another might be 3 million....oh well...
How are you? 
Mike

[John Kavanaugh]

If you ask a club too many questions and they still want you as member that club is not for you.    

[Bart Bradley]

If you ask a club too many questions and they still want you as member that club is not for you.    

John:

I see you edited your original post...which said that it was important to act in accordance with "regret avoidance".  I will tell you that not asking questions may be the surest way to have have regrets.  It is always best to clarify an agreement before it is finalized.  If a place won't take questions in stride, it may be that the answers aren't so flattering.

Bart

[Peter Pallotta]

Hey, if JK has started editing his posts, and making them less interesting in the process, then anything is possible. So, sure - I say yes, the private national club business model still works!!

[Jim Jackson]

Good stuff in this post so far, fellas.  One of the things that's affected my search recently is that many well-designed, nationally notable (architecturally) clubs are making memberships available to national members; most of these have been hurt by the economic downturn but still have a large local membership group.  To me, this is a strong selling point.  Although the memberships I'm mentioning are not "equity" therefore don't include voting rights, and can't be resold, most national memberships like these also don't include assessments.  Really a nice thing to consider when compared to some of the national "destination" clubs.  I get the sense that these kind of memberships are more available than you'd think.

[Ben Sims]

Back to the subject.  What's odd, is that a place like Ballyneal works and a place like Colorado GC seems to be struggling for funds.  Why is that?  I think it's about more than the golf course.  Location, amenities, and fees are all part of the puzzle.

Ben,
Your statement above may be correct but I think often we never know which ones are actually making it and which aren't.....one could have a club that cost 2 millon to build and have 2 million debt while another might have cost 10 million and have zero debt...and then one might operate for 1 million while another might be 3 million....oh well...
How are you?  
Mike

Mike,

I wasn't really reading into too much.  I just based the statement on which was was operating out of a tent and which one wasn't.  

Things are pretty solid over here.  Weather is nice--really!  Iraqi pilot students seem to genuinely want to build something worth a hoot.  I asked them if Iraq ever had anything like a private athletic club, and one said he didn't think it was culturally okay to talk about one's private club in a public setting.  I didn't get the joke for awhile. 

[Brett_Morrissy]

If there are two types of Private: local and National and National only.

Which of these two have a better chance of survival?
- background for me, are there different entry level costs between the two, as this will effect it obviously - as discussed above, the signifcance of existing debt or ongoing net income are not to be disregarded.

[Chris Johnston]

If there are two types of Private: local and National and National only.

Which of these two have a better chance of survival?
- background for me, are there different entry level costs between the two, as this will effect it obviously - as discussed above, the signifcance of existing debt or ongoing net income are not to be disregarded.

Brett - there are differences in entry fee at every club and no distinct trend that I can see.  The Sand Hills based National club has a local membership...but...the locals are regional, covering a wider area that they typical local base.  Golf is undergoing a complete reset and, like most businesses, is deleveraging if it can.  In most newer National clubs (but there probably are exceptions) the higher the join fee, the more the indebtedness/cost to build relationship.

Unless a club has a line at the door, current reality is join fees have dropped substantially.  If a newer club had a high join fee, unless it is full, that would be a "red flag" for me.  Like everywhere else, the marketplace rules.  This is good for those who will survive - it will make becoming part of a club more about the passion/appreciation of the game, and less about the singular requirement to strike a big check to join.