The New Trend in Private Golf Clubs?

« **on:** June 29, 2005, 05:57:13 PM »

Looking at most of the highly regarded new private courses in America; it appears they all have one thing in common

…money…and lots of it.

Has an architecturally significant private golf course been built in that last decade with an initiation fee under $100K?

I’ve read posters on this board comment about how the atmosphere at places like Friar’s Head and Kinloch should be models for other clubs to emulate…that over 400 members (even less sometimes) is too many.

I’m sure those places are wonderful, but should that really be something we try to emulate over and over?

Is there something wrong with having a thousand members and having to call a few days in advance to get a good tee time on the weekend? Is there something wrong if the guy in the pro shop doesn’t know your name, or you see another member in the locker room you don’t recognize?

Obviously the market is there right now for $100K+ initiation fees and annual dues around or above $10K, but it’s kind of sad in a way that membership at the newest architectural gems is available to only the ultra-rich…

« **Reply #1 on:** June 29, 2005, 06:01:30 PM »

Unfortunately this trend has found its way to the UK. Many major new developments are of that kind. At the other extreme there are lots of low-budget/low-cost paublic access facilities. There is very little in between. Of course, what I imply by high-budget is way below what that term implies in the US.

« **Reply #2 on:** June 29, 2005, 06:10:59 PM »

"Is there something wrong with having a thousand members and having to call a few days in advance to get a good tee time on the weekend?"

In a word.......YES! If someone cannot come up with the ching for a new private club, join an older/established private club. There are plenty around depending where you live. And very few older clubs are more than 100K or even 50K, even in the most populous areas.

« **Reply #3 on:** June 29, 2005, 06:12:08 PM »

Cabell - I think it comes down to a question of land cost and debt service. You'll discover that most of the architecturally significant courses charging the type of fees you describe happen to be located in areas where land costs are nearly prohibitive, or, at the very least, near large population centers. Examples of this would obviously have to include Friars Head, Sebonack, Boston, Nantucket, etc.

On the other hand, I think you'll find that a number of the really significant courses that don't charge the type of fees you cite are located in areas where land costs are more reasonable, e.g. Sand Hills, Kingsley, etc.

I'm really not sure there is much that can be done about it save finding a group of investors who are willing to bleed it out.

« **Reply #4 on:** June 29, 2005, 06:22:37 PM »

I have not seen a new course built that is low cost, either public or private. It seems that all the new courses are either of the $100,000 private membership kind, or the $60-$100+ daily fee type. I doubt that building lower-cost, lower ambition facilities is cost effective in this day and age. If money could be made doing it, then someone would try it.

« **Reply #5 on:** June 29, 2005, 06:30:34 PM »

Quote from: Cabell_Ackerly on June 29, 2005, 05:57:13 PM

Looking at most of the highly regarded new private courses in America; it appears they all have one thing in common

…money…and lots of it.

Has an architecturally significant private golf course been built in that last decade with an initiation fee under $100K?
YES

Hidden Creek is one of them[/color]

I’ve read posters on this board comment about how the atmosphere at places like Friar’s Head and Kinloch should be models for other clubs to emulate…that over 400 members (even less sometimes) is too many.

I'm a little bit confused.
On one hand you and others criticize the high cost of private golf clubs built in the last ten years, and in the same breath praise Friar's Head, which charges around $ 300,000 to set your foot in the door.

You can't have it both ways.[/color]

I’m sure those places are wonderful, but should that really be something we try to emulate over and over?

Is there something wrong with having a thousand members and having to call a few days in advance to get a good tee time on the weekend?

YES, there is something wrong with that.

Who would be foolish enough to pay to play under those circumstances ?

And, by the way, how many good tee times do you think there are on a weekend ?[/color]

Is there something wrong if the guy in the pro shop doesn’t know your name,

YES, there is something wrong with that.

It would be like me not knowing the names of my clients.
It's my responsibility to know the names of my clients and their needs, and so it should be with the pro shop.

Unless, generating additional business, and performing the tasks he's paid to perform aren't important to you.[/color]

Obviously the market is there right now for $100K+ initiation fees and annual dues around or above $10K, but it’s kind of sad in a way that membership at the newest architectural gems is available to only the ultra-rich…

You're right, these private clubs should be obligated to accomodate anyone who walks through their doors.

The fact that the cost to acquire the land, build the golf course, clubhouse, and operate the facility costs millions upon millions, to the developer/s on an ongoing basis, should be immaterial.

You should have a right of entitlement to just walk in, play golf, eat breakfast lunch and dinner and enjoy the facility as much as you want for $ 225 per year, or is that too much ?

Perhaps they should pay you to frequent their establishment.[/color]

« **Reply #6 on:** June 29, 2005, 06:34:14 PM »

How very sad that you are talking of $50K or $100K! Some - most - 18-hole private clubs in the UK are still only £300 or £400 a year and I rather suspect that the majority of UK clubs average well below £1,000 per year. On the whole our courses are not maintained to the level of those in the US (except that we can count on playing ours 12 months a year) but to be able to play so easily (and for affordale visitors' green fees) is surely an incentive to those who wish to play, whatever their race, profession, religion or education.

« **Reply #7 on:** June 29, 2005, 06:37:26 PM »

Mark,

Are they NEW courses built in the last 10 years when acquisition and operating costs were sky high, or, are they courses that are considerably older that have retired their initial start up costs ?

For years and years, some of the most exclusive golf clubs in America were low cost to join and play, but, they didn't pay 10, 20, 30, or 40 million just for the land.

« **Reply #8 on:** June 29, 2005, 06:47:24 PM »

Patrick,

On the whole very few here are prepared to take that risk on the land. You've got to know it's a winner such as Kingsbarns or Loch Lomond (although that went bust and lay fallow for some years) or be very close to London - the Wisley was the only shareholder club for some years.

Ireland has been a different scene with many, many big-money new ventures. Its bubble is surely to burst.

Mark.

« **Reply #9 on:** June 29, 2005, 06:51:38 PM »

Patrick,

I should also have said that we are reaching the point of having sufficient golfing provision available. We now have city clubs abolishing joining fees and having no waiting lists because of the newly available pay-and-play simple courses.

I was talking with the secretary of a local private club the other day. He was saying that these new pay-and-play places should not be allowed because potential new members are going there rather than to his club. 5 years ago his club had a closed waiting list....

« **Reply #10 on:** June 29, 2005, 06:57:16 PM »

Pat – thanks for a thoughtful and insightful post.

Sean and Kirk – I understand what you guys are saying, but I’m not really talking about building something for less. I’m talking about building the same thing, but doubling – even tripling the membership numbers to bring the cost per member down.

I’m sure it would require some type of demographic study (and maybe it’s already been done), but instead of looking for 300 guys to join at $100K w/ $10K annual dues, might there just as easily be 900 or more guys out there willing to shell out $40K to join a club w/ annual dues in $4K range?

Don – older established clubs can be even harder to get into, as it requires even more than just money…which isn’t such a bad thing.

« **Reply #11 on:** June 29, 2005, 07:00:04 PM »

Cabell

Isn't a little difficult to comment on the "atmosphere" of certain clubs when the membership rosters are not complete? Isn't it the members that are partially responsible for the "atmosphere".

Won't the "atmosphere" also change once all the members have ponied up the money (what is the admissions process?) and all the facilities are able to be completed.

« **Reply #12 on:** June 29, 2005, 07:06:52 PM »

Quote from: HamiltonBHearst on June 29, 2005, 07:00:04 PM

Cabell

Isn't a little difficult to comment on the "atmosphere" of certain clubs when the membership rosters are not complete? Isn't it the members that are partially responsible for the "atmosphere".

Won't the "atmosphere" also change once all the members have ponied up the money (what is the admissions process?) and all the facilities are able to be completed.

um..................yes

Perhaps I need to clarify that I’m not criticizing the atmosphere at place like Kinloch or Friar’s Head. I’ve been fortunate to play Kinloch a number of times as a guest and think that the course and atmosphere are wonderful.

My only point is that I believe you can still have a great club with a great atmosphere with more than 300 members.

« **Reply #13 on:** June 29, 2005, 07:12:22 PM »

Cabell

There are many clubs in the UK with memberships of 800-900, sometimes 1000. It is quite common to have 600-700 members with no tee time reservation necessary and the pro still knows everybody. As Pat said, its his job to know his clients. I would find it quite difficult to join a club with reservations as a necessity. Mine is a club, like many, which allow visitors, allow societies and have comps. every weekend in summer. Why are tee times so necessary in the States with such small memberships? I like the show up and throw your ball in the shute or get into the throw-up attitude. If I wanted to make reservations, I wouldn't have joined a club.

Ciao

Sean

« **Reply #14 on:** June 29, 2005, 07:14:09 PM »

If you don't like it don't join. If all you get out of it is a better product (better GCA) then what is wrong with that. If people want to charge $100K then charge it if they can get it.

There are enough good values out there also. A lot of the courses that get talked about on this web-site, Ballyneal, Harmony, etc. that gathering membership offer somewhat reasonable national membership opportunities. If you are willing to throw down $15-$25K for initiation and $3-$5K a year you can belong at almost all of these new privates....not the $100K that you talk about.

« **Reply #15 on:** June 29, 2005, 07:19:33 PM »

Brian,

Interesting figures! They are still a long way above what most in the UK would pay, even though much lower than other US figures.

« **Reply #16 on:** June 29, 2005, 07:19:55 PM »

Sean - I belong to a club with a lot more than a thousand members and tee times are not a necessity…

but they might save you some waiting on a Saturday morning.

« **Reply #17 on:** June 29, 2005, 07:26:29 PM »

Quote from: Brian Cenci on June 29, 2005, 07:14:09 PM

If you don't like it don't join. If all you get out of it is a better product (better GCA) then what is wrong with that. If people want to charge $100K then charge it if they can get it.

There are enough good values out there also. A lot of the courses that get talked about on this web-site, Ballyneal, Harmony, etc. that gathering membership offer somewhat reasonable national membership opportunities. If you are willing to throw down $15-$25K for initiation and $3-$5K a year you can belong at almost all of these new privates....not the $100K that you talk about.

Brain - I look at it this way...

my wife would be OK (and this is really pushing it) with me throwing down $40 - 50K for a golf club and playing a few times a month or more with dues in the $400 range.

she's not going to be OK with me throwing down $20K to join a club where I might play 10 rounds a year for $200 a month...that's not even taking into account the travel expenses and time away from home.

« **Reply #18 on:** June 29, 2005, 07:33:51 PM »

I agree....all I'm saying is don't join then. I don't look at it as a bad thing because usually these courses are great courses and worth the money. If it improves the quality of golf then I'm all for it. I don't have the resources to throw down that kind of money but if I did I would. I see nothing wrong with courses charging what they do. Now...if the golf is not that good then they are just being foolish and overpricing themselves. But, its there mistake.

I am more of a public course golfer anyways and one of the few people who probably think there are better public courses then private courses (top 100 vs. top 100). Plus if you really want to play a private course (99% of them at least) you can always find a way. I've played so many top privates by just writting letters to the pro or board of directors before I ever joined a private course myself to get recipricals. Bottom line is let them charge what they want....there are so many good public courses out there to go around.

« **Reply #19 on:** June 29, 2005, 07:40:22 PM »

Cabell

If it is busy (it is quite rare to wait for more than 15 minutes), we usually play snooker, have a putting contest, have a chat over coffee or try to play off the 10th with 8 irons if necessary. After doing tee times for years at public courses, it is a relief to just show up.

Ciao

Sean

« **Reply #20 on:** June 29, 2005, 07:54:41 PM »

As in most situations, the laws of supply and demand will provide the final answer. Some of these high end expensive clubs are struggling to fill their rosters. Real estate is the big expense with any new club which is why, as Pat said, some of the classics are much less expensive. If there are enough people willign to pay the big fees, then it is right because obviously the demand is there. I personally would not want to join a club where I had to fight for times and no one knew who i was. I think if someone makes a big personal investment in building a new club, something that more often than not is not a way to make a lot of money, they have every right to try and recoup their costs.

« **Reply #21 on:** June 29, 2005, 07:59:00 PM »

Quote from: Cabell_Ackerly on June 29, 2005, 07:06:52 PM

My only point is that I believe you can still have a great club with a great atmosphere with more than 300 members.

Cabell,

Last year, I moved from a club with 600-650 avid golfing members, to a much quieter club with a fair-weather playing membership of 225. It costs me approximately 1/3 more in dues, but the difference in atmosphere and availability of tee times is worth much more.

TK

« **Reply #22 on:** June 29, 2005, 08:49:27 PM »

I was at one last week with a $2.5 million initation and dues of $155,000 per year. 25 members.

« **Reply #23 on:** June 29, 2005, 09:06:57 PM »

Quote from: Mark_Rowlinson on June 29, 2005, 06:51:38 PM

Patrick,

I should also have said that we are reaching the point of having sufficient golfing provision available. We now have city clubs abolishing joining fees and having no waiting lists because of the newly available pay-and-play simple courses.

I was talking with the secretary of a local private club the other day. He was saying that these new pay-and-play places should not be allowed because potential new members are going there rather than to his club. 5 years ago his club had a closed waiting list....

Mark

this same challenge has occurred down-under in Australia. In Adelaide, the premier sand-belt clubs still have waiting lists - some only just (their prices are low by world standards, perhaps $4k joining, $2k pa) but other clubs waiting lists have disappeared. These latter clubs are reviewing how they manage joining fees and the annual fees for old vs new members. The downward trend in membership commenced in Australia in about 1997 (in line with my club's experience, but also from a national survey conducted by Ernst & Young for ther AGU). The availability of better quality courses on a pay-for-play basis, albeit some 60 minutes drive away seems more attractive for those that might otherwise only play once a month. It is a challenge that the traditional club is trying to address.

I do not expect that the pay-and-play courses are necessarily profitable - they are generally an adjunct to improving the adjacent land value for sales. However, it is a new market dynamic. If an existing club does not have attributes that members value, the club may well disappear. An old hills course here closed a couple of years ago, partly through declining membership, partly throughfinancial/land ownership issues. Interstate, a very old Club in a major provincial centre also closed.

I am very glad that we do not have significant start-up costs or land costs in my clubs annual budget.

« **Reply #24 on:** June 29, 2005, 09:11:34 PM »

I "belong" to a "club" that apparently many here would not even considering joining. Fair enough. The "club" has 36 holes, 18 of which are open to the public Mon. through Fri. and after noon on Saturday and Sunday. They run an incredible number of outings on the public side, thus no increase in dues since I've been there. The clubhouse and dining room are open to the public. Extremely low five-figures to join. No food/beverage minimums. No caddies. Walking any time. As long as your picture's not hanging in the post office and the check clears, you're in.

The golf staff knows my name, though I could care less. I doubt I know 10% of the "membership" and they're not missing much by not knowing me.

Atmosphere means nothing to me. Or maybe I just can't afford it. I fully understand why others feel differently.

I rarely book a tee time. I just show up and play, mostly late in the evenings when I can get around in 3:10 walking and carrying. Occasionally I host clients.

Never in my wildest dreams did I envision the opportunity to regularly play such a nice golf course, though it's probably a 4 on the Doak Scale.

I don't think I'm missing much. Please don't tell me differently and burst my bubble.

Mike

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