Jeff Brauer's thread on Wakonda club in Des Moines scrambling for capital in face of a shrinking membership raises a question - what percentage of the members at your club are 70 or more years old?

My guess is that the answer for many clubs will be 25% to 33%.  Replacing these members over the next 5 to 10 years will be quite a challenge.  It will be interesting to see how clubs are able to cope with this problem.  

Aaron,

I posted a somewhat similar thread on this topic as it relates to clubs targetting younger members about a month ago.  I spent several months trying to find a club here in the DC area (Northern Virginia).  I'm 31, so not all that different from yourself agewise.  

I found that several clubs did offer reduced intiation fees for prospective members under 35--not many, but some. However, all of these clubs required that the balance of the full intiation be paid upon turning 35.  Some clubs in other areas offer reduced monthly dues for younger members, but I did not talk to a single club in my area that offered such an option.  I also expect that you will have significant difficulty finding a club that is willing to waive an initiation fee in Boston.

Your wife brings up a salient point about mobility.  The DC area has one of the most transient populations in the country.  The joke in DC is that no one that lives in the area was actually born here.  It's a big issue at local clubs, because most have policies in place that require 2 or 3 new members to join the club before a member on the transfer list can get out.  Some clubs I talked to had adopted special policies to address members that are transferred out of the area.  Others offered reduced initiation fees for members that agree to sign a multi-year agreements.

Rather than adopting reduced or waived initiation fees, clubs around DC are trying to win over younger members by investing in pools and other facilities that appeal to younger members with families.  Many clubs in this area are bulking up children's activities and events for non-golfing spouses.  The wealth of children's activities at my club played a major role in getting my wife to buy-in to the idea.  

I see two issues:  (1) cost and (2) the hesitancy among younger generations to join associations of any kind.

Clubs in America will continue to decline until their prices fall.  Very few who work for a living can afford the initiation fees and dues at most clubs.  It is interesting how the golden age architects emphasized cost savings as a justification for their work and how that focus has all but disappeared at almost all clubs.

I just read an interesting book called "Bowling Alone" about a change in American culture that began around 1960 and has continued ever since.  It provides a wide array of statistics showing that people no longer join formal and informal groups as much as they did in the past.  The author argues that the erosion of this form of connection to others in society has significant negative impacts on society, ranging from health, political discourse, crime rates and so on.  

The aging of club members fits pretty closely with these general trends.  I know I viewed joining a club more in terms of access to a great golf course than to join a group of people.  I never had an inkling that joining a club would provide much in the way of enjoyable social benefits until I experienced them.  

Jason,

I wonder what Robert Putnam would say about the lack of young people desiring to join clubs with a $100,000 initiation fee!  I think that bowling leagues only cost about $100 a season.

As a course owner/operator I am looking for a good "mix" of ages.  Too many young members can be a bad thing as well even though it is unlikely to happen.

My club is a private golf club of 600 members (We cap full memberships at 475 and seniors at 125).  About 20-25% of my members are under 40, 55%-60% are between 40 and 55 and about 20-25% are over 55.

My fees are "affordable" for the area--$7500 for a full family membership ($259 monthly dues) and a senior membership is $2500 and $200 in monthly dues.

To attract the under 40's they can pay $2500 with their application, $2500 4 years later and the final $2500 seven years later.  If they are not still members of the club (moved away for example) they do not owe the second or third payments.  Also, dues for someone in their 20s are reduced 25% from the full rate and for the thirtysomethings the reduction is 15%.

Average "life expectancy" for a private memership is right at 7 years in my region so my thinking is that giving a young person that time period is fair and affordable.  Also, the club business is about dues, dues and more dues.  I want to make it as easy as possible to get qualified applicants in to start charging them dues!

My senior membership is only available to people over 55 and allows weekday golf only.  Seniors are crucial though to our success as they keep our course and tee sheet busy during the week between 8:00 and  11:30, normally a dead time for many private clubs.  In effect I have 600 members during the week and just 475 on weekends and holidays which are prime times.

Each group tends to play at diferent times and by keeping a good mix I can maximize my tee sheet.  If you had too many youngsters or seniors, they would compete for similar times and your course would seem crowded even with fewer members.  Conversely, a full and active club can keep people happy re: tee times if the demand is spread out.

BTW, unlike some private courses around me, in 33 years we have never had to use any type of "lottery" system for our members to book times.  I personally don't know why someone would join a private club only to have to get in a lottery for tee times, but some do.

Ideally, our regular 40-55 year old members "progress" to senior statues and make room for other full members (we currently have a 4 1/2 month waiting list).  Also, as the seniors can no longer play golf, they can then move to clubhouse status and come eat lunches, play cards, etc.

I know there is a lot of talk that clubs must cater to the younger families by offering every possible amenity--babysitting, tennis teams, pottery classes, aerobics, etc.  the trouble with that model is that in order to offer something for everyone, you have to charge a lot of money.  Time and other pressures easily pull young families away and how many young families with kids can justify $20k-$50k in initiation fees (even paid over time) plus $6k a year in dues!

My club is few frills--very good golf course but no swim, no tennis and our food is more burger and beer than filet and red wine, but I can keep my cost down and the young guy is able to justify my expense to his family.  

Now the younger family guy dosn't have to join a "lifestyle" club and spend every waking moment there with his family to justify the expense.  For $2500 down and $220 per month (if he is in his 30's) he can play private golf for 4 years before he owes a second $2500.  

For a while I offered a Conditional Membership geared to the person who may be in Atlanta for only a few years.  It was a two year membership for an ID of $2500 and monthly dues of $300 per month.  They had to pay more a month since they did not "commit" to the entire $7500.  Again, I was looking at the 40-50 something who was likely to be transferred.  Given my current membership situation, we do not offer it at this time though it was very popular in the mid 1990's.

(My club is in the Atlanta area just north in Alpharetta).  

Chris - yours looks like a terrific model.  I particularly like the way you make it affordable and allow for a mix of golfers that would use different tee times.  I also like the priority of great golf over other expensive amenities.  

Do you feel that the model segregates members into seperate groups and does that detract from the club in any way?

First, we have worked diligently for the last three years to attract a younger member.  254 regular and 267 house to be exact.  Our average age is now below 50.  On an ancillary point, our club offers a Hospitality committee which affords potential members new to the area or those that just don't know the required sponsor, second, and three recommendations (required to begin the traditional membership process) an opportunity for this alternate track.  Members of the Hospitality committee "socialize" the prospect and ultimately serve as the sponsorship for these candidates utilizing this non-traditional route.  Next, initiation fees are usually non-refundable where bonds or membership shares are.  Last, I think research is the key to this process.  If you are willing to spend hours deciding what ball to play or what hybrid to buy then time researching a club is well spent.

Chris Cupit -

Congrats on implementing a very forward thinking/enlightenend  approach to attracting members and sustaining them at your club. I am sure a lot of clubs could benefit by studying what you are doing.

However, it sounds like your club is a commercial business. Is that correct?

My post was aimed more at the traditional members-owned/equity golf club. I think those are the clubs that are facing a serious decline in membership over the next 5-10 years. I doubt enough of those clubs, to their detriment, will be as proactive in dealing with the situation as you have been.

DT  

Chris C. -

I think your comments are again right on. At 9 out of 10 private equity clubs, by the time the "powers that be" recognize there is a problem with their aging membership, it will almost be too late to do anything about it. The club will fall into the assessment-losing members-more assessments-losing more members vicious cycle you describe.

DT

 

The problem is even worse at residential community/clubs, where all or most of the membership comes from within "the gates." You can easily end up with a lot of people who purchased their homes when they were in their 50's - 60's and a few years later they are in their 70's - 80's. The oldest in the group still stay in their homes, but they don't play golf anymore, so they either resign or become social members. But by staying in their homes, they clog up the works for younger people to come in and join as active golf members.

In the face of all that, all that we've been able to do is to go out into the surrounding area and try to attract younger members with discounted memberships. It can work to a point, but there's still the obstacle of being seen as an outsider to the vast majority of members who live inside the community, a tough thing to overcome when the thing you are selling is all about recreation and commraderie.

We have been considering moving back to the States.  Aside from finding decent work in a decent climate one of the negatives of a move is certainly the club membership.  I don't fancy having to play public golf or start looking into overpriced club memberships.  

I think CC's pricing structure is a cracking idea.  While I feel for Aaron, I don't think a free ride into a club is good club policy unless they are looking to be a waiting room for members to join the next club up the ladder.  Joining a club should have some sort of financial commitment.  The commitment is on both sides which is fair enough.  This is why the graduated initiation fees are a good idea.  If after a few years the member decides the club is not for him he can walk, but the club still retains some cash benefit from a short timer.  

The problems discussd on this thread are the same problems clubs in the UK experience.  The big difference is most clubs are already operating purely as a golf clubs (not country clubs) and initiation fees/dues are already relatively low compared to the States.  How do clubs attract new members or keep old members without seriously reducing already fairly basic course maintenance?  We offer the graduated initiation fees, but they couldn't be waived because the club depends on this money for course improvements.  My fees are going up again next year to just shy of £700.  This is up from £400 in 1999. That is a 75% rise - quite substantial.  And I think our club has done a pretty good job (due to a committed committee) of balancing cost with improving the course.  

I am afraid the only real outcome will be course closures.  Courses closest to population centres will feel the pressure of closing down.  All it takes is a good offer.  

Ciao

Sean,

There are easy ways to contract around the "waiting room" problem.  Here is a deal I would be willing to sign on to, for example:  

Club's normal policy is $50,000 initiation and $550 monthly dues, with the initiation being refunded after 30 years or upon resignation and resale of the membership to someone on the waiting list (meaning the club must have reached its membership cap).  I would be willing to join at  $600 monthly dues, with the initiation fee waived unless I remained a member for 3 years; the club could cancel my membership at will with 30 days notice, and if I resigned my membership I would have to pay the club $5000 in liquidated damages if I joined another club within a 100 miles radius within the next 18 months.  I would even be willing to put some sort of bond up, so long as it was automatically refunded upon resignation.  

I think the above deal is eminently reasonable, and I think that club's could offer such a deal to anyone under age 35 and be able to justify the availability of such memberships to the rest of the club's members.  

Sean, your annual fees are a bargain compared to any US Club, not matter the market. I live in a medium size community and both clubs here have $250 to $300 a month fees. This is a great deal compared to many places.

Aaron,

There is the added risk in these parts of oversaturation. In addition to the many old, old clubs that will have a waiting list for the next 100 years regardless of what the market does, there are a number of very good new courses within an hour's drive. From Renaissance to Black Rock to Boston Golf Club and Turner Hill, there is a lot of competition right now for members. I think (hope) that in the next year or two prices might come down as a result. We might have been in trouble if Healey got elected and dropped the income tax rate to 5 percent, but that shouldn't be a concern any more.