Are munis the beneficiaries of the private club fallout?

[Joel_Stewart]

I was at a muni yesterday to have some grips replaced and was shocked to see the place was packed with people.  Furthermore the driving range had at least 30 people hitting balls and the practice putting green had 12 people (I counted).

Considering the NY Times article and the fallout at private clubs, public golf must see a resurgence.  It might have something to do with unemployment as well?

[Kalen Braley]

I was at a muni yesterday to have some grips replaced and was shocked to see the place was packed with people.  Furthermore the driving range had at least 30 people hitting balls and the practice putting green had 12 people (I counted).

Considering the NY Times article and the fallout at private clubs, public golf must see a resurgence.  It might have something to do with unemployment as well?

Joel,

Depending on where you live this could be more than easily explained by the weather.  Having lived in Utah and Spokane, WA for the last 8 years, the range is always packed this time of year with people pulling out the clubs and firing up the golf game again.  Usually after a couple of months, it seems to settle back to its normal numbers.

And I can't blame them, nothing better than getting back to it after 4-5 months of cold cruddy weather and seeing all the flowers popping out, the birds chirping, and the warm sun coming down on you again. 

[Adrian_Stiff]

I think the answer is yes. People will still play golf but they will play cheaper. The clubs that will suffer most will be the better clubs.

[Matt_Ward]

Joel:

There's plenty of shake out that's needed before the ship is saved.

Too many courses and driving ranges need to create price points that ENCOURAGE people to play. I am less concerned with private clubs because those that were strong prior to the economy going downhill will fare better -- although bruised in other ways.

When I see driving ranges charge $15 for a large bucket of balls -- mind you they are not Pro VI's you are hitting -- and should a family attempt to go out and hit 3 such buckets with 4 people in tow the overall costs do ass up quickly.

Joel, you make the assumption that public golf -- I call muni's those layouts owned by the taxpayers -- are also suffering. The NY Times articles did feature a photo of a course in Union County NJ (Oak Ridge) which has also closed -- possibly permanently.

So I think it's hard to say that the focus of the downward spiral is just at the private side -- public oriented facilities likely will need to make their adjustments as well.

[Mike Sweeney]

From the NY Times article: "Already, far more people play golf at public courses than private ones. Of the estimated 28 million golfers in the United States, about 2.1 million belong to private clubs."

___________________________________

Private golf is a drop in the bucket of golf. Okay maybe not here on GCA.com, but out there in the real golf world 95% of the operators are worried about the 25.9 million public golfers that may play less.

[Greg Chambers]

The NGF just released a report stating that the majority of golfers won't reduce the number of rounds they play, but they will choose to pay less for the golf that they do play.  This plays right into the hands of the muni's and the lower price point public facilities. 

[Michael Powers]

I think the answer is yes. People will still play golf but they will play cheaper. The clubs that will suffer most will be the better clubs.

The clubs that will suffer the most are the ones that carry the most debt, operate with a smaller membership, and lost a substantial number of members.  Well established clubs with big rosters and little debt will be fine.

[PCCraig]

At the local muni where I take lessons they sell unlimited "memberships" to residents and such. According to the pro they have lost a few members, but overall they are up 5% in member total.

[Mark_Fine]

Joel,
Most definitely public and municipal courses are going to benefit from all this mess.  I know just in this area alone, several local private clubs have had dozens of members resign their memberships opting to play public and muni golf.  They can't justify the private club fees and expense.  The good news is that they are not leaving the game, they are just changing venues.
Mark

[John Burzynski]

While I am sure that muni's will benefit, I suspect that the weather is probably the case with a packed course.  This past two weekends, most of the courses opened around here, and they are always packed on a Saturday or Sunday for a few weeks.  As the weather warms and summer trips and outings arrive, the afternoons and evenings get less and less crowded on weekends.  Monday and Tuesday were nice days around here but there weren't 7 cars int he lot at my muni course at 4PM.

[Rob_Waldron]

Joel

Our total rounds at 62 comparable courses were actually up in 2008 over 2007! Maybe good playing conditions, excellent customer service and affordable rates do mean something to golfers!

[Mark_Fine]

I don't think it is weather related.  This could be a real boon for public golf.  There is no arguing that private club memberships are suffering across the country.  I suspect most of those golfers who gave up their membership are still going to play golf somewhere.  Where else would they play? 

[C. Squier]

There is no way (IMO) that public courses are already feeling any time of uptick due to private golf memberships being given up.  I'm guessing most who have given up memberships have lost jobs or are having a tough time for another reason....no way they're teeing it up somewhere else already.

[Mark Kinney]

 Posted by: Michael Powers  Posted on: Today at 12:37:36 pm 
Insert Quote 
Quote from: Adrian_Stiff on Today at 10:48:36 am
I think the answer is yes. People will still play golf but they will play cheaper. The clubs that will suffer most will be the better clubs.


The clubs that will suffer the most are the ones that carry the most debt, operate with a smaller membership, and lost a substantial number of members.  Well established clubs with big rosters and little debt will be fine.




Adrian,

As far as daily-fee golf goes, IMO (from what I see throughout the Scottsdale/PHX area) is that the courses that will suffer the most will be the mid-range courses.  The munis and low-fee courses will have increased play due to price.  This will come at the expense of mid-priced courses that are of the same/ slightly better quality.  These courses will be forced to compete on price more than ever.  Are those facilities run well enough to deal with lower revenue, and lowering expenses?? 

The high-end daily fees can reduce prices if needed.  They also have many excess expenses that can be reduced both in the labor and maintenance areas (IMO more so than mid-priced courses). 


Michael,

You are so correct.  It all comes down to how each club operates, the debt service they have, etc.  Clubs, both private and daily-fee, that are run well and are creative in their marketing, cost cutting, etc. will do the best.  It's just like what we'll see throughout the entire economy.  The best run businesses will survive, and perhaps even thrive while the poorly managed will struggle/close.   

[Mark_Fine]

Clint,
One local private club in our area has had 50 members resign this year alone.  Do you think all those guys have given up the game of golf?  If not, where do you think they are playing?  Courses here are open year round unless it snows.
Mark

[Ronald Montesano]

For a full member, Adrian, that was not a well-thought statement.  In western New York, CCBuffalo, Crag Burn, Niagara Falls, Cherry Hill and other top-tier clubs will not suffer in the least.  Their older members don't give a rat's tail about their costs, as the clubs represent a home for the past 40+ years.  They have lowered their initiation costs to attract a newer generation of members.  The clubs that will suffer are the River Oaks, the Niagara Frontiers, the Lancaster(NY)s, the Fox Valleys, the ones that have less-monied members who joined just to say they belong to a private club.  They can now head over to Diamond Hawk, Ivy Ridge, Arrowhead, Harvest Hill or Glen Oak, high-end public venues that max out at $50 per round with cart (Buffalo Prices!)  The true munis, the county, city/town and state-owned courses will continue to sell tons of resident passes, set 6-minute tee times and pack the course with as many sheep as possible.

[Mike Sweeney]

Clint,
One local private club in our area has had 50 members resign this year alone.  Do you think all those guys have given up the game of golf?  If not, where do you think they are playing?  Courses here are open year round unless it snows.
Mark

Okay 50 members times say 40 rounds per year is 2000 rounds picked up by the local public courses. Tee Time King list 33 public courses in the Lehigh Valley:



That would mean that each course on average picks up on average of 66 additional rounds. Lets assume those courses do 8000 - 12,000 rounds per year on average, you are talking about less than a 1% pickup per course. If you had 10 private clubs that  each lost 50 members, you are still talking about 5% pickup.

[C. Squier]

Clint,
One local private club in our area has had 50 members resign this year alone.  Do you think all those guys have given up the game of golf?  If not, where do you think they are playing?  Courses here are open year round unless it snows.
Mark

Did they give up golf?  Yes, if they quit because they've been laid off or facing other economic worries I would suspect that golf is not high on the priority list.  

It is possible once things shake out, public golf will benefit.....but as I said originally, I don't believe that is already happening at private golf's expense.

CPS

[Adrian_Stiff]

Better can take on many different interpretations. I will try and explain what i mean.

Firstly my main belief is that people will want/need to play cheaper, sopeople will play on lower priced golf courses or courses that discount their fees, the more expensive priced courses will simply take less in revenue if they discount. Somewhere like TOC I think this year will have many days where the ballot is not used; PB will have a lot less play so will have a substantially smaller income, if they discount the price the result may be the same.

In the UK, there is not a lot of corporate business about, ie the company days, 'the all paid treats for the customers'. That might be down 75-80%, no company in their right mind can justify spending £4000 on a company day then lay off staff. Harrys 40th b/day group for 12 will still happen, but Harry will want a deal. The buisness that is there will be done at a much smaller margin. The 'better clubs' will suffer because their will not be top money around. The 'better clubs ' will suffer with membership loss because many of their members are perhaps in finance, real estate, banking or other well paid jobs that are significantly suffering more from the economic fall out, some people with high gearing have gone from hero to zero, so for them there is NO money. With few people in better financial positions than last year there will not be the depth of members to take up the gaps.

I am not saying better clubs will go bankrupt, although some as quite rightly pointed out with a high debt burden will/may. Some clubs with an older membership will have little problem.

Lesser, poorer, cheaper courses have less to fall, bigger better clubs with a $3,000,000 income stream from last year could see a 25% drop in revenue, if they are on a 8-10% profit margin, that could be quite a suffering.

The facts are we are agreeing tough times ahead, if we agree that low priced courses will do okay then equally the higher priced courses will be the ones that fare not so good . (The higher priced courses are the better ones, that does not mean every top course btw).

We have done 50 new members since Jan 1. Our society bookings are down 25% but the bigger days are down 75%. Almost ever phone call want discount and deals...We are budgetting for a small loss this year.

[Mike Sweeney]

The facts are we are agreeing tough times ahead, if we agree that low priced courses will do okay then equally the higher priced courses will be the ones that fare not so good . (The higher priced courses are the better ones, that does not mean every top course btw).

We have done 50 new members since Jan 1. Our society bookings are down 25% but the bigger days are down 75%. Almost ever phone call want discount and deals...We are budgetting for a small loss this year.

I belong to a golf society in New York, and the courses this year includes a number of Tier 1 clubs that typically are not on the list, so an argument can be made that the middle clubs will get squeezed.

April 30th: The Creek - Locust Valley, NY
May 14th: Sleepy Hollow Country Club - Scarborough, NY
June 23rd: Sunningdale Country Club - Scarsdale, NY
July 9th: Rockrimmon Country Club - North Stamford, CT
July 23rd: Knickerbocker Country Club - Tenafly, NJ
August 6th: The Whippoorwill Club - Armonk, NY
August 20th: The Tuxedo Club - Tuxedo Park, NY
September 15th: Fairview Country Club - Greenwich, CT
October 1st: Metropolis Country Cub - White Plains, NY
October 8th: Quaker Ridge Golf Club - Scarsdale, NY
October 20th: Westchester Country Club  - Rye, NY     

[Steve_ Shaffer]

Here in the Philadelphia area, one club has about 75 resignations.  Another has lost 60,most of them joining a nearby club.

At a local muni, I hear reports that resignees from yet another club are negotiating to purchase standing weekend tee times.

A lower cost, a la carte,  annual fee local club is picking up resignees from other clubs.

Many members are taking a leave of absence or dropping to social memberships.

I had dinner last night with  a friend who has resigned his membership after calculating his cost per round at $450 last year. His business is doing ok, he has a summer house at the NJ shore and will play his golf there on a daily fee basis.

It will be a busy season at the local munis and daily fee courses.

[Jason Hines]

My private club in Kansas is going forward with a marketing plan that if we get to a certain membership number through a membership drive, everyone else’s due will shrink.
I have a couple of variables that would be interesting to quantify.  How have course closures influenced other muni playing numbers?  That could be a factor just as much as private members dropping their memberships.
Also, how many muni players are dropping out?  For instance, the guy who plays once per month so he can get plowed with his buddies.

[Jason Topp]

My current club will clearly need to battle through some fallout but the muni I played prior to joining will have some battles too. 

Many of the guys in the mens club there lost their jobs in the last six months.  It is unclear whether they will be able to play at all this year.

[Wayne_Kozun]

I think the answer is yes. People will still play golf but they will play cheaper. The clubs that will suffer most will be the better clubs.

So you mean places like Augusta National, Seminole, Cypress Point, Merion, Pine Valley?

I don't think the better clubs will suffer - the ones suffering will be new private courses that never got a full compolement of members and other mediocre private clubs as the time is ripe for people to "upgrade" clubs if they have the money.

[Adrian_Stiff]

I think the answer is yes. People will still play golf but they will play cheaper. The clubs that will suffer most will be the better clubs.

So you mean places like Augusta National, Seminole, Cypress Point, Merion, Pine Valley?

No.