How will your club survive in 2010?

[Patrick_Mucci]

Carl Nichols,

At one time Woodmont had a published waiting list of 250.

That's really incredible.

But, clubs spent money on facilities other than golf, increased their operating budgets to levels that were almost unsustainable in good times, never contemplating what might happen should the tide turn.

Not one club that I know of had a contingency plan should the economy sour.

EVERY Board failed in that regard.

EVERYONE thought that the good times would last forever, except for the older members who went through the great depression, and by 1990, they were often out of power at the club.

[Jason Topp]

. . . . in spite of itself.

[Roger Wolfe]

Also, given the longer winter season, it fits very well with clubs that want to offer their members recreational opportunities. For many clubs in Canada, it's a necessity to maintain interest and revenue. (I attended a bonspiel or tournament at a very well known club in those that don't play a lot of golf) use in the winter.   This, combined with  paddle tennis, makes the club attractive to those who don't want to pay year round dues for a 6 month club and equates to a lot of extra food and beer sales in the "dead" winter months....

When it's winter... Paddle tennis and curling are JUST LIKE GOLF.  I also imagine it's tough to play either activity at a public venue.  Provide the activities your members CANNOT get somewhere else... And you follow Mr. Mucci's assertions.

[Ken Moum]

As it stands today, my club has not actually survived.  Thanks mostly to a succession of boards that thought the clubhouse was subsidizing the golf course.

The bank that owns the place isn't spending much on the course, but it's actually spending more than the members and our board gave the superintendent last year.  Sadly, the wicked summer took its toll, and we are only now getting back to a condition that most would call playable.

For my part, I now wish we'd given up five or ten years ago, as we cut the budget so much that all kinds of regular maintenance was left undone. 

Now we are left to hope that the bank can find a buyer in a relatively short time--hopefully the new buyer will be able to fund some of the work that needs to be done.

If there's any good news, it's that our current manager has said there are potential buyers, and some of them are committed to injecting a bit of cash in at the beginning. Now the bank needs to figure out how low it's willing to go.

For my part, playing a course in the condition ours have been since mid-July has been attitude-altering.  I already leaned toward what some call a "purist" approach to the game--playing it down even in bad conditions--and seeing everyone insist that it wasn't possible to play golf where there's no grass pushed me even farther in that direction. I find playing it down, even in the bare spots to be VERY enjoyable. (FWIW, I really enjoyed John Vanderbroght's story about Watson and Norman here: http://freedrop.wordpress.com/2010/08/21/divots-in-the-fairway/)

That and I have become really adept at picking goose grass out of a bentgrass putting surface.   

K

[Dave Givnish]

This may be a bit off this topic, but I wonder how much the financial challenges to private club golf will impact the maintenance model?  Will clubs eventually be better off out-sourcing maintenance to a company instead of doing it with their own employees?  Are there cost savings available from this in terms of supply costs and human resource management and benefits?

[Jerry Kluger]

Carl: Woodmont is far from being in trouble.  The fact is that membership is down and so they dropped the initiation from $105K to $65K and wound up with a large number of new members.

Pat: I agree that most clubs did not consider an economic downturn as a possibility when doing their financial planning.  But I really believe that it is not the economic situation which is creating the problem: it is a lack of interest in golf.  There are plenty of babyboomers playing golf and belonging to clubs and of course their will be an attrition in their ranks as they retire and move to other locations, etc. but it is the next generation which is simply not interested in playing golf. I know that in the DC area the clubs are picking up babyboomer members but they are having trouble attracting the golfers in their 30s and 40s.  Some clubs have a strong legacy membership but that is also decreasing rapidly so there are plenty of clubs that no longer have waiting lists.

[Carl Nichols]

Carl: Woodmont is far from being in trouble.  The fact is that membership is down and so they dropped the initiation from $105K to $65K and wound up with a large number of new members.

Pat: I agree that most clubs did not consider an economic downturn as a possibility when doing their financial planning.  But I really believe that it is not the economic situation which is creating the problem: it is a lack of interest in golf.  There are plenty of babyboomers playing golf and belonging to clubs and of course their will be an attrition in their ranks as they retire and move to other locations, etc. but it is the next generation which is simply not interested in playing golf. I know that in the DC area the clubs are picking up babyboomer members but they are having trouble attracting the golfers in their 30s and 40s.  Some clubs have a strong legacy membership but that is also decreasing rapidly so there are plenty of clubs that no longer have waiting lists.

Jerry:
I didn't say that Woodmont is in trouble.  But it did have to cut the membership fee to attract new members -- though I thought it was from $100K to $50K, not $105K to $65 -- which presumably means they weren't attracting enough members at the higher fee.

[Bill Brightly]

Pat,

As always, you make a lot of sense. What I feel is going on, and will continue to occur in the US metro areas, is that the top clubs will slowly but surley force the lesser clubs to fold, be merged, or operate on a level that is not equivilant to the current private club model.

Assuming that the clubhouse is already built and paid for and the club is not mired in debt, I do not think the "restaurant loss" is a big issue. So much of that loss is depreciation, and having access to decent food and friendly faces is a cost that I am willing to pay for in my dues.

What I really see going on is that the pool of potential new clubs members will continue to shrink for the next ten years and not increase until current 15-35 year olds (baby-boomers kids) reach their 40's, and only IF they have the financial means to pay a big initiation fee. I can't forecast the collective wealth of these kids, but it is likely that FAR fewer will have the cash to join a country club.

For the next ten years, the relatively few new club joiners are going to make choices based upon quality of the golf course (assuming adequate food an decent amenities.) So I see a club like MR always being able to maintain a full membership, but can see no way your neighbors can.  In my area, I know that Hackensack, Ridgewood and others will remain solid, but I just don't see how certain courses will come close to maintaining full memberships AND have top notch golf course conditions. Potential new members will make silent choices and opt for the top clubs. Second tier clubs will make due, but the gap will widen. Make no doubt that ALL top clubs benifit greatly by the influx of new initiation fees. A top club probably takes in $250,000 to $750,000 in new fees each year, re-invests that in the golf course and equipment, widening the gap in the golfing experience.

What I think makes sense but will likely NEVER happen, is mergers between clubs. Members would have access to two courses, eliminate fine dining at one of the restaurants (but keep it available for profitable private functions) and rely upon one set of managers to run two courses. There are many potential efficiencies if you play that out: one superintendent, one GM, etc. But I see no way that membership of Top Club A will accept the idea of members from Lesser Club B "cluttering up" course A... In your case, I think you could take course B and make a GREAT 27 hole par 3 course...

[Steve Strasheim]

Very interesting comments/ideas.

Would love to see private clubs develop new profit centers instead of relying on more and more outside events.

ps. My first post for awhile, is there a way to make the "preview" work?

[Roger Wolfe]

Also, given the longer winter season, it fits very well with clubs that want to offer their members recreational opportunities. For many clubs in Canada, it's a necessity to maintain interest and revenue. (I attended a bonspiel or tournament at a very well known club in those that don't play a lot of golf) use in the winter.   This, combined with  paddle tennis, makes the club attractive to those who don't want to pay year round dues for a 6 month club and equates to a lot of extra food and beer sales in the "dead" winter months....

When it's winter... Paddle tennis and curling are JUST LIKE GOLF.  I also imagine it's tough to play either activity at a public venue.  Provide the activities your members CANNOT get somewhere else... And you follow Mr. Mucci's assertions.

Uhh, Roger, that's not my quote.  That's half a quote from somebody else that I was responding to, and half mine.  The half that's mine is:

"This, combined with  paddle tennis, makes the club attractive to those who don't want to pay year round dues for a 6 month club and equates to a lot of extra food and beer sales in the "dead" winter months...."

The first half came from Dan Boerger...

My apologies... working with Golf Club Atlas on an Ipad is very, very challenging!