How will your club survive in 2010?

[Jud_T]

bump

[Sean_A]

Wow, Mike, 47?  I would have never guessed anything other than 57

As a member of the younger generation, it isn't a lack of desire for the private club, it is the inability to join from a financial standpoint.  One of the by products of the last two bubbles is not only ridiculously high housing prices but also a ridiculously high number of people with money.  Therefore there is increased demand for the private club and private clubs set prices that aren't accessible for us in the younger generation.  Either that or clubs that were once private but didn't have full memberships, now have waiting lists.

You're right, however, that those times are changing.  I have recently heard of two golf clubs I'd like to join who have, relatively speaking, inexpensive initiations and dues.  So while that is starting to happen, many "equity" members of clubs aren't willing to have their club devalued with a bunch of non-equity junior members.

That being said, there is a great club here in Naples that is trying to lure junior members in.  They have an under 35 rate, its $40k to join.  That is their understanding of a discount.  I'm 30, I've got 3 kids, $40k is not a possibility nor is it a possibility for most in my age and circumstances (even the ones who were smart enough to not leave big firms to teach  )

Another issue, which is related, is not a lack of desire to join a private club so much as a desire to not be tied to one golf course.  Now, I think that is ridiculous because young professionals could have their professional life served by getting to know members of a club and spending a lot of time with them but there are several in my generation who want to play many golf courses, not just one and with the cost of the membership, there isn't much money left over to play any other course but the one you are a member of.

JCJ

You have to be patient.  A great many golfers don't get the proper opportunity to join a club until their 40s or 50s.  I would still be one of them if I didn't live in the UK and even here I don't have a local membership.  Its not just opportunity either. A lot of keen golfers won't pay what it costs to join a club. 

Ciao

[Roger Wolfe]

We focused on the amenities that we know our members want and that we can do the best job providing:  1) a wonderful practice facility 2) a wonderfully designed golf course 3) excellent playing conditions... focusing on areas "in play" 4) an uncrowded, fun swimming pool close to downtown 5) a golfer oriented, casual F&B service with friendly waitstaff, great comfort food and cold drinks 5) informal, family oriented events like picnics, holiday brunches, an oyster roast, etc....

Items 1-5 are thoroughly enjoyed and used by 93% of our members (to be exact).  We had to eliminate a lot of the other 7%.  With 10% fewer full members, this enabled us to significantly reduce the expected dues increase AND cut the dreaded F&B minimum in half.  Tough decisions, but these are tough times!

[Matt Bosela]

It's been an interesting two years at my home club.

At the end of 2008, we lost about 45 full golf members.  Our marketing committee was very aggressive in February of '09 with their plans to fill the membership, offering spousal deals (second spouse pays half the initiation fee and golfs for free in '09) and also changing the rules regarding 'Intermediate' members, moving the intermediate age from under 30 to under 35.  Intermediates don't pay an initiation so changing that to people 35 and over brought some much needed youth into our club.

We'd end up filling those 45 spots within two weeks and had a wait list for the first time in well over a decade.

Fast forward to this year...

The club tried to increase dues by 4% and also raise F&B minimums to $100/member/month from $80.00 and it was met with intense disapproval from the membership.  We again lost about 40 members and the club has since reconsidered, lowering the increase to 2% and keeping the F&B minimums at the same level.

However, after a year where we ran barely break even, the club insisted that a number of things would have to be instituted in order to ensure the chance of turning a profit:

- Allow an additional two outside shotgun tournaments, moving the number from six to eight
- Host a major professional tournament for a second consecutive year, this time getting much more money from the Tour for the use of our club for a full week
- No more reductions in Initiation fees and no more group deals
- continue to look into ways to increase F&B sales, either through higher minimums or other means

The membership certainly isn't happy about losing their golf course for another nine days this year but the sentiment overall is that we needed to do something to increase revenue while not raising dues to a level where we would lose more members.  

It's quite the balancing act and as always, a work in progress.  

[jeffwarne]

Wow, Mike, 47?  I would have never guessed anything other than 57

As a member of the younger generation, it isn't a lack of desire for the private club, it is the inability to join from a financial standpoint.  One of the by products of the last two bubbles is not only ridiculously high housing prices but also a ridiculously high number of people with money.  Therefore there is increased demand for the private club and private clubs set prices that aren't accessible for us in the younger generation.  Either that or clubs that were once private but didn't have full memberships, now have waiting lists.

You're right, however, that those times are changing.  I have recently heard of two golf clubs I'd like to join who have, relatively speaking, inexpensive initiations and dues.  So while that is starting to happen, many "equity" members of clubs aren't willing to have their club devalued with a bunch of non-equity junior members.

That being said, there is a great club here in Naples that is trying to lure junior members in.  They have an under 35 rate, its $40k to join.  That is their understanding of a discount.  I'm 30, I've got 3 kids, $40k is not a possibility nor is it a possibility for most in my age and circumstances (even the ones who were smart enough to not leave big firms to teach  )

Another issue, which is related, is not a lack of desire to join a private club so much as a desire to not be tied to one golf course.  Now, I think that is ridiculous because young professionals could have their professional life served by getting to know members of a club and spending a lot of time with them but there are several in my generation who want to play many golf courses, not just one and with the cost of the membership, there isn't much money left over to play any other course but the one you are a member of.

surely there are some Doak "0"s there in/around Naples that are running deals better than 40k

[jeffwarne]

It's been an interesting two years at my home club.

At the end of 2008, we lost about 45 full golf members.  Our marketing committee was very aggressive in February of '09 with their plans to fill the membership, offering spousal deals (second spouse pays half the initiation fee and golfs for free in '09) and also changing the rules regarding 'Intermediate' members, moving the intermediate age from under 30 to under 35.  Intermediates don't pay an initiation so changing that to people 35 and over brought some much needed youth into our club.

We'd end up filling those 45 spots within two weeks and had a wait list for the first time in well over a decade.

Fast forward to this year...

The club tried to increase dues by 4% and also raise F&B minimums to $100/member/month from $80.00 and it was met with intense disapproval from the membership.  We again lost about 40 members and the club has since reconsidered, lowering the increase to 2% and keeping the F&B minimums at the same level.

However, after a year where we ran barely break even, the club insisted that a number of things would have to be instituted in order to ensure the chance of turning a profit:

- Allow an additional two outside shotgun tournaments, moving the number from six to eight
- Host a major professional tournament for a second consecutive year, this time getting much more money from the Tour for the use of our club for a full week
- No more reductions in Initiation fees and no more group deals
- continue to look into ways to increase F&B sales, either through higher minimums or other means

The membership certainly isn't happy about losing their golf course for another nine days this year but the sentiment overall is that we needed to do something to increase revenue while not raising dues to a level where we would lose more members.  

It's quite the balancing act and as always, a work in progress.  

Matt,
If the members resist moving the minimum to $100 monthly(demonstrating their priorities are not in Food), why not simply shut down the Food operation and go to a Beverage and simple bar/halfway house food menu only?

[corey miller]

Mike Sweeney

Many of the golf clubs in the Metropolitan area are located in small jurisdictions, in Westchester County, villages.  These villages derive very little income from "employment".  They operate on Property tax revenue so I strongly disagree that they give a hoot about maintaining employment within not-for profit entities.  

[Kevin Cahoon]

 Kevin

2.5% of total revenue is potentially quite a large amount of money not generated by the club.  This is exactly the sort of thing I would be looking for my club to exploit for the right green fee and likely akin to the Muirfield model (a model I have always admired). 

My main club doesn't seem o think there is a problem with the economy.  We have broken ground fora huge new reservoir and a new irrigation system - there goes our reserves! 

I suspect my other club will do what it always does - be frugal.  I trust and have always trusted that they will run things well.  To date, I believe this has been the case except for the stupid debacle with the 2nd green.  That was a major bonehead move.

Ciao

Sean,

I am trying to influence our board and show them that the 2.5% would be a boon to our operations bottom line, if we were to allow limited outside play. Since we already allow charitable groups to rent our course on 8 to 10 Mondays, it would appear to be a simple step to let others see the quality of the course and facilities. It is a slow, uphill battle.

My club has aggressively priced our initiation for new members under 40 with a reduction in monthly dues. This led to our largest growth in members in 2009. We were able to add 12 new members with this program. We will continue the program in 2010.

[Jerry Kluger]

My club keeps lowering its initiation fee and we had a special of no initiation fee during the month of December.  Here in DC many of the clubs are hurting and dropping their initiation fees to the point that survival is questionable for many clubs.  I do feel that many of these measures are avoiding the central issue which is how do the clubs get those in generation X to join.  I see most of the new members to be in the 50 and up age group which really just postpones the inevitable.  I really think that if the real estate market was better we would be seeing more clubs closing.  

I also think that we might be seeing some private clubs advertising for members.  My understanding is that most member owned clubs didn't advertise for fear of losing their tax status however, the issue concerned whether initiation fees are taxable and with reduced initiation fees that may no longer be an issue.

[Scott Szabo]

Unfortunately, mine didn't.  We had been experiencing financial difficulties for a few years and just couldn't make a go of it any longer with declinining membership and usage.

[Jud_T]

My former club has probably lost 10-15% of their membership.   Their was a partial bond component.  I bailed at the end of '08 and got my money back.  Now there's a waitlist to get out!  One of the main problems as I see it was too much money spent on clubhouse and dining facilities as well as unnecessary maintenance and mandatory caddies...

[Matt Bosela]

It's been an interesting two years at my home club.

At the end of 2008, we lost about 45 full golf members.  Our marketing committee was very aggressive in February of '09 with their plans to fill the membership, offering spousal deals (second spouse pays half the initiation fee and golfs for free in '09) and also changing the rules regarding 'Intermediate' members, moving the intermediate age from under 30 to under 35.  Intermediates don't pay an initiation so changing that to people 35 and over brought some much needed youth into our club.

We'd end up filling those 45 spots within two weeks and had a wait list for the first time in well over a decade.

Fast forward to this year...

The club tried to increase dues by 4% and also raise F&B minimums to $100/member/month from $80.00 and it was met with intense disapproval from the membership.  We again lost about 40 members and the club has since reconsidered, lowering the increase to 2% and keeping the F&B minimums at the same level.

However, after a year where we ran barely break even, the club insisted that a number of things would have to be instituted in order to ensure the chance of turning a profit:

- Allow an additional two outside shotgun tournaments, moving the number from six to eight
- Host a major professional tournament for a second consecutive year, this time getting much more money from the Tour for the use of our club for a full week
- No more reductions in Initiation fees and no more group deals
- continue to look into ways to increase F&B sales, either through higher minimums or other means

The membership certainly isn't happy about losing their golf course for another nine days this year but the sentiment overall is that we needed to do something to increase revenue while not raising dues to a level where we would lose more members.  

It's quite the balancing act and as always, a work in progress.  

Matt,
If the members resist moving the minimum to $100 monthly(demonstrating their priorities are not in Food), why not simply shut down the Food operation and go to a Beverage and simple bar/halfway house food menu only?

Hi Jeff,

Simply put, the board and a few senior members of the club with clout want to maintain the full 'country club' atmosphere, with catering, weddings, business functions, etc.  We also continue to operate a curling facility that loses money almost every year but the club insists on keeping that as well for historic reasons.

The golf course and golf operations are very profitable and essentially make up for all the losses in the other departments.  I would assume many other clubs are in the same boat...

[Dan Boerger]

Matt - As a life long curler, I have a very soft spot for clubs that do what you do. But, I'm curious, why don't you charge the curling members  the necessary fees to cover their expenses?

[JC Jones]

Wow, Mike, 47?  I would have never guessed anything other than 57

As a member of the younger generation, it isn't a lack of desire for the private club, it is the inability to join from a financial standpoint.  One of the by products of the last two bubbles is not only ridiculously high housing prices but also a ridiculously high number of people with money.  Therefore there is increased demand for the private club and private clubs set prices that aren't accessible for us in the younger generation.  Either that or clubs that were once private but didn't have full memberships, now have waiting lists.

You're right, however, that those times are changing.  I have recently heard of two golf clubs I'd like to join who have, relatively speaking, inexpensive initiations and dues.  So while that is starting to happen, many "equity" members of clubs aren't willing to have their club devalued with a bunch of non-equity junior members.

That being said, there is a great club here in Naples that is trying to lure junior members in.  They have an under 35 rate, its $40k to join.  That is their understanding of a discount.  I'm 30, I've got 3 kids, $40k is not a possibility nor is it a possibility for most in my age and circumstances (even the ones who were smart enough to not leave big firms to teach  )

Another issue, which is related, is not a lack of desire to join a private club so much as a desire to not be tied to one golf course.  Now, I think that is ridiculous because young professionals could have their professional life served by getting to know members of a club and spending a lot of time with them but there are several in my generation who want to play many golf courses, not just one and with the cost of the membership, there isn't much money left over to play any other course but the one you are a member of.

JCJ

You have to be patient.  A great many golfers don't get the proper opportunity to join a club until their 40s or 50s.  I would still be one of them if I didn't live in the UK and even here I don't have a local membership.  Its not just opportunity either. A lot of keen golfers won't pay what it costs to join a club. 

Ciao

Sean,

Trust me, I wasn't complaining and I'm not in the market to join a club.  I was just trying to answer Mike's question of why my generation isn't interested in private.  It isnt that we arent interested, its that we can't afford it.

[JC Jones]

My former club has probably lost 10-15% of their membership.   Their was a partial bond component.  I bailed at the end of '08 and got my money back.  Now there's a waitlist to get out!  One of the main problems as I see it was too much money spent on clubhouse and dining facilities as well as unnecessary maintenance and mandatory caddies...

I think this might be an issue for a lot of places.  The golf course isn't the problem, it's the facilities. 

[jeffwarne]

Matt - As a life long curler, I have a very soft spot for clubs that do what you do. But, I'm curious, why don't you charge the curling members  the necessary fees to cover their expenses?

and the diners/caterers/weddingers to cover the expenses of that

[Tyler Kearns]

We have dropped the initiation fee for the first 30 members joining in both 2009 & 2010. They will never have to pay it. It was a success last year, especially in getting younger members (in their 30's) to join, and the vast majority are sticking around for 2010. Hopefully after a couple more seasons new members will outnumber the natural rate of attrition. Further, we have eliminated any fees for junior members whose parents belong to the club as an added incentive.

TK

[Mark Woodger]

To give a younger persons perspective (i am 30 so i hope that counts)

I would absolutely love to join a golf club in the New York/Westchester/CT area however i live in one of the most expensive areas in the USA and so quite frankly i and i expect most others my age are priced out of it because there are many people who can afford it.

I heard of a club that was changing its rules to get new members. I love the course there and it would be a great place to join. The deal still equated to 7k per year and 35k in intiation due in 5 years time. Plus mandetory caddies, food and bev minimums, and several other charges dues to recent improvements and renovations. So the total cost was about 9k a year plus the 35k in 5 years and when i don't own a house i should not be paying these sums.

Personally i don't care about tennis, squash, a gym, paddle courts. I just want a solid golf course in good condition. But for the most part from what i have seen these institutions are country clubs rather than golf clubs. As a result cost are much higher and so the membership has to pay for these services.

What i think would be a good amount and a real incentive to join would be 4-5k a year and 10k initiation due at age 35. but It appears to me that some clubs are desperate for reveue/membership but they are not that desperate to do whatever it takes and are only willing to go so far.

I guess patience is the key and when i am 40 i hope i will be able to join somewhere.

MW

[Matt Bosela]

Matt - As a life long curler, I have a very soft spot for clubs that do what you do. But, I'm curious, why don't you charge the curling members  the necessary fees to cover their expenses?

Dan,

The club has found that raising curling dues will put us out of line with other curling-only facilities and we'd subsequently lose those members. 

Thankfully, the curling operation brought in a small profit in 2009 but the club had to eliminate a key staff member (our curling co-ordinator) to do it...curling members themselves were asked to step up and organize leagues, games, etc and seemingly, it worked out well.

[Paul Stephenson]

Well I'm not sure if it's all about survival, but my club has adopted a unique approach to the problem.  An increase in dues and assessments of anywhere between 17% or 20% depending on membership category and budget increases of 7% for Operations, 10% for the Pro Shop and almost 20% for the house.

Oh, and our 2010 budget is also predicting a loss of approx. $100k this year.  Our first projected budget deficit in the 52 year history of the club.

You have to admit...it's different  

[Jud_T]

Essentially, I played the same amount of golf on probably better designed (although not conditioned ) courses last year and saved about $10,000 since dropping the club. It's only going to be clubs that have either very highly esteemed courses and/or are in the best suburbs near a few major metropolitan areas that are going to continue to be able to charge full freight...

[Adrian_Stiff]

Josh Stevens summed it up perfectly.... your cost base is too high.

IMO people join a golf course to play golf, I have never heard anyone say you gotta go to Bushwood its got a great car park.

I dont know how the US model has made it for so long, but the hot air days may be over for some. I think the solution may lie somewhere between what you have now and the muni... perhaps have a membership of 200 that gets those prime times and they pay good money, then have a secondary tier that pay less, based more on $50 per month and say a $20 user fee per round, or a math that equates to good value. That gets your 30 year in at an affordabe rate and maybe those second class members eventuay may take up the first class membership as they can afford/ space becomes availabe.

[Roger Wolfe]

Is "Curling" to private clubs in Canada the same as "Tennis" to private clubs in the USA?

I can play tennis down the street for free.  Can you "curl" for free in Canada?

[Jud_T]

Adrian,

The silver lining in the states is that the game may finally become more affordable, out of necessity.  And less overwatered! 

[Steve Lapper]

To give a younger persons perspective (i am 30 so i hope that counts)

I would absolutely love to join a golf club in the New York/Westchester/CT area however i live in one of the most expensive areas in the USA and so quite frankly i and i expect most others my age are priced out of it because there are many people who can afford it.

I heard of a club that was changing its rules to get new members. I love the course there and it would be a great place to join. The deal still equated to 7k per year and 35k in intiation due in 5 years time. Plus mandetory caddies, food and bev minimums, and several other charges dues to recent improvements and renovations. So the total cost was about 9k a year plus the 35k in 5 years and when i don't own a house i should not be paying these sums.

Personally i don't care about tennis, squash, a gym, paddle courts. I just want a solid golf course in good condition. But for the most part from what i have seen these institutions are country clubs rather than golf clubs. As a result cost are much higher and so the membership has to pay for these services.

What i think would be a good amount and a real incentive to join would be 4-5k a year and 10k initiation due at age 35. but It appears to me that some clubs are desperate for reveue/membership but they are not that desperate to do whatever it takes and are only willing to go so far.

I guess patience is the key and when i am 40 i hope i will be able to join somewhere.

MW



Mark,

Take a look at Essex County Country Club. It is in West Orange, NJ (less than 40 min from NYC) and recently renovated by George Bahto and Gil Hanse. Collectively, they've restored a gem (and wildly underrated) to a fantastic golf course. The facilities are better than average and the club experience is improving rapidly. I'm not exactly sure of the initiation fee(s) and dues, but I do know they have been quite liberal with younger members and are very "open" to expanding their membership. Good luck.

Steve