How will your club survive in 2010?

[Mark Woodger]

Many thanks for the information Steve.

[Adrian_Stiff]

Adrian,

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

Very true! Every cloud hey..

[Morgan Clawson]

Great thread!

Lots of good ideas.

I live in Minneapolis and I'm not a member of a club. The rub for me is that the monthly fee for most clubs here is about $500, plus the food minimum. And unfortunately we can really only play for 6-7 months of the year.

The big, fancy, traditional club house is the standard here.  There are so many great restaurants here that eating the same food in the same boring dining room is not that appealing.

Love the minimalist club house, menu and personnel ideas discussed here...

[Mickey Boland]

I don't know where to start with my story.  

My club is the only private club in my town.  Metro area of about 90,000.  There are two private clubs in adjacent towns, both about 30 miles away.  Never really a history of people from one town belonging to a club in the other town.   On July 21, 2008, our club membership voted (by a margin of 2 votes of the 2/3 majority required) to authorize the club to borrow up to $6 million to construct a new clubhouse.  On July 23, 2008, Hurricane Dolly struck our area.  Did some damage to the clubhouse, but nothing of any major significance.  No walls down, no roof blown off, but some water damage and minor structural damage.  Our club president, who had pushed for the new clubhouse, saw this as a blessing in disguise and the board entered into negotiations with the insurance company to declare the clubhouse a total loss.  Based on what he and others thought would be a substantial settlement, plans were made to tear down the existing clubhouse and construct a new 33,000 sq. ft. clubhouse at a cost in the neighborhood of $7 - 7.5 million.  In addition to the anticipated insurance settlement of $2 - 2.5 million, additional money was raised through the offering of a special type of membership to existing members.  Basically, pony up $25,000 and get some return in the form of a cut of new initiation fees, F&B rebates, some free guest rounds, etc.

I'm a banker, and was dubious all along about 1) the club's ability to even get a loan of the amount and 2) the club's ability to service any debt even close to that amount.  My feelings were known by pretty much everybody.  The clubhouse was torn down in November and December 2008, prior to final insurance settlement and prior to securing a loan.  Membership at the time of the hurricane was approx. 520.  Throughout 2009, membership began to dwindle as nothing was happening towards the new clubhouse and due to lack of a swimming pool, which was torn up along with the clubhouse.  We're now down to about 415 members, and have secured a loan to construct a 10,000 sq. ft. clubhouse.  

We still do not, in my opinion, have the ability to service the debt we have obtained.  Our survival is predicated on growing back to the previous membership level, and probably increasing dues to go with some type of assessment.  My club will survive 2010 only because we will have the construction loan going and will  be able to cover interest expense with remaining insurance funds and funds from the special membership.  I think we will also be OK for the first part of 2011.  Ask me the same question this time in 2012, though, and I hate to think about what the answer is.  

I've always felt that, in an area like ours, initiation fees are over-rated, and we should be more concerned with growing the membership and getting the monthly dues income, F&B, etc.  While this feeling is shared by a lot of our board members and management, we have unfortunately gotten ourselves into a dilemma since a cut of new initiation fees was one of the selling points of the special membership.  

Sorry for the length of the post, but I have been very interested in the threads that have touched on this subject throughout 2009, and finally had to share my story.

[Josh Stevens]

How did it ever get that way??

In Oz, I am guessing the most expensive private club in the country would probably be the Australian, possibly around the A$4000-4200 per year mark (A$350 per month) and that would be the most expensive by quite some distance.  In general for the very top end, say the top 12 magic circle clubs around australia, you would be looking at nearer to $3500 (say A$300/month).  Iniitation fees top out at about $40k (again for the Aust) but would normally be well less than $15000 at the top end, and that would be for club with a World top 100 course, with the vast marjority less than $5000

In the UK, even membership at Sunningdale or Walton Heath is little more than US$400 per month - it really has got a bit out of control over there

[Sean_A]

It is astonishing what folks will pay for memberships, but that is the way it is with anything.  There is high end and low end in all consumer products and the proponents of each often can't see the sense of the "other" model(s).  I recently quit a membership because it was closing down on $120 a month (in US terms).  It was too much to pay imo - especially as I like to get around and see other courses.  Even now with two memberships totaling $80 a month I am thinking of dropping one.  To each is own though.  I can certainly see the appeal of being a member of a fine club, but even though I can afford it - I would never consider joining one.  Though as a good friend of mine once said about these matters - you are only spoiling yourself.

Ciao

[Adrian_Stiff]

In the UK you get good value for membership. We do one at £100 per year then £20 per round. Means people can belong, keep a handicap play in competitions but still be nomadic to go and pay other courses without feeling they are wasting big bucks by not playing their home course.

[Sean_A]

In the UK you get good value for membership. We do one at £100 per year then £20 per round. Means people can belong, keep a handicap play in competitions but still be nomadic to go and pay other courses without feeling they are wasting big bucks by not playing their home course.

Adrian

Is this model of minimal dues combined with a minimal green fee per play getting any traction here?  I know of a few examples, but not for courses I really would want to play.  Because of formed relationships, I would consider going back to my old club on a model like this.

Ciao

[Mark Chaplin]

Josh - you are certainly high with your Walton Heath fees and I believe SGS is no more than £2000pa.

Mickey - I feel sorry listening to this, I've never heard of anyone join a GOLF club due to the showers, comfortable toilets, fluffy towels or leather arm chairs. Likewise no one has ever left Deal from my understanding due to poor loo roll, the quality of the car park, etc, etc. People join golf clubs for the golf and committees the world over should remember this all the time.

FYI the average UK club will have 6 green staff, a secretary and assistant, bar manager and full time assistant, chef and full time server and a professional paid a "retainer". Obviously there will be part time cleaners, bar staff and kitchen/serving staff but I'd guess around 16 full time equivalents servicing 500-600 members and guests/visitors. In Chicago I guess double the staff service 250-300 members and no visitors at the average CC. Now it's easy to see why we average $1200-$1600pa in fees compared to $10000 or more.

Also visitor green fees at the average club will be between 10-25% of income not a massive amount

[Jud_T]

Mickey,

Sorry for your situation.  I guess the one silver lining is that it's the only private club in the immediate area.

[Adrian_Stiff]

In the UK you get good value for membership. We do one at £100 per year then £20 per round. Means people can belong, keep a handicap play in competitions but still be nomadic to go and pay other courses without feeling they are wasting big bucks by not playing their home course.

Adrian

Is this model of minimal dues combined with a minimal green fee per play getting any traction here?  I know of a few examples, but not for courses I really would want to play.  Because of formed relationships, I would consider going back to my old club on a model like this.

Ciao

Sean - Yes I think more and more clubs, even the older ones are moving toward this type of membership, perhaps more a £400 per year then a tenner. The world has changed and probaby 30 years ago a typical UK member played 40 rounds per year, maybe 38 times on his home pitch and two rounds when he holidayed in Cornwall. 30 years on the typical UK member still plays 40 rounds but he plays 3 of them on a weekend break with his mates on the Algarve, he is member of two society groups that have 4 meetings per year and he gets invited to a corporate day and an invatation (member & guest day) from a neighbouring club... so he pays 27 rounds on his home club. The older brigade (the +55 group) still behave like the old typical members, but they are dying off and the newer golfers have different wants and many want to experience other golf courses, there is a nomadic flavour about the modern golfer. Many might only play 20 rounds and to them their home membership might only be worth £500 per year not £800-£1000. Without this interim membership package there will be more losses.
There are negatives though, certainly with the £100 and £20 per round situ, these members dont play in bad weather, they also tend to form their own groups of 4 and there is less integration between members. The golf club can lose its soul.
Like all things in life there is a market for everything but the biggest markets are where the customer gets value and in the UK value is a good course for £800 per year and you play 40 times. Things have to be exceptional to demand much more, the US model gets nowhere near this which seems rather strange because there are pay as go courses which are pretty good for $35. The US membership clubs do seem to be paying an awfull ot of excess money for the unwanted/ wanted froth.

[Adam Lawrence]

The points memberships are a really good idea, but, as yet, they are basically a creature of the proprietary club market. For obvious reasons, the older, member-owned clubs haven't really gone beyond cutting out joining fees and making a few alluring offers - buy now pay in three months, that kind of thing.

I live just outside Oxford, which isn't really a great golfing area. Frilford Heath is a good club, but it's too rich for my blood at about £1500 a year and £2500 joining fee (although I am pretty sure that's a reduction from last year, I have £1700 and £3500 in my memory). Southfield is the other decent club, and from their offers, it's clear they're hurting - no joining fee, £1100 a year sub and various easy payment deals. There are lots of newer courses, privately owned, and they are the ones with the low basic points memberships - typically you pay £150 or so, and that gets you enough points for about six or seven weekend rounds, or correspondingly more nine hole or weekday rounds.

The problem with these offers is that most of the courses, even if the golf is OK, aren't necessarily the sort of golf club we all imagine. I long for the kind of setup my Dad has at his club in the north of England, a perfectly ordinary, nothing-special club, but he has a group of fifteen or twenty buddies, most of whom he used to play squash with when he was younger, and so there is always a game at 0830 on a Saturday morning. No need to ring round, no need to book the tee, just rock up to the club, see who's there, throw the balls on the ground for partners and off you go. Done by 1230, a quick pint and a sandwich in the clubhouse, home by 1330 - crucially, golf in a half a day, not a whole day.

The challenge for every club that's struggling is how to create this kind of environment, where the members are happy, they can get plenty of golf in so they feel they are getting value for money, without having to spend every spare moment at the golf club. All the research says the two obstacles to people playing more golf are cost and time, but I think time is the most important. If you can get your golf in without it taking forever, you play more and your perceived value is better, QED.

On top of that, clubs have to deal with the greater mobility of today's adults. My Dad has lived in the same town all his life, and thus he has a circle of golfing buddies he's known thirty years or more. I've moved around quite a lot, and, although we've been in this house now ten years, and we have a great circle of friends, none of them are golfers. Thus I don't have the social network that gets you to the club regularly. I think the solutions here are at two levels - old and new. Clubs need great secretaries and other staff who introduce new members to the rest, help them get games and embed them in the club culture. But they - and the game generally - need to figure out how to use technology to bring golfers together. There are tons of Facebook style golf social networking sites, but none seem to have taken off - I joined a couple out of interest, and I get very little from them.

Oh - and like the rest of the UK contingent - I just can't get my head around what the US pays for golf!

Adam

[Sean_A]

Adrian

I think you are right about the public options in the States.  At least this was my experience in Michigan.  I played a lot of public golf on what I still think are good courses for little money.  Indeed, since I left Michigan, I don't think green fees have really gone up.  I have no idea how these guys make money in the economic climate Michigan has.  As I see it, and it is a point Adam raises, the problem with vagabond public golf is one needs a circle of like-minded mates to get a game and the golf can be excruciatingly slow - especially one gets used to 3.5 hour golf.  There is also the problem, from my PoV, of walking restrictions (or the course not being properly designed for walkers) at many publics, but hopefully this is a reducing trend these days. 

In the UK, we have golf societies which can fill the role of a group of mates for the vagabonds.  I belong to several, but rarely play because I usually don't care about the venues enough to invest my time and money. Plus, it seems whenever there is a large group together, the game gets slower - an interesting phenomenon.  To note, I am very surprised the idea of societies haven't taken off in the States.  They would seem to fit the bill perfectly for those  golfers who want a fairly steady game in season without being overly committed.  I know M Whitaker is part of a society and I think it is a grand idea.  Mind you, it takes one or two fellas who are willing to put in the effort to keep these things running smoothly. 

http://greenvillegolfingsociety.com/Articles/GGS_Overview.htm

Adam

Most UK clubs have throw-ups throughout the week.  Perhaps you need to find a club that has at least one weekend throw-up.

Ciao 

[Patrick_Mucci]

Eric,

I haven't read any of the replies, but, here's my take.

Over the last few decades, clubs expanded services which they were able to fund through dues and initation fees.

Utilization for those services are down, considerably, so are the dedicated revenues from those sources.

Turnover/membership losses are up and new member additions are down.

Clubs are going to have to return to a "golf" oriented business model, at the expense of collateral services, if they intend to survive.

Now, more than ever before, belonging to a club is a luxury.

In addition, the emerging utilization patterns with younger members is at odds with the expansion of services that occured over the last few decades.  Younger members, with shared household responsibilities, come early, play their golf and leave.  Older members, especially in states like NJ and NY, with high tax burdens, are altering their membership to non-resident (lower dues and minimums) or resigning, in favor of warmer climates and more favorable tax treatment.

I don't see anything on the horizon that will favorably impact a club's ability to attract and retain members at a reasonable price
I don't see the economy improving this year or next year to the degree that there's a return to a pre 2007 environment.

Clubs that don't streamline and return to a "golf" club like model, will suffer the most and run the risk of going under.

The insidious element in club finances is "the minimum", a forced tax mandating usage.
As clubs became less and less of the focal poiint of the community, with alternative dining facilities available, "the minimum" was created in order to force utilization.
What I've learned about most clubs, which seems counter intuitive, is, that the more meals they serve, the more money they lose.
Those clubs in the most trouble, or risk of getting into trouble, should eliminate the minimum and reduce the dining element, namely dinners and breakfasts, especially during the week.

Now this is contrary to the trend that's emerged over the last few decades, it goes against the current culture of the club.
But, if the club wants to survive, they can't continue to do the things they've done for the last few decades, they have to adapt or perish.

As painful as it may be, the first thing I would do would be to drastically reduce dining.

The second thing I woud do is to rake bunkers on a needs basis, which I've always advocated, as well groomed bunkers have become far less of the hazards they were intended to be.  I always liked the Pine Valley schedule which seemed to be once a month.

I'd also alter/reduce my mowing schedule for fairways and especially roughs.

I'd make the other memberships, pool and tennis, self sustaining, or eliminate them.

I think you have to approach how you run the club, in an entirely different light.
You have to detach yourself from the historical or traditional methodology/services and operation, and pretend that you just bought the club last week, keeping an eye on protecting and preserving your investment, and not allowing it to wither away on sentimentality.

End of rant

[Adrian_Stiff]

Adam - I agree about time being a major factor. We just added a further 18 holes to the Players Club nr Bristol and I purposely looked for something that you could complete 18 holes in 3 hours.... it features half the holes where the green merges into the next tee so no long walks, 7 par 3 holes so you play those holes quick, not too many bunkers and not a lot of rough. Time is our only enemy.

[Mark Chaplin]

Maybe us members of two ball clubs are no longer old fashioned. The last time I spent more than 3.30 on the course on a two ball day we had more than two rounds in the halfway hut!! Will two ball find favour again for pace?

[Adrian_Stiff]

Maybe us members of two ball clubs are no longer old fashioned. The last time I spent more than 3.30 on the course on a two ball day we had more than two rounds in the halfway hut!! Will two ball find favour again for pace?

Mark - I think two ball golf probably wont, though yes it is quick. Modern golfers seem to find a 'four' and matches are more 2 v 2. Maybe 15 years ago the start sheet was 50-50 between 2s and 4s and you could split it with two tees, it might be more 80-20 now. Also in the commercial situation of selling green fees you want to sale the time for 4x a fee rather than just 2x. On a weekend we try and let the first half a dozen groups play as two's. Two balls in the middle of the day are just as slow as the 4s have dictated the speed. There is no nice solution if your a busy and busy is the nice solution to be in.

[Brent Hutto]

American golfers want to play their own ball, they want to play slow and they want to keep a scorecard. None of which is compatible with what we would call Alternate Shot play. So we're left with sending out twosomes which only works if you have an entire tee sheet filled with groups of two who want to play much faster than groups of four would. And that never happens at any club or course I've played at here in USA.

Nice idea, though.

P.S. And keep in mind that even if my three "wants" apply to a minority of golfers (in actuality it's more like 80-90% in my experience) the result is the same. If one group in ten playing that way will guarantee the entire course plays at a 4-1/2 pace no matter how many fast-play-desiring golfers are stacked up behind them.

[Jud_T]

Patrick,

Pretty much spot on... Even many golf only clubs got totally out of hand with locker rooms and dining, not to mention unnecessary maintenance...

[Patrick_Mucci]

Jud,

I think a lot of clubs forgot about, or ignored their core value, the golf course.

Unfortunately, some members felt that the tuna fish salad and new wallpaper brought in new members, it's those members who are scrambling back to the drawing boards.

[Adrian_Stiff]

American golfers want to play their own ball, they want to play slow and they want to keep a scorecard. None of which is compatible with what we would call Alternate Shot play. So we're left with sending out twosomes which only works if you have an entire tee sheet filled with groups of two who want to play much faster than groups of four would. And that never happens at any club or course I've played at here in USA.

Nice idea, though.

P.S. And keep in mind that even if my three "wants" apply to a minority of golfers (in actuality it's more like 80-90% in my experience) the result is the same. If one group in ten playing that way will guarantee the entire course plays at a 4-1/2 pace no matter how many fast-play-desiring golfers are stacked up behind them.

Brett- UK golfers are the same they want to play their own ball. Foursome golf outside of a competition is almost extinct here in the UK. I can't remember anyone playing alternate shots at our club unless it was a team match or a once a year event and even then we pay greensomes which is where all four players hit a tee shot then you pick your best and play real foursomes from there.

[Chip Gaskins]

PS. I am 47 years old, and I would be interested to hear the perspective of the younger guys here. It is my perspective that in the Facebook era, privacy and intimacy is not really valued by their generation. See below:

Mike-

I am 38 and like you, my wife works 60 hours a week we have two small children and a DC mortgage.  That equation leaves no time and certainly no money to join a private club.  I would really love to join the club 2 miles from house, Kenwood Club.  The course is short but decent and the facilities are really top notch (clubhouse, tennis, indoor tennis, pools, etc etc).  But even in the new world we are living in it is still (I looked yesterday) $64,000 initiation fee and $500 a month.  I suppose I could in a bizarre math way figure out how to justify the $500 a month, but where do people get $64,000 liquid laying around to join a club???  I obviously took the wrong turn at Albuquerque!

And that whole discussion was about a FAMILY club where I can justify and absorb the cost over 4 family members.  Joining a private golf only club is a laughable proposition until my kids are in/out of college.  I do have my eye on one particular place for that though 

Chip

[Jud_T]

Chip,

get the kids into golf, then you can justify having your cake and eating it regularly!!

[hick]

 Money is not the issue at Newport cc, but maybe some clubs would be better to follow them and only have a light lunch and no dinner. I believe the food is still brought in from a local caterer, so you eliminate the food waste and paying a chef and cooks.

[Josh Stevens]

And then of course you add the reciprocals - this system does not seem to exist in the US.

In Australia, because it is a big place and we are fairly mobile population - we have the reciprocal system.  I am a member of a club in one part of the country that allows me access to (as a defacto member) clubs of similar standard in other states, in this case including Royal Melbourne, Kingston Heath, Royal Sydney, Australian, NSW, Royal Adelaide  etc etc.

I dont actually ever use the priviledges as I live in London these days, but it is a very strong system and clubs go to great lengths to establish and maintain these sister clubs links - why does the US not do this?