[Dan Herrmann]

There is a club out my way that I pass by frequently.  Today, for the first time, I actually saw more than one group playing.

From what I hear, the course gets very little play, but always looks to be in great shape.  It's actually a "2nd course" for this club, and the first course isn't exactly filling its tee sheet.  (both courses are architecturally excellent).  Granted, it's known as a "second club" in the area, but with so little play, is this a sustainable business model?

In a similar vein, I was talking with a friend who said his old club on the Jersey shore had few rounds.  There's also a very exclusive course in Delaware (I think the VPOTUS is a member) that's similar.

Are clubs like this sustainable?   Are there clubs like this throughout the US and Canada?

[Kyle Harris]

Dan:

In both your examples there are some very rooted members that keep the balance sheet working. Drive by early in the morning and see what sort of activity is running through those places.

I believe the Delaware course to which you are referring is the envy of Gulph Mills!

[Cory Lewis]

There's also a very exclusive course in Delaware (I think the VPOTUS is a member) that's similar.

The way the Delaware club survives is very simple.  Every year they take the operating costs of the club, divide it by the number of members and bingo you have your assesment/dues whatever you want to call it for the year.

[Craig_Rokke]

I was at the first club I think Dan is referencing on a Sat Am, and the GM said "we have 8 out there". I thought 8 foursomes, not too many. But come to find out, he meant 8 golfers total. With a full membership that has paid a very respectable initiation fee, low play doesn't matter.

[Patrick_Mucci]

I was at the first club I think Dan is referencing on a Sat Am, and the GM said "we have 8 out there". I thought 8 foursomes, not too many. But come to find out, he meant 8 golfers total. With a full membership that has paid a very respectable initiation fee, low play doesn't matter.

Craig,

If you're an ardent golfer, it's like having your own golf course

[Dan Byrnes]

Different clubs have different structures.  Even in expensive zip codes, there may be one club that is flush and others failing.  I think of clubs like Ekwanok in Vermont.  Hardly and play at all and while it isn't the swankiest place in the world it's member just pay what is necessary.

One local club in my area just had a two members give 250k each for a bunker renovation project.  The club then kicked in another 500k.  My club got foreclosed on and I arranged for the membership to buy it for 900k and the balked and the bank eventually sold it for 1.65 million and those buyers turned down a 3 million offer?

So if you have the right monied members your can be totally insulated from the economy and economic relality.  However as the generations go buy even some storied places have fallen on hard times.

Dan

[Malcolm Mckinnon]

Dan,

My wife belongs to an exclusive women's club in center city Philadelphia that has been around since 1889. There is no way the place is staying alive on operations alone.

Lesson: A club can be sustained as long as deep pocketed members want it to be sustained.

Quod Erat Demonstrandum

Malcolm

[Sam Morrow]

Is the course in Delaware Bideman?

[David_Tepper]

Dan Herrman -

Clubs with very few members are going to have a tougher time surviving than clubs with very few rounds.

DT

[Steve Pozaric]

Dan Herrman -

Clubs with very few members are going to have a tougher time surviving than clubs with very few rounds.

DT

Exactly - until the members do the calculus and figure out what those few rounds cost per each!  

Unless of course that isn't why they are members there in the first place.

[Steve_ Shaffer]

Dan,

Like you, I live nearby a famous club(men only- I'll give you one guess) that, from all perspectives when I drive by, does not experience a lot of play. The club only serves dinner on Thursdays so there may be more then but;otherwise, it looks deserted.  The last time I played there the parking lot was loaded with heavy German metal and Bentleys. It's a second or third club for most members.

The answer is: the wealth of the members who can afford such a club.

[Dan Herrmann]

David,
I guess I'm old fashioned - why would you belong to a golf club and not use the facilities?

[Craig_Rokke]

I think Steve's right. I bet you could do a complex analysis at these types of clubs and conclude that each round of golf costs a very content member, many hundreds of dollars over their lifetime of their membership.

[David_Tepper]

"I guess I'm old fashioned - why would you belong to a golf club and not use the facilities?"

Dan H. -

I know someone who belongs to 3 rather high-profile golf clubs and probably does not play more the 12-15 rounds of golf a year at all 3 clubs combined.

As F. Scott Fitzgerald wrote in The Great Gatsby, "the rich are different from you and me."

DT

[Mike_Young]

I have never understood why so many use rounds played as a way to equate profit or viability. 

[Dan Herrmann]

Mike - here's why - when you see nearly empty parking lots all the time, you wonder what business model is being used.

[Mike_Young]

Dan,
I see your point but for many places it doesn't matter.  They know what it cost them to operate and they are going to divide it out amongst the members whether they play once or 50 times...so IMHO I think a better question is how do clubs that lose 25% of their members and cannot attract new members survive?  Fewer memebrs and lesser ( if any) initiation fees are more telling I think.

[Jud_T]

I was having cocktails at an exclusive men's club when my host pointed out a gentleman sitting across from me.  He said the guy belongs to 30 clubs and spends his days jetting amongst them.  Apparently he's not sweating the per round cost. Those damned .01%ers...

[Dan Herrmann]

That's it - the 0.01% ers!  I don't lament them, I wanna be them

[Frank M]

I think $250 000 and 5 figure dues, even for one round of golf, is extremely worth it if the one time you play is bringing out a guest who will give you millions of $$$$ in business.

[Dan Herrmann]

Frank - that's fair, but don't most companies have compliance rules these days about "entertainment" gifts?  I know my company limits entertainment to $25.  Of course, if you can get me on "Great Golf Club" and I pay, it's A-OK

[Frank M]

Frank - that's fair, but don't most companies have compliance rules these days about "entertainment" gifts?  I know my company limits entertainment to $25.  Of course, if you can get me on "Great Golf Club" and I pay, it's A-OK

I wasn't really referring to corporate memberships or employees bringin out clients.

I am fairly  confident "compliance" rules for the big guns at the top of the ladder are whatever they want them to be.

[Paul Jones]

The exclusive clubs that I have been fortunate to play, I asked this exact questions since they have few rounds.  The members told me they send a bill at the end of the year (divide it by number of members) if there is a lost that year.

[Rory Connaughton]

Dan

The club in question does not over staff the clubhouse. It does a lot of guest rounds during the week.

[Dan Herrmann]

Rory,
Great info - thanks

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