Virtually every club I have personal knowledge of has had trouble with this issue.
Where I play now, a loan taken out for clubhouse renovation in 1988 finally sunk the club in 2010. During that time, the course slowly deteriorated due to the drag of the mortgage payments.
One other CC here went under many years ago... after spending a bucketload of cash on a new clubhouse.
In my hometown the nine-hole course that I learned the game on did a nice new clubhouse and probably only survived it due to the support of several individuals with deep pockets who didn't want to see it fail.
The other remaining club where I live recently spent something like 3.5 million on their clubhouse.
A club that's about an hour away spent $5 million on their clubhouse.
My mother's club in AZ spend more than $3 million about 10 years ago, and now they are talking about doing a major remodel again.
One of the clubs my cousin was a member of has remodeled their clubhouse two to three times during a period when flooding has reduced the course to 15 holes about every other summer. He quit the club the last time.
The only other Donald Ross course around here is now a daily fee--on it's second set of operators I believe. I talked to a gentleman there last summer who had been an employee since the 1960s and he told me that the board came to the employees and said, "WE can't pay the mortgage anymore." I asked him if it was the MASSIVE clubhouse that did them in. He said he thought they might have survived except for the loan they took out to build a new, ultra-special pool.
But none of those clubs has done anything significant to make the golf course more attractive.
NO ONE I have ever talked to has joined a country club because the clubhouse was nice, yet clubs all over the country continue to make this mistake.
I am convinced it's a product of the fact that clubs almost never do rational cost accounting. Several years ago I had an argument with my club's long-time recording secretary over the issue. She insisted that F&B was subsidizing the golf course maintenance. She said, "Bob (several times president) and I proved once and for all several years ago. Matt (super) and his guys are great, but they are just a drag on the budget."
Here, like many other clubs, all the dues income goes into a admin fund, golf course operations has ZERO income, and F&B have no costs other than labor and materials.
I cannot understand why the boards can't see that failing to charge F&B for mortgage, utilities, building maintenence, etc., etc., is giving the operation a false image of making money.
Lately, I keep hearing, We need a pool, or tennis courts, or banquet facilities, or .... to bring in the new members that are going to "save" the club.
I'm not buying it.
K