What is the Future of American Private Club Golf?

[Jason Thurman]

Does the current model still work? Will it continue to work going forward?

I'm not talking about the elite clubs. Places like Oakmont and Pine Valley are obviously going to be fine for the foreseeable future.

But is the market for mid-tier private golf dying? I worry that it is, both literally and figuratively. I'm in my twenties, and golf is more accessible for my generation than it has been for any other. While that accessibility means that many people my age have played and do play golf, I think it's also killed a bit of the "golf lifestyle" that goes along with mid-tier clubs.

We've chronicled the struggles of clubs that spend irresponsibly and fail to identify their place in the market. But I'm noting more and more clubs that do things the right way and work to serve a niche that should exist, but are still struggling mightily and finding a lack of demand. I just wonder if the market is disappearing.

So what does the future look like, and what factors are shaping it?

[Jeff Taylor]

"but are still struggling mightily and finding a lack of demand. I just wonder if the market is disappearing."

Maybe there are other reasons for markets to "disappear", but lack of demand pretty much covers it. Maybe we should focus on the causes for reduced demand.

Reduced discretionary income
Lack of large blocks of discretionary free time
Increased number of public courses that provide a decent experience without an annual commitment
Increased number of public courses offering annual commitment discounts that are more competitive than private facilities
...

[J_ Crisham]

One factor rarely discussed that plays a role is the extreme cost of a college education today . If you have 2-3 kids its 500K all in for 4 yrs at a good school today. A middleage parent factors that in when retirement looms. A CC Membership is 15-20 K all in per year in Chicago . The flip side is the young junior member who has 150k of student loan debt to service- good luck joining a club with that noose around your neck. The 10-12% tuition jump each year has hammered potential club members.

[Brent Hutto]

1) More and more public courses chasing fewer and fewer rounds of golf means they are collectively on the ropes.

2) I guess there aren't "more and more" private clubs but there's a fairly fixed number of them chasing fewer and fewer members. So they are collectively on the ropes.

Both of these are true individually. But the real tipping point may be that #1 starts making #2 worse than it would be otherwise. As this overbuilt public course industry chases revenue costs are driven down, down, down AND the severe overcrowding that drove many people to the private side becomes less of an issue. So the cost differential becomes more stark and at the same time the public game becomes more palatable. Tough on the private side of the business.

It's certainly true for myself. The public course I played on for my first decade in the game has gone from being a clogged, miserably crowded experience on weekend mornings to where you no longer even need a tee time. And their green fees are actually LOWER than a decade ago when they were packed to the gills. By comparison, my club gets more expensive every year as the membership numbers slowly dwindle away due to long-term members deciding to save a few hundred bucks a month by moving to any of a number of cheap, public and semi-private alternatives.

There's a semi-private course just a couple of miles as the crow flies from my club. A few of our members have moved there this year because they can pay a monthly all-inclusive subscription fee that includes all the golf they want to play with their golf cart. The price is less than half of our monthly dues and for that matter the all-inclusive deal is less per month than these folks were paying in cart fees alone as members at my club. For older guys who play 5-6 days a week, on fixed incomes, whose wives no longer play and whose children have been gone for decades I can imagine it's hard to justify a Country Club membership when all they really want to do is show up at 11:00am every morning and play with their foursome of buddies in carts, then have a couple beers and watch TV for the rest of the afternoon in the clubhouse.

The one saving grace at our club has been some limited but real success at attracting new FAMILY members. Unfortunately, only a minority of them are opting for the full County Club membership including golf. The majority are going for the Social membership at about 1/3 the rate which basically lets their kids use the pool every day and Dad can pay a guest fee and play the course up to twice a month. We've recruited enough of these families to make up some of the lost revenue but we still have to dial back expenditures a little farther every year, which can not as they say go on forever.

[Carson Pilcher]

The other factor is the increase in the quality of public courses.  20-30 years ago, your choices were playing at a muni or join a private club.  Now, someone can learn to play the game at a decent public course and then say to themselves, "I only play once a week at best.  $60 per round beats $60,000 initiation and then at least $900/ month in dues".

Now, most of us know that there is much more to a private club than the golf alone, but if you have never experienced it, it would be easy to have the view above.

[John Kavanaugh]

Based on the Doak Tour thread I didn't think there were any private clubs left.

[Brent Hutto]

The other factor is the increase in the quality of public courses.  20-30 years ago, your choices were playing at a muni or join a private club.  Now, someone can learn to play the game at a decent public course and then say to themselves, "I only play once a week at best.  $60 per round beats $60,000 initiation and then at least $900/ month in dues".

Now, most of us know that there is much more to a private club than the golf alone, but if you have never experienced it, it would be easy to have the view above.

Carson,

Most of the guys who have left our club for cheaper, semi-private alternatives are going to places that up until five years ago were private clubs. Except for a couple like our who are member owned, the other (far too many) privates have just about all thrown in the towel and opened up to public play and/or semi-private subscription "deals".

Of course their maintenance budgets and staffing are nothing like in their private guises but still a far cry above some "muni" cow pasture.

To be perfectly honest, if it weren't for the fact that my club is head and shoulders above anything else within a 40-mile radius in terms of conditioning I might be tempted to cut my cost of golf by 3/4 myself. I've just become addicted to not having cuppy fairway lies, having grass rather than hardpan in the rough and having greens that you can make a few putts on all but a few weeks here and there per year.

P.S. Oh, and I'm addicted to walking. If I were to ever become priced out of the private-club world the alternatives are to play nice, formerly private semi's which do not allow walking or move far, far downmarket to one of the few remaining public courses that still allow it. Around here walking a golf course is become a rich man's indulgence.

[Mark Chaplin]

Royal St George's has around a dozen green keeping staff, Royal Cinque Ports has eight. How many decent US member clubs have less than 20?

In UK member owned clubs you won't find bag drops, more than one locker room attendant, membership managers and function managers. Serious cost cutting is how US clubs will survive.

[Brent Hutto]

My club has roughly 10 FTE of greens staff. Normally it is about that in winter with maybe half again that many May-August. This year we were unable to staff up for summer.

PS But we continue to have 2-3x the likely RCP number of proshop and indoor staff plus numerous seasonal part time gophers, lifeguards, attendant, etc.

[John Kavanaugh]

You would have to pry my private club membership out of my cold dead hands. Despite the occasionally rude ignorant guest I love my fellow members. I would quit the game if I had to play with strangers day after day. Private courses will survive as long as there are inconsiderate golfers and my guess is that will be for quite some time.

[Brent Carlson]

I believe the UK model is the way to go.  How US clubs got so far away from this originally is the question in my mind.

[Jeff Dawson]

One of the things that has been overlooked during this contraction since 2007 is that the number of private golf members in the US has been stagnant for decades.  If I remember correctly I believe that number is about 2.8 million.  It never changed during the golf boom of the 1990's-2000's.  What happened during the boom was the same group of private club members joining multiple clubs.  At one point in the early 2000's I was a member of 10 clubs.  Today I belong to two.  I recently discussed this with a very wealthy multiple club member.  At one point he was spending more than 200k on annual dues.  Today he belongs to just his home club and one other.  His annual dues are less than 10% of what he was paying.  It's not that he can't afford it, he just realized how stupid it was.  His comment was clever.... once you realize an industry makes you feel  stupid its hard to continue to support it. 

So there it is.  The same number of private club members today as in the 1980's.  They are simply belonging to fewer clubs.  If a club thinks today that it is going to grow itself into a private club over time as a second club it has an owner completely out of touch with reality.  Most of the clubs that are not self sustainable today will either be closed and redeveloped or proceed as a public golf course.  A private/public model never made sense to me.  Why would anyone spend money to join a place they can simply pay greens-fees to play.  I am merely speaking of the US model here not the UK model. 

This contraction will be very good for the clubs that win.  They will have more active members spending golf dollars at fewer places.  While I spend less on golf today than I did ten years ago, I spend more at the clubs I am still a member of.  Something to think about.

[C. Squier]

You would have to pry my private club membership out of my cold dead hands. Despite the occasionally rude ignorant guest I love my fellow members. I would quit the game if I had to play with strangers day after day. Private courses will survive as long as there are inconsiderate golfers and my guess is that will be for quite some time.

I also think there is value in private golf for no-hassle tee times (or none at all) and public play suffers from morbidly slow (5+ hour) rounds.  The perceived ease and convenience of a private facility is worth something.  I also like that I don't have to whip out my credit card every time I play golf....prepaying dues takes the sting out 364 days of the year, even though I realize I spend much, much more on the private side. 

Jeff D - without naming names, how many of the 8 clubs you quit are having problems today?  I'd guess they are REALLY good clubs and unless they're strictly destination clubs, most are still relatively difficult to get into.  Not making a statement on your post, just curious.  I had 3, dropped 1 a couple years ago b/c I would play it once or twice a year at most.  Don't think they're full, but not hurting as far as I can tell.  You do raise an interesting point, at some level it just doesn't make sense to own all of them and be happy with the occasional visit.

[Andrew Buck]

"but are still struggling mightily and finding a lack of demand. I just wonder if the market is disappearing."

Maybe there are other reasons for markets to "disappear", but lack of demand pretty much covers it. Maybe we should focus on the causes for reduced demand.

Reduced discretionary income

I would really be surprised if this is the case for the Country Club joining public (with the possible exception of the last few years).  In inflation adjusted dollars, household income is up from the 1960's in every quintile, with the bottom 50% showing about 20% growth and the top 50% showing about 50% growth.  Anecdotally, there are certainly no shortage of late model $50k+ cars parked in relatively modest garages in our town.  Considering these vehicles come with nearly $1,000 month payments, I would think the disposable income is there for many, if it was their priority.

[/quote]Lack of large blocks of discretionary free time[/quote]

This has to be one of the largest ones.  Family dynamics have changed and work hour expectations have increased.  Kids organized activities can be such a drain on a families time, before you account for other shifts in social norms and expectations.

[/quote]Increased number of public courses that provide a decent experience without an annual commitment
Increased number of public courses offering annual commitment discounts that are more competitive than private facilities[/quote]

Both of these are undoubtedly factors for many.
...

[Thomas Dai]

Out of curiosity, what would be the percentage split between private golf clubs and private country clubs in the US?
ATB

[Jeff Taylor]

Thanks for the reply Andrew. I was just thinking of possible causes. Not necessarily listing them in order of magnitude or importance.
People may be making more but they may be spending and or saving more as well. Not sure.

[Dan Herrmann]

Put it this way - my wife Laura (who has a BS degree) is still out of work after 4 years of looking.  That's not that unusual, and I think explains many things.  Look at the USA's U-6 number, and you'll see the future of USA private club golf.

http://portalseven.com/employment/unemployment_rate_u6.jsp

[Andrew Buck]

Does the current model still work? Will it continue to work going forward?

But is the market for mid-tier private golf dying? I worry that it is, both literally and figuratively. I'm in my twenties, and golf is more accessible for my generation than it has been for any other. While that accessibility means that many people my age have played and do play golf, I think it's also killed a bit of the "golf lifestyle" that goes along with mid-tier clubs.

So what does the future look like, and what factors are shaping it?

Obviously this varies by community and demographic.

Within 15 miles of my house (mostly rural) there is 1 private club, 4 18 hole public/semi-private facilities that sell "memberships" and 3 9 hole courses (two of which sell memberships).  There are approximately 85,000 people in this radius to support the clubs.  

The private club, a relatively modest club with dues of approx $350/month and no $1,000 initiation (waived if you don't care about voting privileges) was on full life support a couple years ago, and is currently in a little better shape, but with a large chunk of the members 65+, it is going to need changes to survive.  There are 3 major factors at play, imo.  

1)  Family expectations have changed a lot in the last 40 years.  Very few of the *under 45* members will leave the family to play golf on mens day plus weekends to spend the majority of the day at the club.  Growing up, I feel there was a sizable group of guys that would not miss any of these days, and hang out long after rounds.  This leads to some members underutilizing the club and the perceived value declining, and leaves prospective members wondering how they will utilize it enough to get the value.

2)  Drinking and driving.  Right or wrong, the club facilities were utilized much more and people spent more money when there was much less concern for drinking and driving.  I know members who would otherwise stay at the club for drinks who head "into town" to make the trip home shorter, and others, like myself who would certainly like to consume more than 2 beverages on occasion if it was an option.  It wasn't right for my fathers generation to ignore those laws, but it is a change in reality.

3)  There is a public course in town (that I also have a membership at) which is on par (probably better) than the country club with memberships for $750 a year and green fees under $50.  I would guess most areas have this situation to some level where there is at least some public courses better than some of the private ones.  In this case, there are groups that play Wednesday afternoons, and Fri - Sun morning in well under 4 hours.  I wouldn't want to tee off at 10:30 on a weekend, but if all I care about is the golf and I can play mornings, it would be hard to justify 4X to join the country club over this course.  

In order to survive, we really have to change the focus to families.  In our area, the golfing public over a certain age has decided where they will play (and the country club has lost several to the nicest of the public options).  What the country club offers is the following:

1)  The ability to play a fast round and easy access almost anytime
2)  A pool for the kids.  
3)  A family atmosphere on Friday nights where the parents and kids can eat in the bar area, and the kids have a playground so you can be social without needing a sitter.
4)  An educated golfing crowd.
5)  For me, the ability to bring my young sons to golf with me and not have crowds other than men's day.  (Sadly, this is probably the biggest draw for me right now, but if the club was healthy I would probably lose this).

Even though I play more golf at the public course since it's kept with better firm and fast conditions and provides a slightly better test, I still feel more connected to the private club and play for them in all the area inter-club competitions.  I'm working hard to find ways to grow the club so it exists for us and our kids, but I do fear we will not be able to replace enough member in the next 20 years to survive.

[Mike Schott]

You would have to pry my private club membership out of my cold dead hands. Despite the occasionally rude ignorant guest I love my fellow members. I would quit the game if I had to play with strangers day after day. Private courses will survive as long as there are inconsiderate golfers and my guess is that will be for quite some time.

I also think there is value in private golf for no-hassle tee times (or none at all) and public play suffers from morbidly slow (5+ hour) rounds.  The perceived ease and convenience of a private facility is worth something.  I also like that I don't have to whip out my credit card every time I play golf....prepaying dues takes the sting out 364 days of the year, even though I realize I spend much, much more on the private side. 

Jeff D - without naming names, how many of the 8 clubs you quit are having problems today?  I'd guess they are REALLY good clubs and unless they're strictly destination clubs, most are still relatively difficult to get into.  Not making a statement on your post, just curious.  I had 3, dropped 1 a couple years ago b/c I would play it once or twice a year at most.  Don't think they're full, but not hurting as far as I can tell.  You do raise an interesting point, at some level it just doesn't make sense to own all of them and be happy with the occasional visit.

Hi John.

I think super slow play is for the most part a fallacy. There is no doubt that private play is faster than public play but unless you play the busiest public tracks at the busiest times, 4 to 4.5 hours is more the norm, at least in my experience. Due to work I almost exclusively play on the weekends and the key is an early tee time. I'll play this Sunday at my local muni and we will tee off at 7:28am. Hackers rarely want to play that early and we should be done in 4.25 hours walking the course.

Of course there are horror stories but if you choose the right course at the right time you can play relatively quickly. Nothing beats the Private Club conditions, courses and quality of players but our green fees will be about $30.00 and the course is nice and always in good condition.

[Dan Herrmann]

Another factor is that American private clubs do a HORRIBLE job marketing themselves.  Pick any random club in the USA and open their website.   Look for membership information, and you'll see how quickly a prospective member will be intimated and/or turned off.

[Andrew Buck]

So there it is.  The same number of private club members today as in the 1980's.  They are simply belonging to fewer clubs.  If a club thinks today that it is going to grow itself into a private club over time as a second club it has an owner completely out of touch with reality.  Most of the clubs that are not self sustainable today will either be closed and redeveloped or proceed as a public golf course.  A private/public model never made sense to me.  Why would anyone spend money to join a place they can simply pay greens-fees to play.  I am merely speaking of the US model here not the UK model. 

This doesn't surprise me.  Also, if someone went from carrying 10 memberships to  2 or 3, and the remaining 2 or 3 are clubs with some level of prestige, I'd expect they wouldn't have much trouble arranging to pay 95% of the other private clubs in America.  If the other clubs were so prestigious that they were in the 5% that you can't get on, the fact that you were invited to join likely means you'd have some way to gain access anyway.  

[Brent Hutto]

Good point. Even my club which can't afford to turn away anyone short of a infamous axe murderer or the dictator of North Korea does not have one its web page a clear "Here's what it costs to be a member" but instead gets by with a general solicitation to get in touch for complete membership information. Seems strange in the current day and age.

[C. Squier]

You would have to pry my private club membership out of my cold dead hands. Despite the occasionally rude ignorant guest I love my fellow members. I would quit the game if I had to play with strangers day after day. Private courses will survive as long as there are inconsiderate golfers and my guess is that will be for quite some time.

I also think there is value in private golf for no-hassle tee times (or none at all) and public play suffers from morbidly slow (5+ hour) rounds.  The perceived ease and convenience of a private facility is worth something.  I also like that I don't have to whip out my credit card every time I play golf....prepaying dues takes the sting out 364 days of the year, even though I realize I spend much, much more on the private side.  

Jeff D - without naming names, how many of the 8 clubs you quit are having problems today?  I'd guess they are REALLY good clubs and unless they're strictly destination clubs, most are still relatively difficult to get into.  Not making a statement on your post, just curious.  I had 3, dropped 1 a couple years ago b/c I would play it once or twice a year at most.  Don't think they're full, but not hurting as far as I can tell.  You do raise an interesting point, at some level it just doesn't make sense to own all of them and be happy with the occasional visit.

Hi John.

I think super slow play is for the most part a fallacy. There is no doubt that private play is faster than public play but unless you play the busiest public tracks at the busiest times, 4 to 4.5 hours is more the norm, at least in my experience. Due to work I almost exclusively play on the weekends and the key is an early tee time. I'll play this Sunday at my local muni and we will tee off at 7:28am. Hackers rarely want to play that early and we should be done in 4.25 hours walking the course.

Of course there are horror stories but if you choose the right course at the right time you can play relatively quickly. Nothing beats the Private Club conditions, courses and quality of players but our green fees will be about $30.00 and the course is nice and always in good condition.

I don't need to run around a course, but if 4:15 is the pace set by the first group out, that's not the course for me.  I'd bet that translates into at least 5 hours for tee times after 10:00 am.

[C. Squier]

Another factor is that American private clubs do a HORRIBLE job marketing themselves.  Pick any random club in the USA and open their website.   Look for membership information, and you'll see how quickly a prospective member will be intimated and/or turned off.

Thank the tax code for that. Start "advertising" and watch your tax exempt status fly out the window.  The vagueness and "invitation" language is there for a reason. 

Though, I would sometimes argue that a club successful enough to be taxable would be a good problem to have in some cases.

[Andrew Buck]

Good point. Even my club which can't afford to turn away anyone short of a infamous axe murderer or the dictator of North Korea does not have one its web page a clear "Here's what it costs to be a member" but instead gets by with a general solicitation to get in touch for complete membership information. Seems strange in the current day and age.

Yep.  Of course this doesn't apply to the elite clubs or those that are thriving, but there lack of information for clubs in need of members is bad business, imo.  Any "product" that wont provide a price without getting a sales pitch "like a timeshare" screams bad deal to me.