OT-Initiation Fees still going up?

[Jeff Schley]

I don't pay attention to most of the emails received to members, but checked a couple this month. Kind of surprised that initiation fees for all categories are going up, 13% to 33%? WTF I thought it peaked and was going to hold steady for a while? At least guest fees are the same this year, after going up 33% at one course and 50% at another last year.

[Wayne_Kozun]

I don't pay attention to most of the emails received to members, but checked a couple this month. Kind of surprised that initiation fees for all categories are going up, 13% to 33%? WTF I thought it peaked and was going to hold steady for a while? At least guest fees are the same this year, after going up 33% at one course and 50% at another last year.

Where are you located as I would think that this is highly dependent on your local market.
My club here in Toronto has been raising initiation rates but we are still below the high of the mid 2000s.  My club was not full from about 2007-2020.  But since Covid we have a waiting list which keeps growing.  The supply of private clubs in the Toronto market has shrunk a bit in the last decade as a few clubs have sold out to real estate developers and no new clubs have opened.  So while demand >> supply it makes sense to keep raising fees.

[Peter Sayegh]

Kind of surprised that initiation fees for all categories are going up, 13% to 33%? WTF I thought it peaked and was going to hold steady for a while?

Jeff, why so surprised?
This scenario is at least two years old.
Apparently you missed this thread:
https://www.golfclubatlas.com/forum/index.php/topic,72625.0.html


Courses/clubs/resorts are striking while the fairway wood is still hot.
Again, (hashtag) grow the game. 

[Ian Mackenzie]

Initiation fees are going up as are monthly member dues to keep funding the "arms race" at private clubs.


Public-access courses are not exempt from this either.


Example: I paid $175.00 to play a "top ranked public course in SW Florida" last month and it was one step away from being a "cow pasture". I was horrified.


The whole world seems upside down today.


Clubs and courses will continue to raise fees/dues/prices until the "market" tells them that they can't.


same goes with the obtuse real estate market in Florida.


That reckoning aint here yet.

[Rob Marshall]

Initiation fees are going up as are monthly member dues to keep funding the "arms race" at private clubs.


Public-access courses are not exempt from this either.


Example: I paid $175.00 to play a "top ranked public course in SW Florida" last month and it was one step away from being a "cow pasture". I was horrified.


The whole world seems upside down today.


Clubs and courses will continue to raise fees/dues/prices until the "market" tells them that they can't.


same goes with the obtuse real estate market in Florida.


That reckoning aint here yet.

Real Estate  market in SW Florida is starting to soften. Prices are starting to come down but still way over what they were precovid.

[Craig Sweet]

Sounds as if many clubs need to revisit their mission statement and check their values.

[BHoover]

The club model here in the US is eventually going to experience a correction. It is inevitable.

[Tim Martin]

Initiation fees are a sore spot for members who paid the most. Those that slid under the tag in the late 2010’s through the onset of Covid were beyond lucky as far as what they paid in “throw away” money compared to the present environment. It will be interesting to see how the clubs that find themselves at the margins during a downturn handle the issue especially if they increased initiation fees dramatically post Covid. Karma has a way of winning out.

[David_Tepper]

It would be interesting to see an age group profile of most club memberships: what percentage of the membership is in their 40's, 50's, 60's, 70's & 80's. My guess is a healthy percentage of the members at most clubs are at least 65. As the aging baby boomers fade away over the next 10-15 years, many clubs will be looking hard to find new members to replace them.

[Rob Marshall]

It would be interesting to see an age group profile of most club memberships: what percentage of the membership is in their 40's, 50's, 60's, 70's & 80's. My guess is a healthy percentage of the members at most clubs are at least 65. As the aging baby boomers fade away over the next 10-15 years, many clubs will be looking hard to find new members to replace them.

Not at my club in Rochester NY. I would guess average is 50's. Club I'm on a waitlist for in Naples Florida is over 65.

[Wayne_Kozun]

It would be interesting to see an age group profile of most club memberships: what percentage of the membership is in their 40's, 50's, 60's, 70's & 80's. My guess is a healthy percentage of the members at most clubs are at least 65. As the aging baby boomers fade away over the next 10-15 years, many clubs will be looking hard to find new members to replace them.

That was the case, but it has changed.  My club has added a lot of people since Covid and they are on the younger side.  The Covid influx of members has very significantly reduced the average age, but I don't have the exact numbers.  And WFH allows younger members that are still working to play more golf.  My club has a business centre, so you can work from there and then go out and play golf.

[Wayne_Kozun]

The club model here in the US is eventually going to experience a correction. It is inevitable.

Didn't that happen from 2008-2019?  Both in terms of less demand for golf memberships and little or no growth in the number of clubs due to the drought in course construction.

[Tim Martin]

The club model here in the US is eventually going to experience a correction. It is inevitable.

Didn't that happen from 2008-2019?  Both in terms of less demand for golf memberships and little or no growth in the number of clubs due to the drought in course construction.

If history is any indicator it will certainly turn down again as golf like other leisure time activities has proven to be subject to cyclical contractions. I’m wondering when the current post Covid boom in new course construction dies down if we experience another stretch as prolific in the next fifty years? I sure hope so.

[Tim_Weiman]

The club model here in the US is eventually going to experience a correction. It is inevitable.

What do you think will replace the current model?

[Tommy Williamsen]

I was a national member of a club. My dues went up to $800 a month, climbing to $1000. I resigned. It was close enough that I went for two days ten times a year. Each time I went It was at least $250 for lodging and food and gas. It just got to be too expensive. The initiation fee more than doubled.

[BHoover]

The club model here in the US is eventually going to experience a correction. It is inevitable.

What do you think will replace the current model?

I do not know. But to assume the Covid-induced boom is going to continue seems unreasonable. At some point there are not going to be enough willing to pay increased initiation fees, particularly for destination memberships.

[V_Halyard]

Jeff,
I am familiar with multiple courses in smaller market areas that have upgraded their GCA and have subsequently reached full membership with wait lists and have upped initiation and dues. The arguably were below market value given their investment in GCA, their demand for play, and requests for membership.
(Shall remain nameless but read between the lines)
The classics have each delivered significant and highly regarded restorations, and the modern has performed a renovation on what was already a well regarded course.
Based on those projects, they have all reached full local and national membership and are managing waiting lists...
[size=78%]Driven by the quality of the GCA.[/size]


Their dues and initiation fees were previously below comparably and some cases, lesser architected courses in larger markets.

[Wayne_Kozun]

If history is any indicator it will certainly turn down again as golf like other leisure time activities has proven to be subject to cyclical contractions. I’m wondering when the current post Covid boom in new course construction dies down if we experience another stretch as prolific in the next fifty years? I sure hope so.

Do you have data on course openings per year?  I would assume that there had been more in the last few years, but I haven't seen the data.
All I can find is this, and it is two years old: https://golfweek.usatoday.com/2022/02/12/national-golf-foundation-course-closure-rate-continues-decline/

The number of U.S. courses (as measured by 18 holes) has dropped 11 percent since the peak in golf course construction prior to the recession that began in 2007. Since 2006 more courses have closed than have opened every year, most the victim of overbuilding which preceded the burst of the housing bubble.
The NGF also reported that the private course inventory increased in 2021 for the first time since 2007. It was a net increase of 12 facilities, but as the report noted, it wasn’t a loss.

[MLevesque]

I’m seeing the private courses here in Connecticut have 1) increasing initiation fees, 2) assessment fees and 3) some with waiting list north of 5 years.

[cary lichtenstein]

florida is totally different

[Duncan Cheslett]

I was a national member of a club. My dues went up to $800 a month, climbing to $1000. I resigned. It was close enough that I went for two days ten times a year. Each time I went It was at least $250 for lodging and food and gas. It just got to be too expensive. The initiation fee more than doubled.

This puts the difference between the US and the UK into stark perspective.


I'm a full member of a UK top 50 (England top 20) links course a 3 hour drive away. I go once a month or so. Dues just went up from £625 to £650.


FOR A YEAR!!!

[Jim_Coleman]

   Initiations and dues will continue to go up until people stop paying them. Hasn’t happened yet where I play. There aren’t alternatives people are willing to to take.

[Steve Lapper]

This is purely a function of the supply-demand curve applied to localized and regional markets. Add in goods and services inflation and you have a prototypical tight market.


Golf grew substantially in COVID and continues to grow organically, albeit at a slightly slower rate. Why?


It's now an activity endorsed by a younger generation, one that has experienced (even if tangentially), the widening funnel of off-course golf (i.e. golf entertainment: TopGolf, PopStroke, alt media brands (NLU, Foreplay, Good, Good). Short courses, especially lighted par 3's like Grass Clippings, soon-to-be-launched Playground Golf, etc.. are also contributing to the underlying organic and demographically-shifting growth of the game. The growth of off-course golfers, according to the NGF is outpacing the growth of on-course golfers by nearly 2-to-1.  Women are also growing their initiation and participating rates faster than men. Even LIV is playing some small role in attracting a younger audience.


Private clubs are recognizing this phenomena and re-setting their facilities and services accordingly. As an owner of several clubs, I'll testify to the fact that women are now making the joining decision on equal footing with their male counterparts. They want a safe, centralized, socially-comfortable place to center their family and sporting life around. Younger people with means want a more relaxed and fun-loving club that will tolerate somewhat looser hospitality constructs (i.e. jeans in the dining areas and music on the course) than their parent's clubs.


 Golf and country clubs are especially attractive in areas of strong family formation and approachable residential markets. All of this is highly localized and responsive to regional economic conditions. A testament to this is most rural or exurban clubs have not been able to raise their initiations or dues nearly as high or fast as more desirable ones found in more densely populated areas.


Initiation fees at clubs are an economic calculus equation of who the audience of current and future users are. Club finance, for most places, treat initiation fees as cheap capital designed to augment or replace debt for current and future capital expenditures. Dues are a function of meeting yearly operating budgets. The combination sets the pace for 3,5, and 10yr budgets.


With long waiting lists and golf's current and safely-projected popularity, it'll likely take a deep recession or economic shock to break this trend.

[archie_struthers]

 


Here at the Jersey Shore (southern edition) we have seen a huge increase in initiation fees at the private clubs. Most at least doubled and a few have risen 400% to close to $50,000 or more. Quite a change for us and not too many people would have predicted it .


The owners of the clubs now typically are very wealthy and have bought the clubs for status and or just to have a good place for their friends and families to enjoy golf. They have invested in the clubs and aren't afraid to put in the necessary capital improvements to take the golf and food to another level. Atlantic City CC, The Shore Club , Stone Harbor CC , Greate Bay and the Union League National all fall into this umbrella.


Luckily there are still some affordable golf options here in South Jersey, but the price of golf has forever changed 

[David Amarnek]

Here in St. Louis, the big 4 clubs (St. Louis, Old Warson, Bellerive, and Westwood) now have initiation fees well over $100K.
Crazy!