What Private Country Clubs Will Have to Do to Survive

Clubhouse2._thumb.jpgSeveral questions arise when discussing today’s Private Country Club’s survivability.

  • What is causing Country Clubs to fail?
  • What can Country Clubs do to avoid bankruptcy?
  • What is the attitude towards Country Club lifestyle by the next generations golfers? 

Just to mention a few.

I discussed most of this in my recent blog..Why Are Country Club Giving the Baby Boomer Golfers the Shaft?

The Future of Private Country Clubs Is In The Hands of The Next Generation

The next generation of golfers, the children of the Baby Boomers, are going to be managing the future of private country members for a long time.  They will have to find the answer to …what will it take to get the under 40’s to join private country clubs?

Fortunately, this era of golfer does not react to things as the non-golfing marketing firms feel they should.  Gimmicks, or tricks, are not going to get them to join these clubs.

There have been a number of programs put into place over the years to court younger members, but none have long lasting effects.  The solutions to Country Club survivability will come only after they changed direction.

If Private Country Clubs are to survive they will need to offer things the current, and future, members want, or need.  In order for the Club to change they have to solve the problems they currently have.

From that review will come the answer to the questions on what private country clubs will have to do to survive.

So lets take a look at what some of the problems Country Clubs have threatening their existence and where there are opportunities for the private country club to change.

Aging Membership

It is true Country Clubs, especially the private equity clubs, failed miserably in marketing their club’s membership during the ‘hay days’ of the booming golf economy.  To the most part these clubs did not have a marketing plan and saw no need for one since they depended on their members to recruit new members when the time came to fill a member spot who is leaving.   In many cases, the private club charters require a new member to be sponsored by a current member in order for them to become a member which would negate the need for a viable marketing plan.

Now with the majority of private club’s membership in the autumn of their life and many having to leave the club for health or financial reasons, the number resigning is more than the current members can recruit from their network of business associates and friends.

So now most of these clubs are left with looking outside the box for the first time to fill their memberships.  This means these older established, yes, sometimes stuck in their ways, private clubs are looking to the younger generation to fill their club’s needs. But, will this solve their problems?

Aging Facilities

Many of the private country clubs are very old and need a tremendous investment in the complete reconstruction of their facilities.  Why these clubs let their facilities get near dilapidation usually is based on a bad decision someone made years before.  Of course, that ‘Stuck in their ways’ attitude comes up many times as the reason.

With an aging membership the funds needed to completely rebuild clubhouses and golf courses will not happen.  Having an old worn out clubhouse does not make it easy to recruiting younger members.

Debt Ridden

The newer country clubs…the clubs built in the past five to 8 years by over zealous real estate developers… are the country clubs sucking major air in this failed economy.

In the club’s operations I have examined, I found it to be in many absolutely no way they are going to avoid bankruptcy unless investors who are demanding excessive returns just walk away…which would be less expensive for the investors than trying to get their ROI out of a debt strapped private club that nobody can afford.

Many of the older clubs who attempted to compete with these newer clubs resorted to hiring expensive operating companies to manage and market their facilities.  As a result the cost of those operations put them into a bottomless pit of debt.

There are only a few thousand people in the world who could afford these type of facilities and from the few dozen of them I know they are already over committed in the number of private club memberships they can realistically maintain.

Still the people or groups of investors who put these clubs in this situation will really need to take a hard look at their options and do like many are doing now and selling the clubs to the current membership at a tremendous lose and just Walk Away.

Boring

Then there are those clubs that are doing well financially.  The private clubs ‘making it’ usually have a well trained club manager who knows golf and what it takes to float the club’s boat through hard economic storms.  Unfortunately, these clubs look boring with sparing amenities and average quality of a golf courses.  This makes the club’s appeal to the new generation of country clubbers work against their marketing.

Still, with the lose of older members and the costs of infrastructure replacement is resultsing in these well healed clubs becoming also in need of  recruiting new members to keep the operations budget balanced.

So, what is it going to take to place the private country clubs on solid footing for the next generation of golfer?

Did Not Work

Lets take a look at some of the things some of the non-innovative private clubs have tried over the years that Did Not Work.

Reciprocate Memberships: This is a program still used by some private clubs that has failed miserably to accomplish what it was needing to accomplish which was ..bring in fresh money.  This program used by private golf clubs gathered together and created an affiliation between several clubs so members of each club could play at each other’s club.

This program is still in place for many private country clubs.   What these programs did not do was generate significant revenue for the clubs.  There was always a billing issue that primarily was caused by the lack of technology or the incompatibilities between the club’s technology.

Lack of trust between clubs and the perceived differences in value each club had for their faculties was the root cause why the Reciprocate Membership Program fail to reach its goal for most clubs .

This is why some of the new innovations to the reciprocating plans that are being developing today, …where members of one club are allowed to swap tee times between another club…, all sound good but are not producing new members or additional revenue.  These reciprocation programs loose steam once the private clubs find they are not really getting anything out of the program.

Junior Membership: This program developed for private club members under the age of 35 offers a discounted membership fee until they reach a certain age.

This statistically should have worked, but in reality, from the studies I have made, over 60% of the younger generation who signed up for these packages dropped their membership all together when they reached the maximum age requirement.  This is to avoid paying the more profitable Full Membership rate.

As a result, these clubs experience the ‘revolving door syndrome’.  The Junior Memberships Programs will bring in a younger members for awhile.  Unfortunately, most of the junior members will decide they would rather pay Full Rates at a better or more convenient located club.  As a result they leave.

What these private country clubs using these junior membership programs do not realize is the huge risk they take of running in the red financially or being strapped with age discrimination law suits from the older members.

What Works

Membership for the Day

One of the most favorable plans adopted by many Private Country Clubs is offering a non-member the opportunity to become a member for a day or month.

This allows the guest to come in see the club, bring in friends to get their opinions of the facility.  The investment of this program is recovered from the discounted monthly membership due these potential members would pay.  So if they decided not to become a full member then the club has not lost.

Play for Free Programs

This is a new concept that is taking off that offers a non-member an opportunity to be a member for the day at the private club for FREE if he/she brings three other non-members to play golf at the course at a discounted guest fee.  This is a great way to market the club to new members.

Now that we briefly looked at some of the top issues causing the problems private country clubs have and taken a look at some of the recent attempts to solve the problem that did and did not work, lets now look at why they failed and what will work to solve the ultimate solutions..recruiting a Younger Membership.

Today’s Golfer

First, in order to solve any problem dealing with human beings you have to know their needs and wants. Lets take a look at who is playing golf today and review their interests.

When you look at the millions of average golfer today that are under 40 years old there are not that many Tiger Wood clones or Paula Cramer wannabes.  Nor, are we talking about all of today’s golfers being Donald Trump style business people.

The average golfer loves golf as much as previous generations. They look for ways to play golf while meeting all of their other needs in life.

What has changed the attitudes of today’s golfers towards private country clubs comes from the change in the economics and the culture that has developed around the change in the economy.

Most golfers work. Lets face it.  How else can they pay for golf if they did not work?

From the failure of large corporations to hold up the economy came the creation of the small business owner.

These more enterprising young golfers now are taking the economy by the throat.  Most of these younger potential private country club members are working in fast pace small businesses that require a lot of attention.  Today’s golfers have to stay in touch and in some cases stay in constant touch with their business’ ever changing markets.  This makes committing to anything in business or life tough since there is not enough time in a day to get all they need done and then play golf.

These golfers also have families and a working spouse.  The need for family time sometimes pressure the number of hours in a day.  So today’s golfers need for quality family time is paramount.

Evolving Country Club Environment

So, what the private country clubs are dealing with is golfers who are focused in their business, who move quicker, deal with change faster, are constantly on top of technology and have a very demanding family schedule.  To lure these golfers into the country club environment will take the club’s meeting all of their needs immediately.

What Today’s golfers are wanting is convenience.  Those country clubs that develop programs and construct facilities to handle these golfers wants and needs will be the clubs that survive.

Country Clubs of tomorrow will need to offer their members a mix of business related programs and a facility that allows business to be conducted at the Club.  The successful Private Country Club will have business conference centers, business centers and meeting halls that cater to the member’s business needs.

The golf at Private Golf Clubs will remain private since today’s golfers are not into anything that waste their time like slow pace of play that is inherent at public golf courses.  The Country Club of tomorrow will have to construct more family friendly facilities..playgrounds, water parks and day care centers.

Once country clubs move into this direction and invest into creating these environments then the reciprocate club programs will be accepted by more members who see the value of being able to take their business interest to other facilities to possibly reach new markets.

Business golfers will then see the benefits to sharing their tee times with a members at a club across town, or across the country.   This would develop an opportunity for the members to get closer to a market of interest in another location.

As long as the programs meet the golfer’s business needs then the programs will be accepted by Today’s Golfers.

The solution to Country Club’s survival stands on meeting the next generations wants and needs and these wants and needs are based on their members business’s wants and needs.

Private clubs need to look to helping their members improve their business to substantiates the cost of being a member and provides a deeper purpose of becoming a member of a private country club.  Status quo has to be stopped and change made to offering today’s private country club members more than a frill.

Golf will benefit when more of the golf industry adapts to Today’s Golfer’s needs.

Let me know how I can help.

Technorati Tags: ,,,private country clubs,country clubs,future of golf,business of golf,

Comments

  1. says

    In today's environment, any private club which is not looking for ways to add value to its membership just isn't paying attention. We've developed a program where private clubs can organize and host international travel for their members at no cost and very little effort on the part of the club. And a proposed trip only needs seven paying members to be a success. Lots of clubs have jumped at the opportunity. What amazes me is that more than half the clubs we've approached have not. They just don't seem to get it and think continuing to do the same old thing will somehow replace the members they lose. You're right. Successful clubs need good professional leadership.

    Sam Baker
    Haversham & Baker Golfing Expeditions

  2. says

    Sam,
    Thanks for your comment. I feel the travel component you suggested is a much more viable offer to private club memberships than other third party offerings many clubs are using or considering. Now, if your excursions had a business agenda, many more members would be all over it. Let me know how I can help.

  3. BodDisqus says

    Scott:
    You put your finger on the big things. I have been a private club consultant for the past 20 years, specializing in membership marketing, strategy and development. You touched on some of the many ingredients. There are plenty more. If I had to put it into the simplest of terms, private clubs will need to make the decision to join a pragmatically “intelligent” one, and no longer rely on ego, luxury, signature golf design or tradition. The future generation of golfers do not care about the “prestige” or bragging rights of club membership. They do care that the decision to join makes them look “smart” to their spouses, children and their friends.

    Here some of the elements in my mantra:
    1. Lower the dues cost (“More members make a better club” – Robert Dedman, Club Corp)
    2. Get the Pros out on the practice tee giving free clinics and playing a few holes with club members who might be new or struggling (that is an endless supply of opportunity). How many sweaters need folding in the golf shop anyway?
    3. Pay the Pros better and include lessons in the dues.
    4. Have a professionally trained, full time Membership Director
    5. Have a full time “Communications Director” – One of the biggest problems in clubs is inconsistent communications and terrble follow up on member interest and new ideas (i.e., energy)
    6. Develop a professionally facilitated strategic plan and a strategic membership plan and stop following what other clubs are doing.
    7. Develop and adhere to a set of Quality Standards for product, service and facility (doesn't need to be Four Seasons level, but needs to be consistent quality).
    8. Keep the golf course in great condition. Fix the nagging issues (i.e., bad drainage, hard sand in bunkers,
    9. Develop and maintain Governance Best Practices at the Board level
    plenty more…

    Bob Bodman
    President, ClubResources

    • Robert Yntema says

      Dear sir,

      there is one thing I don’t understand: number 1 element in your mantra is “lower the dues cost”. But in your article on your website you state that this well travelled path is accompanied by numerous adverse effects and that clubs should make a hard right turn = develop a strategic membership plan. Could you please explain that to me since i am very interested in the subject. I am a golf club manager from Holland and very impressed by your work.
      Kind regards, robert Yntema

      • says

        Robert,
        First of all, thank you for your comment.
        Developing a strategic Membership plan refers to the management or owners of the country club first find out what their members are interested in doing at the club then look towards finding ways to make that happen. As far as reducing the dues..most clubs have hidden or allusive budgetary issues related to the over expectations owners have for the return on investments or in bloated executive salaries. Getting rid of those burdens allows for clubs to reduce the dues making becoming a member of the club within reach of more people who are interested in becoming a member.

        Hopes this helps.

  4. says

    Bob,
    Yes, all you have mentioned is what I found when I drilled down into how country clubs are mismanaged. It looks from the tone of your message that you may have ventured off into reviewing the CCA sell to KSL since most of the items you listed run as their mode of operation. If this is the case I hope one day we get to meet so we can compare notes.

  5. says

    Bob,
    Yes, all you have mentioned is what I found when I drilled down into how country clubs are mismanaged. It looks from the tone of your message that you may have ventured off into reviewing the CCA sell to KSL since most of the items you listed run as their mode of operation. If this is the case I hope one day we get to meet so we can compare notes.

  6. brian says

    As a full time membership director at a private club, i have proposed lowering the dues for full membership and was met with much resistence. Our club is considering an increase and i am extremely fearful that it will cause unprescedented attrition from the club. Is there any research or data available that shows lowering dues may in fact increase overall membership as well as increase the bottom line?

    • Scott says

      Brian,
      I am on our Board at our country club and we decided last year that, like everyone, needed members. We did not want the usual 3 or 4 new members but something significant. We decided to cut our price from 6000 to 2500 for a two year committment. We picked up 82 new members and hope the majority of them I the third year. Our sales pitch to our existing members was that we need money, but we also need bodies. These new members were also our way of avoiding the dreaded assessment. In year three, these 82 members dues will be increased to 75percentof the other members as a way of “stepping them up”. We feel that 90 percent of them will stay for the third year.
      Scott

  7. says

    Brian,
    Right now, no statistics and data on substantiating lowing membership dues is available. The need to reduce membership fees is based on common logic. However, more clubs are dropping dues and initiation fee. Once more time has passed more data can be obtained on how they are doing with this change.
    What takes place in all cases I have reviewed where clubs refuse or are reluctant to reduce their membership fees is the operations budget is so top heavy with salaries for executives that provide no relevance to the profitability of the club. In other words what keeps the membership due up is from top executives salaries, third party management companies fees or unruly returns on investment requirements. Reeling these costs in would usually result in the ability to reduce membership fees by at least 30%.

    Clubs that do not get real during this economy will be left behind.

  8. maryellenhennel says

    I belonged to a private club for over 30 years. When my Husband walked out after 42 years; I had no access to that club. Yet, the papers were to mr. & Mrs. I golfed there, had dinner there; yet, I no longer was a member. Although, the “scum bum and his new wife still were members. I live on the course only 4 doors away from the entrance. Yes, clubs do have to change. You pay a big fee to join; yet never see it again. AMEN

  9. maryellenhennel says

    I belonged to a private club for 30 years. After 42 years of marriage, my husband walked out. He and his new bimbo still had club privilages. (We were always listed as Mr. & Mrs. Yet, all my privilages stopped. I live on the 11th tee and played golf frequently. Now I cannot play golf or even eat there. No justice.

  10. Dennis Moody says

    we are a membership committee at a private club interested in the idea of increasing memebership with the “business center” idea. Can you point us to clubs where this has been done that we could investigate? thanksDennis Moody

    • says

      Dennis,
      There are a few country clubs around the country that have added buildings to their facility that can be used for conferences, seminars or tradeshows. The one that comes to mind I recently visited was the Seville Country Club in Gilbert, AZ. A very innovative country club that I was very impressed with their innovation towards things ppeople really look for in a Private Club.

  11. bobby roosco says

    The younger generation have seen the economy dip enough to know that frugality is a necessity. When it comes to country clubs, it seems to be an exclusive club. I would think that private clubs need to appeal to the athletes. Not every athlete is rich and so they should cater to them in that sense. If they want it to be exclusive still but also inexpensive, then they should only allow exceptional athletes into the club.

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