OK, before all you under forty year old Young Executive Professional Entrepreneurial Business people all get up in arms over this issue,let me state the point here first and then let the debate begin.
Does offering a membership program that takes away from a club’s budget make sense?
Many private country clubs and dinner clubs offer a membership package for people under 40 years of age. Some set the limit at 35 years of age. Young Executive Membership packages usually have a lower initiation and monthly membership due than the over 40 members dues. These Young Executive Memberships programs are being created and launched at private clubs around the country in an effort to freshen their membership. On the surface these packages look good and carry an image of making sense. However, do they help the club in the short term or long run?
Several questions develop with this plan which highlight the concern with if these packages accomplish what they are created to do. Does bring in younger members to stimulate a club’s membership ultimately generates more revenue? On paper it looks good, but does it actually work?
The questions continue:
If the Net Cost (meaning no profit is included in this figure) per month is $200 to service each member of a private country club (or club for that matter), no matter what their age is, then does it make sense to offer a membership package that Nets $100 a month until that member reaches 41 Yrs Old (or 36 in some packages)?
If the answer to this question is yes due to the NET $100 does produce a profit, then the next question is obvious..
Why are the regular members being gouged? Are the regular members subsidizing the young executives?
Rationale
Some of the reasons I have been provided by the dozen or so members of country clubs around the country whose club’s offer Young Executive membership package have told me it is to stimulate the club’s economy with new and younger membership. When asked for the rationale that explains offering a package that runs in the red provide to the club’s operations budget I am told that the membership is told that “the investment the club makes in bringing in younger members at a reduced membership initiation fee and monthly due will be recovered from these younger members increased spending while at the club”.
Meaning that the club’s management is taking a risk in betting the club’s money hoping these younger members will frequent the club more and spend money for F&B and in the golf pro-shops.
Realities
This plan works on well on paper and with a coerced individuals. Sure it offers young people who are starting at lower salaries become a member of a country club and then, in theory, as their income increases from their advancement in their business, they are then levied the full rate when they get to the maximum age.
However, in reality these younger members spend no more or less than the regular member. The morale of the older members who see through the smoke and mirrors to realize they probably are subsidizing these youngsters memberships, feel discriminated against for being over 40.
Actually, the young members at my club, and other clubs around the country I have visited, have told me they:
- Only come to the club for the golf since four rounds of golf a month at the young executive rate is cheaper than four green fees at the public course.
- Never rent a cart since they are into fitness.
- Never purchase anything at the halfway house due to the inflated costs.
- Seldom bring their wives or kids since that costs too much.
- Only bring the wife and kids to the club during the summertime when the pool is open.
- Never eat at the club.
- Keep the bar bill to one beer or drink
As far as their thoughts on staying with the club after they pass the maximum age for the package:
- I am only here because the club I want to be a member of permanently does not offer a Young executive package.
- I am not concerned with losing my initiation fee when I drop my membership here in two years when I turn 40. I look at the initiation fee like a depreciation on a car.
- I am out of here on my birthday. I would rather be a full paying member at a club with better amenities.
So the question still stands, does offering a discounted rate to people under 40 really help the club survive? Since private golf clubs and country clubs sit in the middle of the golf industry’s economy there is some concern at what impact to golf these younger golfers pulling out of country clubs will have to the overall golf economy.
There are other answers to the private golf club, country club’s revenue woes that would work better. What do you think would work?
Let me know how I can help.
