Wednesday, December 2, 2009

Private Golf Vitality

By Michael Vogt, CGCS
What Can Be Done
How interested are you in saving the vitality of your club? Do you think the present day economy will right itself and all things will return to 2004?

Even semi expert management of golf clubs during golf’s golden years kept members happy and sustained sufficient membership numbers to pay the bills. We all remember the day when members waited in line, cash in hand to become a chosen brother of the private club. 5,200 private clubs in the USA in 1990 compared to 4,700 clubs today, and it’s said that a full 20% might be heading for some type of financial difficulties in the days to come.

Top tier clubs have very little to be concerned with, these clubs still enjoy a very stable membership and have the resources to make decisions as the leadership sees fit. The clubs that fall below the top 10% are the clubs that apparently are struggling with capital funding, payroll and even supply purchases during the difficult spring season lag between winter and full play (income) season.

If your team is busy with recession strategies and where and how to economize I would suggest you call in experts that can guide your business though the next few years. Clubs that emerge from this perfect economic storm will become leaner, understand their memberships needs and continue to offer the great service that great clubs have been offering their members for years.

We Can’t Save the Club into Prosperity
We know in business you can’t save yourself into success, simple cuts in payroll and goods will not produce the needed results in the private club world. How many clubs must we witness falling into the death spiral before our collective group of managers and club leaders comes to realize our club is next? The National Golf Foundation has reported that since 2000 golfer participation has fallen off by 16% across the board. I feel we need to stop blaming the lack of time on golf’s loss of participation. Granted, in this day and age we have many choices to make when it comes to leisure time, is four or five hours over the top when it comes to a round of golf; I think not. Golf has just gotten to expensive, period.

I of all people know what it costs to prepare a golf course for play each day. The math is this:

300 members, $950,000 annual operation / maintenance budget = $3,166.00 per member

Loose 50 Members

250 members, $950,000 annual operation / maintenance budget = $3,800.00 per member

That’s just operation of the golf course, not funding depreciation (building and equipment), not accounting for overhead in the clubhouse, losses in F&B, golf car lease expense, and taxes and insurance. In addition the golf shop payroll is never paid for by sales in the golf shop. $263.98 per member per month just to maintain the golf course! Or, if the club does 10,000 rounds, that's $95.00 per round before any other expenses.

Family Friendly
The reason for golf and golf club’s utilization fall – off has many folds. One that gets the most attention is other family functions. While this may be true a family focused club environment has been proven as a hedge against dwindling utilization. When a club can realign it’s demographics to attract a younger average membership and cater to the up and comers the clubs chance for survival increases dramatically.

Fitness facilities are becoming the most requested addition to club renovations. Children’s programs are fast becoming the glue that cements the golf operation together, and family golf programs are sure bets for attacking increase club use. Savvy golf professionals have discovered that untapped market of family instruction, play and competition at clubs can increase use in all aspects of the clubs business.

The safest and most accurate way to find out what makes your club tick is a comprehensive survey of the membership. Only a well executed survey will reveal what the clubs membership really is looking for in your social offerings and facilities.

In summary:
• Poor performing clubs will not survive,

• Clubs today are not and should not be your fathers clubs,

• Family focused offerings will increase revenues, participation and satisfaction,

• Cutting expenses will not fend off disaster; only postpone it,

• Only the finest clubs with a clear mission and vision will thrive in down economies,

• Experts in the club business have the knowledge, ability and proven techniques to help design a clear path through this poor economy.

From golf course maintenance to a reinvention of the club; now is not the time to save your club into bankruptcy. Making bold, well informed changes will increase membership loyalty and utilization, leading to a vibrant club with members for life.

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