BALANCE – Does Your Club Have it?

One of the most important things in golf (and in life) is good balance.  It is nearly impossible to hit good golf shots when unbalanced, we all try to eat balanced diets and hopefully our personal relationships have the balance that allows both partners to thrive.

Much like our political environment, I often see clubs that lack balance in their policies and planning.  Simply put, some spend too little and some not enough.

There are the clubs that (often financially struggling) fail to have forward vision, neglect the establishment of reserves and capital improvement planning and try to plod along maintaining membership by reducing or eliminating entrance fees and keeping dues at artificially low levels.  Sometimes they offer “deals” to new members, believing that simply adding members will solve the problem.  Unfortunately, many members leave.  All while club facilities decline and erode.  These clubs with high turnover see their members opt for competing clubs or alternative sources of recreation.

At the opposite end of the spectrum are those (often more upscale) clubs which sometimes can’t seem to spend enough.  Everyone takes pride in their club.  We all want ours to be the best.  Economics don’t always support that.  Despite the best intentions of club leadership, it’s not unusual for clubs to embark on costly projects with great “sex appeal” and incur debt.  Then a recession comes and membership declines leaving the club with an operating deficit and limited (if any) cash to service the debt.  Of course, there are clubs in a position to simply assess the membership and avoid debt.  These are the exception.

Some years ago, I was a member at a club that consistently declined to address deferred maintenance or make any improvements.  Leadership focused exclusively on cost at the expense of quality.  The club became less desirable, membership declined and it ultimately failed. The property is now being developed.  Another club we appraised declined to address a variety of clubhouse issues.  That club is still operating but under private ownership that purchased for a song and has made capital investment.  The investment will be paid for by selling off land where 9 of the 36 holes are situated.

The more upscale clubs can have a tendency to think they’re “bulletproof”.  One only needs to look back to the most recent recession to find clubs that prove that not to be true.  Even during the recent period of economic expansion golf courses and clubs have continued to close and many private clubs have been acquired from memberships by investors.  It’s possible the next recession will bring more closures and failures of member-owned clubs.

Balance is the key.  Yes, clubs need to consider economics but also member satisfaction.  A club has to provide value for the cost, but that doesn’t mean it should simply be the cheapest.  Conversely, if a club has more facilities than the membership is willing to pay for, it’ll be too expensive and also not of good value.  Neither the cheapest or the most elaborate provide the value today’s club members seek.  The clubs that understand and continue to provide value in membership will survive, and probably thrive.

The “playbook” for each club is different.  The club’s facilities, location, membership and competition all contribute to formulating a plan that will result in maximum success.  No two clubs are the same.  Call us to learn more