Choosing the best management for your club or golf course can be a challenge. There are large firms, mid-size firms, small firms, individuals and everything in between. In some cases, the golf professional or golf course superintendent manages the club or facility. There are even instances where management by committee exists. Of the management firms, some have a focus on private clubs while others favor daily-fee facilities. Some are more experienced with resort and semi-private courses. Some management firms are more regionally oriented while others are more geographically diverse. There are good ones and bad ones and their fees/costs can vary considerably.
In many cases, especially with municipalities or large corporate owners, a Request for Proposals (RFP) process is employed where an RFP is developed which typically spells out in minute detail how to respond to the RFP and exactly what the assignment is.
Golf Property Analysts (GPA) has assisted several club/course ownership clients in identifying, vetting and evaluating potential management options. Since developing the RFP, soliciting proposals and ultimately selecting management and negotiating an agreement is often required in a limited time period, we recommended foregoing the RFP process, not only because it’s time-consuming but also because it’s arduous for the vendor to respond in a situation where their chances of success could be minute given the number of potential bidders and you don’t get their approach to the assignment. We typically recommend identifying no more than 5-10 firms to invite proposals from, all reputable and well-known to us, but more importantly whose management portfolio and/or experience is consistent with the goals of the client.
Once the group of potential options are identified, asking those firms or individuals to submit proposals with their approach to the assignment and provides more insight as to how they envision the future of the club rather than distinguishing proposals largely by pricing on an assignment defined exclusively by the client.
For any club, public or private, defining the club’s culture is the first step toward identifying those most capable of providing effective management. Among the questions that need to be asked and answered about the club – with objective and realistic answers are:
- What is the club’s financial profile? (entrance fee, dues level, revenues/expenses, F & B operation)
- Do golfers/members take “ownership” in the club or are they more like “customers”? (this applies to daily-fee as well)
- How busy is the club? (# of rounds, events, etc.)
- Is there a dress code? What is it?
- Are jackets required for dinner?
- Are golfers predominantly walkers or cart riders?
- Are there caddies?
- What are the golf course conditioning standards?
- Is there an extensive golf practice facility?
- Is there a high percentage of female golfers/members?
- How ethnically diverse are the members/patrons?
- What is the average age of members/patrons?
Once a club’s culture is defined matching potential managers or management companies can be narrowed to those most experienced with similar facilities. Depending on the client’s goals, we begin to consider whether individual GM candidates or a multi-course management firm is best suited to the assignment. Some of the issues to be considered are cost, desired involvement of ownership/membership in day to day operations, access to buying advantages and in-house expertise.
The large management firm will have a fee, in addition to GM and other management salaries. They’ll seek to offset that fee through purchasing advantages, marketing and membership development expertise and economies of scale to provide a club an appropriate return on investment. These firms also offer access to labor and expertise in a variety of areas (i.e. agronomy, F & B) that can be helpful in solving problems that may arise.
The qualified individual GM candidate is likely to be experienced in most or all of these issues, and may bring to the table experience with one of the major management firms. He/she is more likely to become part of the club “family” during their tenure and develop a closer relationship with ownership/membership/leadership.
Since all clubs and golf facilities are different, it’s impossible to say whether the individual GM model or management company model is “better”. It depends on the culture of the club, that club’s specific characteristics and challenges and the desire of ownership/leadership to be involved in daily operations.
At many private membership clubs there is often a tendency on the part of leadership to “micro-manage” where club leaders (the amateurs) too often dictate to management (the professionals) how to do their jobs. I have seen this lead to the failure of some clubs and distress at others. Where this occurs, whether using the individual GM model or the management firm model it is imperative that these clubs elect to have strong management enabling a decision making process that emphasizes best practices for the club as opposed to the personal agendas of club leaders. At investor-owned facilities, both private and daily-fee, especially when ownership is either absentee or possibly focused on other activities, strong management is equally critical to the long term success and stability of the club.