Is Golf Still King of the Club?

I read with great interest this morning the “Point/CounterPoint” article in “Club Director” Magazine by Dan Denehy and Bob James on the relative importance of golf at country clubs.

In the piece, James maintains that golf is what saved clubs this year from (in some cases) extinction and is “the most important aspect of a golf club.” Conversely, Denehy contends that “excellent food and beverage programming is essential to the club experience.”

Both have a point.

In this crazy year of 2020, there’s no doubt that golf has been the (sole) engine driving the bus at many clubs. Play has increased dramatically and membership has grown at many clubs, fueled by the remote, stay at home work result of the COVID pandemic. F & B, on the other hand has suffered as limited offerings of space and or take-out and the absence of high revenue events has generally diminished the overall revenues of many clubs, despite increased play and membership.

Compounding this question is the issue of whether the spike in golf participation is sustainable. How many of these additional rounds are being played by existing golfers simply playing more frequently while they’re not in the office and how many are actual new golfers?

From a cost perspective, additional rounds adds minimal cost to the club’s expense line. Most of the maintenance and golf staffing costs are relatively fixed. Thus, golf is more profitable beyond the critical mass. Conversely, while not an insignificant impact, reduced F & B revenues can at least somewhat be managed by reductions in staffing and hours of operation, though many clubs have strived to keep on employees and provide services to members.

In order to answer the question of whether golf is still the king, one has to look back at those years when clubs struggled due not to a 100-year pandemic but rather normal economic fluctuations. Many members resigned club memberships during those periods and not only did F & B revenues decline but membership and golf revenues, which support the fixed expenses of management, real estate taxes, debt service and maintenance stressed those budgets as well. F & B at least had the chance to recover some lost revenues in those instances where weddings, Bar Mitzvahs and other functions and events supplemented those revenues.

I had a friend at a club I used to belong to who always complained when the club invested in anything inside the clubhouse. He was there for golf and that was his singular focus. Conversely, at the same club (now no longer in existence) many members either declined their use or left the club as the F & B became diminished in quality and service.

The bottom line is that at clubs with a significant F & B component there are members there for the food and members there for the golf and other sports. Most clubs need both, the balance of which depends on the culture of the club. Some golf and sports centric clubs see F & B as a necessary evil. Other clubs see F & B as their strength and focus.

For the clubs more focused on golf and sports, Bob is right. For the F & B focused clubs, Dan is right. The point here is that each and every club has a culture and no two are exactly alike.