Are Country Clubs Fading Away?

A recent article by Kelsey Lawrence sent to me by a friend (Why Won’t Millennials Join Country Clubs?) raises a much bigger question:  Are Country Clubs Fading Away?  As anyone who may have read my blog from January 30th of this year or May 5, 2017 might notice, I’m concerned about where golf is headed, especially private golf which in my opinion has a culture problem.

When a country club closes it wipes out relationships, memories and economically, jobs in the community which are not easily replaced.  The culture problem relating to club rules that Millennials perceive as onerous and a lack of racial and gender diversity at many clubs is of great concern to the industry.  Even with clubs disappearing, revenue at clubs is not growing much.  Will private country clubs become the shopping malls of the next generation.  We know that some malls have been replaced by the internet.  Golf at private clubs could be replaced by a variety of outdoor activities that offer lower entry cost, more diversity and broader access.

To be fair, many clubs have improved their performance over post-recession times and are preparing for a more competitive environment by investing in their facilities.  In many cases, these clubs take on debt that creates risk when (not if) the next recession comes along.

Tradition is a big part of many of the older, more successful clubs.  Often, club leadership resists evolution and progress in favor of these traditions.  It would be interesting to find out how many clubs still hold annual, formal balls and how well they are attended.  With many clubs focusing on being family friendly,  dress codes are being relaxed, some rules are being eliminated and more areas of the club welcome the kids.  Some clubs even offer childcare as part of the program and have designated facilities for same.  In many cases, the older, more traditional, member-owned clubs are those that have preserved things like cell phone bans and dress codes while newer clubs and investor-owned clubs have become broader in their appeal by relaxing many of those rules.

Will country clubs fade away?  My guess is that there will continue to be consolidation in the industry.  Clubs will continue to close, some member-owned clubs will be purchased by management firms and some clubs will open to the public, at least partially.  This will mean that more than ever private clubs will need to offer value in membership.  For the most part, gone are the days when folks join private clubs for the prestige or business entertainment.  In some circles, especially among millennials, joining a private club is viewed negatively and there are numerous other ways to achieve social goals or conduct business, most of which are less costly.  Furthermore, in many areas premium daily-fee golf exists that provides a platform for upscale golf to serve those needs.

What private country clubs do offer that few of the options provide is the socialization on a regular basis that doesn’t exist at most of the alternatives.  Is this enough to eventually lure back millennials?  According to the Lawrence article, people are joining clubs later in life.  Is there a reason for those who are casual or occasional golfers (or participants in the other typical club sports) to join the club that is compelling enough to make the investment?  I’ve observed that some (currently) successful clubs often seem to feel an aura of invincibility.  They think they’re “bulletproof”.  Those are the clubs where leadership, seeking to preserve tradition, often implements policies and procedures that many members find objectionable.  These clubs usually offer excellent facilities, proud history and have been recognized for their excellence by outside observers.  The question ultimately gets to whether the members are happy and how much an economic downturn might affect the club.  There is no one answer for all clubs but every club should evaluate their risks of decline annually.

Are country clubs fading away?  I suppose it depends on whom you ask.  As long as the number of clubs and club members declines, the technical answer is yes.  Are they likely to disappear?  No.