How Many Members is the Right Number?

I am often intrigued by issues relating to the culture of a particular club.  Among the issues impacted by club culture is a club’s capacity for members, which as one might expect has a significant effect on a club’s economics.

If the culture of a club is such that members play frequently and often more than one member of the family uses the facilities simultaneously, a club’s membership capacity is limited by that activity.  Understanding how many rounds of golf (and meals and usage of other facilities) the average membership generates goes a long way toward determining the ideal number of members.

I’ve observed many clubs that have simply determined what they feel membership dues and other fees should be, based on market competition, costs or other factors and give no consideration to how many members can be accommodated based on culture.  Clubs should work backwards from the number of rounds the course can handle, based on the experience to be provided and then combine that with the culture of the club and how many rounds per membership are generated to determine the ideal number of memberships.  If the resulting cost of membership is too high, then club leadership or ownership has to determine if adding additional memberships, and the resulting additional play is worth the economic benefit of lower dues.  Conversely, if membership is willing to pay the added cost having more access (fewer members) brings, that determines the level of dues and other fees that can be charged.

Data collected from nearly 1,700 private clubs surveyed shows a wide variety.  While it varies from region to region, it shows some interesting trends.  For instance, clubs in Florida and Arizona don’t seem to do any more rounds per membership than those in say, Pennsylvania and New Jersey.  Obviously, a club with more holes can accommodate more members, but a club more oriented to family golf is likely to generate more rounds per membership than a club that is more oriented toward the serious, male, adult golfer.  However, there are family oriented clubs, often with large memberships that accommodate a limited number of rounds per membership.

As seen in the chart below, the average number of rounds per membership at the private clubs we surveyed was about 71 rounds per membership with a median of about 64.  This resulted in an average of 26,000 rounds per club and a median of 22,000 rounds.  More interesting than the averages were the extremes, which illustrate how different some clubs can be.  Clubs averaged 420 members with a median of 330, but had as many as 3,677.  Of course, clubs with more than 18 holes can accommodate more members and rounds.

The lesson to be learned here is that every club has a different capacity, and thus different economics.  When determining how many members is the right number, it’s important to understand the “culture” of your club and also how many rounds are desired and how many the course can handle.