As well-to-do members of society start to feel the effects of the recession, the country club membership is one of the first perks to go. Unfortunately, this is kind of a problem for the clubs themselves, which now face having to open themselves up to non-members (shudder!) in order to keep revenues flowing.
Egads, just close your eyes and think of England!
WSJ: …It used to be that belonging to a private club was the pinnacle of achievement. If you made partner or were promoted to vice president, joining “the club” was a perk. In small or medium-size cities, club dining was often the best in town, the spa was the only one around and there were no premium daily-fee golf options. My late father-in-law, a doctor in Ohio, played golf every Thursday afternoon and hung out at his club big parts of Saturday and Sunday.
Now doctors a.) can’t afford clubs and b.) are too busy filling out HMO paperwork that they don’t have time!
That model still holds for particular clubs in particular places for particular people, like well-off retirees. But for the younger generation of club members, things are different. Neither spouse in a two-income family with children has the time or inclination to while away weekends at the club. When I asked Doug Steffen, the director of golf at Baltusrol in Springfield, N.J., to describe the biggest change in club life during his 13-year tenure there, he said, “That’s easy to answer. The club used to be the focal point of social life for our members, but now it’s just one among many other activities they are involved with.”
Et tu, Baltusrol??
More people are lining up to get out of private clubs these days than are lining up to get in, or so it seems. Many of the 4,400 private golf and country clubs in the U.S. are doing just fine, but one can sure get the impression that the situation is universally dire from listening to club managers and golf-industry consultants discuss the state of clubs in today’s economy…
At most clubs at least one newcomer has to join before a current member can cash in his bond, deposit or other type of equity stake and quit. If the annual dues are $7,500 and the equity stake is $20,000, most members will be inclined to stay put until a new member signs up. But if annual dues are high — say, $12,000 or $15,000 — and the projected clearing time on the resignation list is four years (not uncommon in this economy), some financially strapped members will choose to bail immediately.
Clubs don’t like that because dues and the additional spending of an active member are more important than $20,000 in the bank. That is particularly true for the many clubs these days that are servicing big debt loads piled up in better times for multimillion-dollar course renovations or clubhouse expansions, and for new clubs, some in stalled real-estate developments, that haven’t yet reached their full quota of members…
Cutting budgets by 20% to 30% is sometimes necessary and possible, but can also be disruptive. “It’s a whole new world for these clubs,” said Bob Mulcahy, the CEO of AMF Golf Management, a New Jersey firm that advises clubs and club pros on best practices.
Ok deep breath, here it comes…
For clubs unable to adapt in their current form, the next step is often allowing paid play by outsiders at off-hours — that is, becoming semipublic — and after that full conversion to a public facility. At that point clubs often look for ways to sell off the property to housing developers or for other uses, giving equity members a windfall, but zoning laws make this impossible in all but about one in 10 cases, according to the National Golf Foundation study. Each conversion of a private club to a daily-fee course, usually a high-end one, gives would-be club members in that area one fewer reason to make the expensive, long-term commitment to join a club, and the cycle propagates itself.