I am asked almost every day what I feel is the hinge pin that keeps the golf economy going. I do not hesitate to say…Country Clubs, private or semi-private, play a huge part in golf’s overall survivability of this current recession. Oh, of course, even if the worst happens there will always be some form of golf played somewhere. However, the question would then become…why bother?
The middle of the spectrum of the golf economy has always been held up by the business golfers who have country club memberships. They are starting to leave the club’s due to the recession and the younger generations of business golfers are finding the Old School look of country clubs do not fit their lifestyle. This pullback by the next generation of country club members in any long-term interest in Country Club is resulting in a large number of country clubs to struggle in keeping enough members to pay the bills.
How real is the possibility of country club’s across the land not surviving this economy? The possibility is real and the reports being posted around the internet confirms that today’s recession is causing many country clubs to fold. Why? Country Clubs are not able to attract new members whose monthly dues would pay the costs of operations.
The report of the Shores Country Club in Rockwall and the Four Season’s Golf Resort in Las Colinas hit close to home. The bankruptcy and foreclosure of the Seven Canyons Golf Club in Sedona, AZ hit a nerve as well as a number of other foreclosures many of my followers have sent to me to study. Where and when it will stop depends on the solutions country club owners and management take. I would say they need to hurry.
Economy Leaves Golf in the Rough
Jim Fitzgerald, AP Writer, reported in his article Economy Leaves Golf in the Rough …, “Whether it’s a $45,000 initiation fee for a private club or a $5 increase in the cost of a round of golf at a public course, the price of golf is giving some duffers pause.”
In Mr. Fitzgerald’s article, he had a report from Roger Garrett, a Phoenix real estate agent who has sold more than 150 golf courses nationwide who highlighted where the problem with most country club’s stress began… “In areas of the country where golf is played year-round, many courses were built to raise the prices of new houses around them…Now, with the housing market depressed, a dozen or more golf properties in Arizona are in foreclosure or bankruptcy proceedings.”
Jim reports, “the family-owned Sea Island Co. — with a stretch of private beaches and ancient oaks in coastal southern Georgia — has also filed for federal bankruptcy protection, proposing to sell its resorts and golf courses, where presidents Coolidge, Eisenhower, and George W. Bush have been guests”.
Again, lack of membership dues and daily fee green fees are part of why many country clubs and golf facilities struggle to survive.
Deceptive Golf Club Management Doesn’t Help
Out in Arizona, where golf is a huge part of the state’s economic base, Christopher Fox Graham reports in his article, Members ‘upset’ with Seven Canyons golf club , some golf club owners are trying unsuccessfully to hold their finger in the dike that holding back the huge debt they have incurred while mismanaging the club. The inevitable filing for bankruptcy that Seven Canyons made left 254 dues-paying members high in dry after making an initial investment of between $80,000 and $175,000 (ouch!). How could this be avoided? More members!
What Caused the Problems Country Club Are Having?
Quick answer here is..Membership Evaporation is what is causing Country Clubs to start sucking air. In Jim Fitzgerald’s article Greg Schimoler of Mamaroneck, NY, said it best, “The social life kids have today is not the country club lifestyle.”
Country Clubs are struggling to attract new members..no matter what their age. Yes, the younger memberships work into many of the country club’s business plans, but as Greg said..country clubs today do not fit into kids social lifestyle. Without new members…Country Clubs, as well as a main portion of Golf, will not survive this recession.
Where Was the Boat Missed?
In today’s world, social media has taken over not only business plans but lifestyles. Business today is based on how well a business can socialize with its customers…yes, all of them. Country Clubs..as well as most of the golf..have missed the boat by not grabbing hold of using the internet to capture the golfing market.
In a recent presentation, Eddy Badrina, Chief Strategist for BuzzShift, addressed the Dallas Social Media Club, with stating, “Where is your (business) target audience listening to your narrative? Where are they most likely to participate? A business today must be where their consumer is to attract them to the product or services offered. If not, the customers are going elsewhere”. Today, the younger potential country club members are not reading magazines about private clubs, or newspaper ads. Even if they were over 90% would not believe the source. Word of mouth socializing is how today’s potential country club members gain information about things of interest. If country clubs are not in the ring of influence they are not seen as anything of interest.
In a follow-up email to Mr. Badrina he confirmed. Yes, this process of being where the consumers are ..in this case, potential younger country club members, is a must in attracting new customers..or members to the club’s membership.
Country Clubs today and golf mainstream businesses are not using the right tools to draw in new members/customers. Still, there are many things country clubs have to deal with internally…or in some cases externally, to be able to close on getting new younger members to joining their club.
After the video interview, I made recently with the young upcoming PGA Tour Professional, John Raser from Orlando, FL., I ask what draws him and his generation to consider a membership to a country club. John said, “If the club does not have a facility where I can kick back, relax, have fun before and especially after a round of golf, I have no interest in the club. I am not talking private men’s card rooms. I am talking about Clubhouses of country clubs. If the clubhouse does not have a favorable drive up appeal why would I want to be a member of that club? Older clubs with older clubhouses are going to have a hard time attracting..and then keeping..younger members.”
The bottom line for country club survival is in keeping current members while attracting new members. The problems facing country clubs are in supplying what is needed to service its membership while covering those costs without incurring debt. The message is clear on what the next generation country club member expects from their investment of funds and time into a country club. If the clubhouse is not New..if the facility is not modern,… they take their money to a country club that is new and modern.
For the real estate strapped country clubs a more drastic approach may have to be taken in reducing the investment liability in the property surrounding the course. Yes, someone will have to bite the bullet on taking a loss on the real estate investment and it is a safe bet that it will not be the members who will take the hit since they can go to another club in a heartbeat.
Country Clubs will need to face the fact they need to move into the future with a new face in order to attract new members while keeping older members.
Let’s hope the country clubs of the world do something quickly to improve their survivability. I am sure he dockets in bankruptcy courts are not filled yet and seeing more country clubs on the blocks does not help the future of GOLF.