Health of Country Clubs

**bcp** · October 29, 2008

I am interested in getting various opinions on the state of Country Clubs in the present economy. It is obvious that when people are being crunched financially, the luxuries are cut.

I belong to a private club in NC and we appear to fairing OK as of now, but I wonder because we have a lot of bankers, investment guys, etc. as members. The club is in good financial shape to withstand the long haul, but we are not where we would like to be with membership numbers. We do have a lot of older members who are no longer in the work force, but are likely impacted by the markets.

**Rugger** · October 29, 2008

I am interested in getting various opinions on the state of Country Clubs in the present economy. It is obvious that when people are being crunched financially, the luxuries are cut.

I think like in every market, there will be swings. As you mentioned a lot of guys who are in financials might cut the membership just to be safe, but there are still lots of other industries mostly unaffected. Health services, law, higher education, manufacturing, agriculture etc.

Things might take a dip but they'll be alright.

**case31** · October 29, 2008

Clubs are definitely being hit hard, but this isn't a new development. The "social club" mentality that clubs have thrived on for years has been in steady decline. I have been hesitant to join some of the more upscale clubs in my area because of the food and beverage minimums...I know I wouldn't meet them, thus throwing money away. Some of the nice clubs in the area charge fees in the range of $400/month and up. That's fairly reasonable. But when they tack on $100+ in food and beverage minimums, plus assessment fees, now it's getting out of my price range. As much as I play golf, I can't spend $125 a month in beer, gatorade, and hot dogs (as hard as I try sometimes). Your hint at the lack of younger members at clubs is a result of the initiation fees. Back in the day, being able to afford a nice club was a social symbol. Now, it's a cost of doing business. My main motivation to join any country club is the convenience (being able to walk in and play any time) and what I call "replay-ability" (finding a nice, challenging course that's fun to play over and over again).

**iQuest Golfer** · October 29, 2008

You have to wait for the end of thet year to see the fall off of memberships. For my club, you are responsible for your yearly dues no matter when you bail. I suspect that there will be a thinning during the first quarter of 2009.

case31 nailed it. F&B; minimums is a PITA. Many times I have called up the club chef to pack up sirloins and salmon on the last day of the quarter to salvage my bill. I'm not a big eater during a round or a drinker after; so, I tend to forget and leave money in their pockets.

My main motivation for the country club is the convenience and the two challenging course that are great fun to play... over and over again.

**JessN16** · October 30, 2008

Where I live, the number of private clubs has shrunk to three from about three times as many about 20 years ago. My old home club has gone semi-private.

The problems with a lot of country clubs are myriad: Many are older golf courses, designed prior to the advent of modern course design techniques, and quite frankly just aren't that good. So if you amortize $400/month across the number of times you're likely to play in a month, you're talking about $100/round and that's if you get good weather; otherwise, it jumps to $133, then $200, etc. And at many places, that doesn't include a rental cart. The ones that do offer modern golf are typically so expensive that only the elite can join.

The "social status" part of it is now being looked down upon in many circles. Now, you run the risk of being viewed as a snob as much as reaping any benefit from it.

Unless you really need it for your business, or the golf is just so great you can't get it anywhere else, I can understand people not joining. Don't get me wrong, I hate to see country clubs hurting, because it's certainly a romantic part of the game. But except for the elite-level clubs, most will be gone or semi-private very soon, IMO.

Jess

**BigAl5150** · October 30, 2008

I am not a member of a country club but by reading various golf business publications for Bag Drop articles, I've noticed that there is definitely some worry for country clubs for the reasons already mentioned. I also think that fact that parents today spend a lot of time lugging their kids around to a myriad of extracurricular activities cuts down the amount of free time one could spend at a country club for golfing and other social activities.

However, if you want to join a country club, now is a great time as initiation fees are being reduced (or waived in some cases) and monthly fees are being reduced or more service added as they are attempting to gain new members.

**tm22721** · October 30, 2008

We are going thru the same deflation as Japan started in 1990 and is still experiencing. For them, cash is king as it is becoming here. Due to crushing levels of debt everywhere I would not expect recovery for several decades.

As happened in Japan, most will not survive due to underwater mortgages and overcapacity.

**case31** · October 30, 2008

The problems with a lot of country clubs are myriad: Many are older golf courses, designed prior to the advent of modern course design techniques, and quite frankly just aren't that good. So if you amortize $400/month across the number of times you're likely to play in a month, you're talking about $100/round and that's if you get good weather; otherwise, it jumps to $133, then $200, etc. And at many places, that doesn't include a rental cart. The ones that do offer modern golf are typically so expensive that only the elite can join.

I understand what you're saying. However, you can't look at a country club membership in terms of value. If you are single, make good money, work flexible hours, and live close to a decently priced country club (factoring in gas prices), then there is value in joining a country club. For someone who is married with kid(s) and works the typical 8-5, it's virtually impossible to join a club because of it's "value".

**Eeryck** · October 30, 2008

I understand what you're saying. However, you can't look at a country club membership in terms of value. If you are single, make good money, work flexible hours, and live close to a decently priced country club (factoring in gas prices), then there is value in joining a country club. For someone who is married with kid(s) and works the typical 8-5, it's virtually impossible to join a club because of it's "value".

I find this sort of discouraging. I was considering joining a club in 2-3 years if my son is interested in golf. My wife is starting to play and so paying for 3-6 rounds per week a club was starting to make some economic sense. As for some other points in the thread I am somewhat concerned about many of the negative thoughts held by the general public about belonging to a country club. I don't really understand why someone would join a CC if there was not economic benefit. I am still not even sure I will join one depending on how the feel is when I start to look at them. -E

**bcp** · November 4, 2008

I can only speak for myself, but I consider the value of belonging to a club on a much deeper level than number of rounds divided by cost. It has been my experience that you will never be able to justify the cost of membership if that is your criteria; however, I consider our club membership a fantastic investment because I value the following things associated with a private club: not crowded- no rounds over 4 hours; no trouble making tee times; private practice facilities; personalized service, camraderie with all members; standing golf and social groups; various dining options and social events; on site club storage, locker, and handicap service; facilities and activities for the family. While all of this comes at a cost, I consider it to be a great value for the level of service, convenience, and ameneties that I receive.

**case31** · November 4, 2008

I find this sort of discouraging. I was considering joining a club in 2-3 years if my son is interested in golf. My wife is starting to play and so paying for 3-6 rounds per week a club was starting to make some economic sense.

It's a luxury...just like anything else. As bcp mentioned, the benefits are the amenities you get

with the membership. The ability to play when you want, league play, restaurant/bar, typically better practice facilities, etc. Looking at a $5000 membership at a club that costs $100 for a round and saying, "Ok, I have to play 50 rounds to get my money's worth"...it rarely works out. As far as the perception goes, who cares? If you feel like you utilize the benefits of a country club membership, then go for it.

**tm22721** · November 4, 2008

Just saw a recent chart on the decline in Japanese memberships since 1990 when their credit bubble burst and downturn started (Japan is still in the downturn after 18 years).

Japanese memberships are down by 95%.

**wachesawgolfer** · November 4, 2008

Private country clubs are clearly expensive compared to pay as you play public courses. The value is in the people there you can play with, the quicker rounds and tee time availability. But if you do not appreciate that public courses are the way to for the dollar only. I think all industries are being hurt now and country clubs all over the country are struggling which will only get worse.

**Eeryck** · November 4, 2008

For having a short warm weather (May-Oct) golfing season the Milwaukee metro area has a ton of nice courses so it is not too bad to get a tee time a day in advance and typically pace of play is pretty good 3.5-4.5 hours if you get an early start.

Cold weather golf (Nov-Apr) you have your pick and can play as fast as you can hit.

I guess I will have to tour some clubs and see what they are selling and then decide if I want to pay for the "luxury", "camaradire" or "social activities". I think I will hold out a bit longer though to see what happens to the market. Would hate to pay an initiation fee only to have the club go belly up shortly after.

I suppose I could always attempt to get into one of the more prestegious clubs in the area. Though, I am pretty sure I don't have the contacts or the money to join the top end clubs here.

-E

**bcp** · November 4, 2008

For having a short warm weather (May-Oct) golfing season the Milwaukee metro area has a ton of nice courses so it is not too bad to get a tee time a day in advance and typically pace of play is pretty good 3.5-4.5 hours if you get an early start.

I think you have exactly the right idea- tour the clubs and have them give you the sales pitch. Figure out what is available and what exactly it is that you are looking for. It is very much a buyer's market right now and most clubs are going to jump through hoops to lure new members.

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