The 2014 NCA National Club Conference proved to be a tremendous success with industry leaders from around the country convening in San Francisco last month to provide the latest club trends and best practices. In case you missed the event, here are some of the highlights of the education sessions.
Club Trends
The first track of the conference programming discussed present and future economic, member and club trends. Ken Fisher, chairman and CEO of Fisher Investments, noted that the economy is improving and the country is returning to a stable state—banks are not lending aggressively, inflation remains tame and employment is returning to normal levels. Also, the corporate tax rate, due to pressure from low-tax countries, will likely remain the same or decline. These signs indicate a more fruitful economic outlook than in recent years.
As the country’s demographics change—more individuals are staying single longer, baby boomers are aging, urbanization and others—it is important for clubs to take note and make appropriate accommodations. Frank Vain, president of the McMahon Group, highlighted key findings of NCA’s trends research looking at the member of the future. One critical trend is the rise of experiential luxury and what it means for private clubs. Successful clubs will respond to this by creating a lifestyle club with high quality, next generation facilities and interesting experiences, not relying solely on history and tradition. He also suggested that clubs should stay up to date on food trends and focus on family and fitness. Further, although it is important to provide a luxury experience to the next generation of club members, keep in mind that these individuals also enjoy a casual, open feel to their experiences. These qualities resonate with values that present and future club goers hold.
Trends in golf data reveal a steady decline in golf participation rates in recent years, reported Greg Nathan, senior vice president of the National Golf Foundation. He noted that the market adjustment in supply and demand since 2008 has resulted in 48 new club openings, 57 conversions from public to private status, 78 closures of private golf clubs and 411 clubs that converted to public status. NGF research in 2014 also showed that the overall financial health of private golf clubs is improving, when compared to data provided in 2008. Golf clubs rating themselves as “financially healthy” rose from 22 percent of the total in 2008 to 29 percent in 2014, those who see themselves as only “moderately healthy” dropped from 57 percent in 2008 to 54 percent in 2014, and those clubs that perceive themselves to be “at risk financially” declined from 21 to 17 percent. The NGF report also focused on the importance of targeting the 18-34 age group, since they represent 28 percent of all golfers, are at the age when most people take up the game, and are historically the group with the highest participation rate. Successful initiatives to grow golf participation in that age category include ways to create perceived value and efforts to make the game fun—recognizing that, despite golf’s traditions, it is critical to be innovative to appeal to new golfers.
In the final session of the trends track, a panel of industry experts led a thought-provoking discussion on club outsourcing to use partners to handle everything from HR and IT services to golf course maintenance and fitness. The topic itself can cause tension among staff, who may view hiring an outside vendor as a reflection of their capabilities, which makes researching the right consultants and identifying tangible results crucial to outsourcing’s success. The benefits of an effective outsourcing initiative not only help keep a club running efficiently, but also solve problems and builds relationships.
Legal & Legislative Issues
The second track addressed legal and legislative matters affecting private clubs. For all private clubs, maintaining their private and tax-exempt status is at the forefront of activities. Therefore, those in the club community should have a thorough understanding of how those differ and what it takes to maintain them. Robyn Stowell of Stinson Leonard Street and Dan Condon of Condon O’Meara McGinty & Donnelly discussed the “dos and don’ts” for private and tax-exempt clubs, such as maintaining exclusivity in the membership admission process, limiting access to facilities to members only, keeping “non-traditional” activities (holiday sales, food-to-go, etc.) to an acceptable standard and other best practices. Other areas that should be carefully examined by clubs that wish to protect their private status include their guest policies, their website and the frequency of tournaments that are open to the public.
The Affordable Care Act, the National Labor Relations Board, immigration laws and others all create legal nightmares for clubs. Although these issues have made club operations more cumbersome and expensive, members of NCA’s Government Relations Committee covered how clubs are responding to them and their impact on the industry, such as offering clubs the ability to avoid the January 1 Employer Mandate penalty in certain instances by proving the club had a non-calendar year plan on December 27, 2012, and from that date on, it did not change the plan’s start date to begin at a later time. Overall, the discussion highlighted the importance for clubs to be prepared to react to public policy changes, as regulations can affect the entirety of the club industry.
Club Governance
The conference’s final track of programs involved strategic best practices for private club governance. Henry DeLozier analyzed the impact of having a strong strategy and culture. General managers and club leaders must go beyond merely “planning” and be perceptive to different points of view, seeking alignment, not necessarily consensus. Keeping this flexibility and openness allows for clubs to adhere to strategy while remaining nimble when problems arise.
The conference concluded with a panel discussion moderated by Joe Perdue of Global Hospitality Initiatives, Georgia State University, examining ways to create harmony between the club GM and the board of directors and establish effective relationships and successful collaboration. Panelists noted that keeping responsibilities well defined and balanced is key. Leadership must also be upfront and honest with one another and the general manager must gain the board’s trust. These strategies help build respect for each other’s points of view and maintain a positive dynamic that is essential for a club’s overall success.
The National Club Conference provided a great forum for club leaders and their board directors to hear from a wide range of experts about important industry issues, and an opportunity to network with key decision makers in the private club world. The 12th annual NCA National Club Conference will be held in Washington D.C., in 2015.