It is always difficult to look into the future, and trying to prognosticate where private clubs will be is even more challenging. The best way to approach this is to pay attention to the primary trends in society, and then to forecast how private clubs will adjust and embrace these trends. All organizations (be they social, business or recreational) must adjust to the society they serve or phase out of existence. Private clubs have actually done well in changing with the society they serve as male-oriented business clubs opened to women as they entered the work force. Golf-oriented clubs founded by men have for the most part been converted into family-oriented country clubs.
The rebirth of many downtown areas in major cities has caused the traditional city club to be transformed into urban recreation and social clubs.
As an industry, private clubs are able to adjust to the society they serve. Looking at the major trends occurring, generational changes in attitudes and values are seen in several key areas:
Families
The family unit is now generally composed of two working adults with much fewer children. The roles men and women have in the household are more interchangeable than ever before in order to handle their active and busy families. As such, they have less free time to enjoy social and recreational activities at private clubs—unless it fits their lifestyles.
Diversity
The U.S. has longtime been considered a melting pot, but the claim has never been more true as it is today. In the South and West, the Hispanic population is becoming the majority in states such as California. According to the U.S. Census Bureau, more than half of children below age five are minorities. Clubs have been mindful of these demographic trends and should place a greater emphasis on appealing to a more diverse population.
Wellness
Health and wellness trends are affecting all aspects of life from dining, recreation, health care, social interaction and “vices” like smoking and alcohol consumption. It seems that all life activities are being viewed through the looking glass of health.
Eco-friendly
As we read in the macro perspective, Americans are placing a greater emphasis on protecting the environment. World leaders including the president and the pope have drawn our attention to environmental issues such as global warming. As such, clubs should look to be active in promoting environmental issues with recycling, energy conservation and being a good global citizen.
Technology
Trends in technology affect every aspect of life today, and clubs must find ways to embrace them from ways to improve communications with and among members to using technology to run more efficient operations. There is no way to know where technology will lead us, but staying abreast of it and learning to harness its power will be essential for clubs.
Casual Lifestyle
The casual lifestyle trends in society are not going to disappear. Clubs should find ways to accept them. Clubs will look back on banned denim and cargo pants with a smile for the efforts of the older generation trying to control the younger ones. This goes back to the very mission of a club. If a club wants to serve families in a formal, special occasions lifestyle; then a strict dress code is fine. But if a club wants to encourage everyday usage and enjoyment by its members, it has to allow members and their families to dress as they do in their everyday life. Roughly 83 percent of clubs surveyed by McMahon Group allow denim clothing at least in some spaces in their clubhouses. Some of the most socially prominent clubs allow denim in casual dining areas to the displeasure of many older members. And yet, it is important to note that “youth will be served” regardless. Youth is every club’s future, and woe to a club that ignores this.
Golf
The trends affecting the two important offerings of golf and dining in country clubs today are critical in attracting and retaining members and their usage of clubs. While golf used to be the most important reason members (primarily men) joined clubs prior to 2011, today golf is roughly the fifth most important reason for joining cited by members over the last five years. A major explanation for this change in preference is that members today (both men and women) have less time available to play golf. Historically, women have played golf less than men, but as clubs offer more programming and amenities that appeal to today’s family-oriented and time-constrained member, golf has more competition. Clubs cannot ignore this significant shifting trend if they want to attract the future generation of members.
Dining
As for dining trends and how they affecting club dining, more variety and quality than just the traditional mixed grill and formal dining room are being served up by clubs. Competition from the outside restaurant world’s theme dining areas such as chop houses, Italian bistros, outdoor cafes, Starbucks-type coffee houses and trendy bar/lounges are being replicated in club dining spaces. Most members want club dining to be “one of their favorite places to dine,” not necessarily the best place with gourmet food. And while consistent food quality and service is surely good; other tangible factors like convenient location, friends are always there, and personalized service with name recognition also contribute to club dining success.
Labor Costs
The financial reality of providing high quality service in clubs is pointing to trends of rising costs as labor rules and health care costs continue to escalate. Increased legislative, regulatory and judicial decisions to enact higher wages, expanded health care benefits for employees and more restrictions on employing foreign workers significantly raise cost factors for clubs At a time when existing and potential members’ incomes are stagnating and being devalued by rising real inflation, the increasing cost of labor and related costs can put club membership out of reach for many middle class families.
WHERE PRIVATE CLUBS ARE GOING
The above trends seem to point to clubs doing the following:
Clubs are broadening their mission of service to all family members as well as to single adults. And they are doing this with year-round offerings so these clubs can be the primary social and recreation center for their members. The clubs of the future need to be one-stop shops with activities that can be enjoyed throughout the year by all family members and adults. The costs associated with having multiple clubs for golf, tennis, swimming, fitness, dining, parties, beach, etc., will become staggering. Thus the country club that transforms itself into the year-round club with up to twice the existing membership size will prosper as the best value in the market place. An example of this is the progressive Wellesley Country Club in Boston with its large membership, extensive year-round facilities and ever-expanding membership.
For the urban club of the future, the recreation and social club will require enough space to support a good summer outdoor and year-round recreation program with social activities in the non-summer seasons. Such a club in a city with a good residential core of people will prosper as seen with clubs like the Saddle and Cycle, Racquet Club, Chicago Yacht, East Bank and Woman’s Athletic Club in Chicago.
The case for the traditional, multi-store athletic/business club in central business districts is more difficult to forecast. Those clubs that exist today may be in a more precarious position. And yet this club type in New York and other major cities succeeds with the Soho House City Club concept.
The Union League in Philadelphia completely restructured its city club offering to even offer a distant golf program, and the success is overwhelming. But there are other city clubs in less affluent areas that aggressively market themselves to attract members or are attempting to merge with suburban country clubs. Again, the success of city clubs is very much dependent on the financial and residential strength of their city’s immediate surroundings. A significant factor in city club success is its ability to be more than just a business club and its ability to serve all age groups and their families. In the article on page XX, “The Re-Birth of City Clubs,” city clubs must invest and evolve to better position themselves in today’s world.
Clubs will have to improve their efficiency, but not at the expense of less quality to remain affordable to more people. The truly wealthy will always be able to afford private clubs, but their limited number will not be able to support the many clubs we have today. The long-range direction of the club industry is very much tied to the generation of wealth by our citizens. With increased taxation and a recovering economy, the available disposable income for current and prospective members may shrink. It is possible that more 500-600-member country clubs will merge to realize savings that will not affect quality. Many private country clubs at the low-end of the economic scale have already closed. In the future, the consolidation of clubs will begin to affect mid-level country clubs nationwide. Such consolidations into larger membership clubs actually improve members’ overall satisfaction and value received ratings for these larger clubs, as shown in McMahon Group’s survey research where the larger the membership, the more satisfied are the members.
Population trends in the nation indicate that the new movement of people is from suburbia to the urban cores in our cities. When this happens, as it has in Chicago, the country clubs are distant and the city clubs are convenient for use. This shifting of population in Chicago has many non-golf, urban clubs in heavy demand and country/golf clubs looking for members. This factor is becoming especially evident as the Baby Boomer group moves into retirement.
THE FUTURE
The future of private clubs is what they make it. Clubs have to provide real value in membership, to strive for “very satisfied” members, not just “satisfied” members, and to embrace the trends in society as leaders, not followers.
We are optimistic about the private club world even as challenges surround us. This is because we see change happening in private clubs that are attracting member usage and new members. The most challenging issue for clubs today is the tug-of-war between changing and staying the same. As many clubs prefer to remain with the programs and customs that have brought them to where they are today, they should consider the consequences of avoiding change. Clubs that promote change while keeping their culture will have the best opportunity to recruit and retain the next generation of members.
Club Trends Winter 2016