Private clubs prosper in markets characterized by high consumer confidence, growing household income, steady employment statistics and concentrations of high educational attainment. To optimize your market analysis, look for data that demonstrate the strength of these characteristics in your draw area. Most clubs have a 20- to 25-minute drive-time draw area. If you find that these characteristics are strong or surging—as opposed to declining—in your draw area, you are in a growth market. Knowing what information is needed and for what geographic region, you can better evaluate price elasticity for joining fees and dues. Since 2014 most major market areas show favorable trends for private clubs.
Market analysis is far more than a competitive analysis of knowing what comparable and competitive clubs are charging; nonetheless, it is important to know your competitive landscape. You should know the initiation fees, monthly dues and capital dues of comparable clubs. You should know how each is trending on the same metrics. Few clubs enjoy such competitive advantage that they can disregard market pricing ranges; still, top-performing clubs may expect more price elasticity while clubs with substantial deferred capital investment, care and upkeep must be cautious. Clubs able to sustain even modest capital improvements enjoy competitive market advantage over those clubs that have not reinvested in assets.
Many clubs miss opportunities to increase fees and dues because they lack current market intelligence that supports data-driven decision making. The most cost-effective resource for baseline market statistics is the U.S. Census Bureau (census.gov) from which you can pull the key trends for your market area. This need suggests that you must use multiple data points, such as the trends for these measures over the past three years. Are these key markers trending favorably or unfavorably for your club? Established and highly reliable market research firms provide in-depth market data for a fee, which is a good investment for future success.
Michael Gregory ([email protected]) is a senior manager at Global Golf Advisors, a Toronto-based private club consulting firm.