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Opportunity Abounds: Year-round Engagement is the Answer

Demographic changes will increase the supply of people in their prime club-joining years for many years to come. Develop programs and facilities that promote year-round use to put your club in the sweet spot.

Fads come and go, while the age-related choices people make are extremely potent and enduring economic drivers. This is because we cross important milestones at around the same time, from completing our education and starting out in the workforce, to getting married and purchasing our first home, then having children and settling into a community. Age also drives the choices we make in activities and influences spending habits. We saw that when we had so many boomers in their teens in the 1960s and it was a big part of what drove the consumerism and economic expansion in the 1980s and 1990s. When the boomers became 30-somethings, they had lots of kids, which is why we now have the millennial generation.

Starting about a year ago, long-term demographic trends tilted in a positive direction for private clubs. This is based on something called the MY Ratio, which stands for Middle Age to Young Ratio, or more simply the Middle-Young Ratio. With the vanguard having birth years in the 1980s, the 80-million strong millennials are entering middle age—sorry to break it to you kids—a pattern that will hold true for the next 17 years. In addition to the life changing events noted earlier, McMahon Group survey data show one of the things people do as they enter middle age is to join a club.

Age waves are powerful forces. In fact, an underreported factor driving down the number of clubs and memberships since the turn of the century was the decline in the MY Ratio during that period. Boomers were born between 1946 and 1964, so it’s been a full decade now since they were in the sweet spot for joining a club. As they vacated this stage of life, boomers were followed by Generation X, a group only about half its size, and one that was greatly impacted by major economic disruptions like 9/11 and the Great Recession. In fact, they will likely end up being the first generation in American history to do less well than their parents. So, while it is correct to cite changing economic conditions and evolving preferences in recreational activities as major contributors to club challenges, we shouldn’t lose sight of the fact that the number of people in the target joining years continually shrank during these years, contributing in large measure to the supply-demand imbalance we’ve seen since 2000.  

Millions of people in the U.S. will turn 35 each year from now through 2035. This will have a dramatic impact on society and economics generally, (Note to self: stock markets tend to go higher during MY expansion periods also, as savings rates click higher during peak earnings years) and on private clubs. There will no doubt have to be adjustments in the club model because of proclivities, but in general, an expanding supply of potential joiners will do a lot to turn around the club world. It’s one of the major reasons as to why you see private equity money flowing into an established brand like ClubCorp and new ventures like Soho House, The Wing, The Battery and the slew of other specialty clubs that have come to market in recent years. Smart money is following the numbers.

The millennials are crossing into middle age in a different financial position than their parents did. A key factor is debt from college tuition, as the cost of education has outstripped inflation in the past 25 years, so the group is a little short on cash. It also takes more money to buy a house today, especially in the hot cities where there is strong job growth. These forces are creating a sea change in attitude among prospective club members. Once a near-equal pursuit of access to special facilities and social positioning, the decision to join or maintain a membership in a private club is increasingly a judgement on perceived value. Money is tight, even in an expanding economy, and there are lots of calls on it. If a young family has the means to join a club, it typically means both adults in the household are working, so the club must serve everyone. Finally, their diversity also means millennials are not seeking social trappings from membership. Rather, they want personal fulfillment and financial return, as they expect when supporting any business. They want fun and exercise and to grow relationships. They want to belong to something that’s important and useful. In short, they want their money’s worth.  

Value-Building Techniques

Creating a club that is a one-stop shop for members is essential for improving your value-proposition. This rewards the member not only in absolute terms, as in more bang for the buck because they need fewer outlets to participate in the activities they enjoy, but there is also an uptick in loyalty and satisfaction that comes from the much higher level of engagement. When the activities and programming bring members to the club more frequently, it builds relationships and spin-off utilization. That’s real value.


For the longest time, our lives were compartmentalized between home, work and play. Home life was just that, our personal kingdom with family time, while work was completed at an office. Beyond these two keystones, we went places that were strictly for play, like a club. Due to advances in technology, lifestyle preferences, economic pressures and other factors, this division is breaking down. Young people, especially, have a very fluid view of the world, with a common term among millennials being, “I’m working from home today.” This means they are working, but on their schedule. The 9-to-5 office schedule is a thing of the past. More people can work remotely and schedule that work at a time of their choosing. This means play time shifts, too. The club will increasingly find itself as a facilitator of all that, with schedules and physical facilities to match. For example, city clubs were once active during lunch or just prior to or after the work day. Weekends were nearly dark. Today, many city clubs begin to come to life at 5 p.m. and they can fill a role as a gateway to city activities on weekends. Whether a club is in the town or country, remote work spaces and areas of the club that welcome electronic devices to take care of business before or after an activity will be increasingly common. A work-from-home dad might do some work at the club while their child is at swim team practice, or they might make some calls and check emails in the Starbucks-style lounge prior to heading to the golf course. The permutations and combinations are many, but the club, once positioned as a place of refuge from work or home, will become the “Third Place” that accommodates the full range of member’s social, recreational and work spheres.

Independent Child Spaces

While interest in activities will come and go, something that will be common among new members is that they’ll have children. The MY-age wave will produce a new crop of youngsters. In interviews, younger members with children continue to express demand for spaces at their club that encourage use by everyone in the family, but not necessarily together. In short, mom and dad want to bring their kids to the club and have the club entertain and teach them while they do their own thing. This will require programming led by youth directors and physical spaces where children can be safe and have fun with friends. Summer programs will evolve from siloed activities like junior golf or tennis to integrated camp programs that expose children to all the sports offered at the club in full- and half-day schedules. It will also require rooms where children can play with friends, particularly those ages 8 to 12. These will be the modern day version of the former teen room and feature electronic and table games and furnishings to promote gathering and play. These will be augmented with programs developed and led by paid instructors and youth directors. They will allow parents to participate in a program or enjoy dinner while their children are in the safe and secure environment of the club and vastly improve value for the busy, time-constrained family where both adults work.

Adult Game Rooms

Game rooms won’t be only for kids. As we read in the Macro Perspective, adults want to interact in more places than food and beverage outlets. This will be the card room of the past, on steroids. They’ll feature other games and activities that are popular among the up and coming generation. They will create more reasons to hang at the club and their design will spark interaction by having folks moving around and being active. Milbrook Club in Greenwich, Conn., converted bonus space below its new bar into an adult game room, which has been a factor in the big growth in time and money spent at the club since its opening a year ago. 

Quick Casual and Grab and Go Food Outlets

The dining environment in clubs has changed dramatically over the past decade and it will continue to evolve significantly in the next 10 years. This is driven by a confluence of forces, ranging from changing tastes, time constraints, labor shortages and wage pressures. Dining remains the most important club activity when all members and spouses are considered. To respond, clubs will need to further evolve their facilities and programs. The old model of formal and casual dining will be replaced with a base dining outlet that is predominately upscale casual in orientation with indoor and outdoor spaces that allow a wide range of users to find a place that is comfortable for them. These areas will flow together in spaces without walls, but décor and other characteristics that set the tone for their use. This will include areas like the lively bar with space for dining and relaxing and a great dining space for couples; a quiet area for dining where conversation is part of the mix; and, a space for families. The new and growing dining outlet in clubs will be a quick casual space that will blend the traditional golfer’s grill and club snack bar with quick casual concepts like Panera, Starbucks and Chipotle. This will have some of these same features, like craft beverages, small plates and healthy hot lines to serve evolving tastes, but it will be labor efficient with counter ordering and food either taken to the table or brought by runners. This sort of marketplace concept will potentially have branded club specialties. The new grill at Boca West—essentially a very high end “street scene”—is a landmark design for this category.

Technology and Sports

Technology will increasingly become part of the sporting experience. From the intelligent squash court that tracks players’ every move and shots to provide real-time feedback and statistics to the golf performance center outfitted with Trackman, Flight Scope on any of the other technological advancements, sports play is becoming more sophisticated and analytical all the time. If clubs are going to remain the premier place to learn and enjoy games, they need to invest in the technology that will increasingly comprise the elite experience. Interestingly, these investments not only make the game better and more enjoyable, but when supported by food and beverage outlets and premier areas to promote gathering, they also build communities, which is the core reason clubs exist. These sporting tools also include a fun element too, with children able to watch movies or kill zombies on the same court where the squash championships are held. There is opportunity in the simple and spatially compact games and activities that are growing in popularity. For example, fitness has the most compact user to square footage of any of the activities a club could offer. Similarly, platform tennis, pickleball bocce and golf simulators are all of a size and scope that can fit on virtually any club site and they are relatively inexpensive to build. When programmed with leagues and supported by social areas they can become a highly valued new dimension of the membership experience.

Continued Growth in Health and Wellness

What golf and other games were to the club of the past, fitness will be to the club of the future—a core reason for being and a key source of engagement. It is the perfect community endeavor, and exciting changes are taking place that move fitness as drudgery to a fun. For example, the fast environment of classes and programs combined with a good dose of technology—think Peloton or streaming yoga and aerobics instructors—are extremely popular. Fitness will move outdoors, with exercise spaces and more. Desert Mountain is showing the way with its new app to connect hiking members together and encourage use of their 17-miles of trails.

Reciprocal Relationships and Multiple Outlets

The drive for value will create more tie-ups between clubs, as well as outright mergers and acquisitions. Union League of Philadelphia is at the forefront of this. Its diversification and regionalization efforts now provide reasons to join as a young up-and-comer getting started in Center City Philadelphia, through to when a family might move to the suburbs and want traditional country club offerings, or later when you are going to your beach house at the Jersey Shore. The club now has something for everyone, and the value proposition is perhaps the greatest of any club in the country. The Wisconsin Club is following suit and others will surely follow, if they’re smart.

 Man Bites Dog (The Turnaround)

The media loves to write stories of struggling clubs, with The Wall Street Journal recently running yet another article on failing gated community clubs due to the fall-off in demand for golf. As the My Ratio grows, its increasingly likely that you’ll soon start seeing stories about the growth in clubs, from the new-age ones just coming online to the reinvented ones that are becoming more common. The supply of prospective members will be the highest it’s been in forty years, and if clubs respond to evolving lifestyles—much of which aligns more with our traditional club values than we might first think—there is good news, and great value in membership, ahead.

The Boomers: They’re Not Done Yet

The good news in changing demographics isn’t reserved only for mainstream clubs in major cities and the surrounding suburbs. While they are no longer joining the suburban country club, baby boomers will remain a potent force in the club world for a while yet. This 80 million strong group is now between the ages of 55 and 73. Some are downsizing to the city and enrolling in modernized city clubs, like The Union League of Philadelphia. Others are stepping further afield, and again look south as they start to transition to retirement. This is good news for clubs in the Sunbelt. As recently reported in the Naples Daily News, private clubs in Florida spent more than $1 billion upgrading to meet the demand for lifestyle clubs, ones where there is good golf, along with the best in health and fitness and wellness, all sorts of fun and games, and an enrichment series to keep the brain sharp and friendships growing.

Governments in high-tax states like California, New York, New Jersey, Connecticut and Illinois are helping push these folks out of the nest. This is likely to pick up more steam when people in these states see expensive tax bills this spring. As you may recall, the Trump tax reform legislation reduces the deductibility of State and Local Taxes (SALT) for the wealthiest payers. The clubs in Florida, Texas, Nevada and other no or low-tax havens will see the southern migration jump higher. The stories of empty estates on the North Shore of Chicago are real, and club managers in the region are telling us their nonresident rosters are growing fast. Interestingly, the solution for these clubs is much the same as it is for those “up north”—make it a fun place with all manner of facilities and programs to drive value, and you’ll get your share of this pie, even if golf is only part of the mix.

Club Trends Winter 2019