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Taking on the Capital Challenge

The results of the Outlook 2024 Pulse Survey, as described in other articles in this issue of Club Trends, make it clear that even in a new Golden Era with heavily populated golf courses, full recreational and dining facilities and swelling membership waitlists, club leaders are not content

to just sit back and enjoy their current prosperity. Rather, they’re focused on exploring many new avenues for expanding and improving their offerings to extend the good times and ensure their clubs’ continued relevance.

Going down those roads has its cost, but these responses to additional questions in the survey illustrate how the industry is revving up its spending again after a two-decades-long period when most clubs were capital-starved from a lack of members and money:

  • More than half (58.1%) of Pulse Survey respondents said their club has completed or approved a facility improvement program within the last five years.
  • For 2024, over half (53.1%) of respondents said they expect to spend more on facility improvements, while a quarter (25.6%) expect expenditures to be the same, and only 20.1% expect to spend less.

The survey also provided a clear picture of the payoff that spending can bring. Among the respondents who said facility projects had been approved and completed within the past five years, 43% said they had since gained members, and only 6.5% said they had lost members.

There are other clear signs that more industry leaders now have a clear vision for how their clubs can success- fully take on the capital challenge and generate funding, not only to catch up on depreciation and properly maintain their facilities but also develop the new or expanded amenities that will carry their clubs’ success into future generations.

Capital fees to augment initiation-fee revenue are now in place at most clubs, and the use of reserve studies to establish the annual capital budget has increasingly become a regular practice. As a result, record amounts of capital for aspirational projects are being invested across all regions and club types. To sustain the cap ex momentum, club leaders must be dedicated to protecting, preserving and growing their clubs’ assets through comprehensive capital planning that addresses obligatory and aspirational improve- ments within a unified facilities master plan. Once that plan is developed, members must be engaged to help prioritize, fund and implement the most important projects. Establishing and sustaining that process is the surest way to extend the benefits of the pandemic bump into a long stretch of runway that properly positions clubs to provide whatever member experiences fit with changing lifestyles and demographics