How quickly the worm has turned. Only 18 months ago, only about one-in-five clubs had a waiting list for membership. The others were often mired in a race to the bottom through incentive-based membership drives and discount programs. Many country clubs now find themselves in the same boat as you—hearing from members that their club is “too busy” or “we have too many members.” This is causing them to reevaluate their membership caps and discuss how to manage a waiting list or whether to start one. After 20 years of a shrinking industry and declining membership, can we take a minute—or maybe a year or two—to celebrate our good fortune?
In the current environment, there are calls from some club leaders and members to shrink the membership and charge higher prices. There are many reasons to challenge this line of thinking. First, most use comes from a small group of members. The 80-20 rule may be a bit of a stretch—meaning about 80% of your use is likely coming from only 20% of the membership—but it is not far off. Since the club is central to the life of these most passionate users, a high price/small membership strategy is unlikely to deter them. They aren’t going anywhere, but it will drive away the fringe user willing to pay some level of dues for occasional access. Another factor in play is that larger clubs have higher levels of member satisfaction. They not only have the resources they need to offer more programs and better facilities, but they also have more energy. They can attract a full field for a golf tournament, populate tennis and swim teams or have active dining rooms. They are fun and lively.
Yes, the essential promise of club membership is ready access to elite facilities and programs by a limited number of people. Members pay a lot of money for that privilege. The basic rules of economics also support the notion that when there is less of something, there is more demand and pricing power. However, the choices you make about member size go a lot deeper than a knee-jerk reaction to unprecedented—and likely transitory—demand.
It is also important to recognize that while attrition may slow during boom times, it does not go away. In finer clubs with consequential initiation fees, almost all attrition is from uncontrollable factors of death, infirmity and relocation, roughly 4% to 6% of the population each year. At a 500-member club, that means there will be 20-30 openings in the typical year, one or two per month, on average. That can eat into a waiting list very quickly.
If you find yourself debating these types of issues, take a deep breath and do a deep dive on user profiles, member privileges and policies and fully loaded financial requirements. In recent discussions with leaders at clubs bemoaning member difficulties accessing the golf course, we found that they had yet to update their policies from leaner times. This included allowing twosomes to play at peak times, overly generous guest policies, permitting junior and senior members to play at prime time and other questionable practices. One was even allowing unaccompanied guests at times. Before you cut off the club’s life blood—those essential whole dollar dues—make sure you have also validated your mission, scrutinized your policies and developed a comprehensive financial plan. At these highly emotional times, let the data help you make the proper decision.
Frank Vain is president of McMahon Group, a full-service private club consulting firm that has served over 2,000 private clubs around the world. He can be reached at [email protected].