Perspective, innovation and focus will be the key to navigating 2021 club budgets. For board leaders willing to embrace the change, the COVID-19 crisis could be the catalyst for a much-needed course correction that will strengthen their clubs and the industry as a whole.
After the 2008-2009 recession, declining dues revenue put significant stress on operating budgets, and clubs that once prided themselves on offering an exclusive, private experience turned to weddings, banquets and outside tournaments (aka non-dues revenue) to fill the gap. It was a dangerous shift away from their true mission—delivering an exceptional member experience—and the consequences became undeniable in mid-March when non-dues revenue dried up, virtually overnight.
Jolted by the shutdowns, clubs pivoted to enhance the member experience through every possible means, and the results have been encouraging. Many clubs report renewed enthusiasm from existing members and a revival of interest in joining that will inject much-needed dues revenue. Data from the Club Benchmarking Strategic Monthly Dashboard verifies those anecdotal accounts. Median year-over-year decline in non-dues revenue was -66.4% in April, -49.8% in May, -27.2% in June, -12.9% in July and -10.8% in August. While limitations on gatherings and other restrictions persist, non-dues revenue is making a comeback thanks to non-dues revenue attributed to increased member usage.
Since it is unlikely that banquet and other non-dues revenue will recover to pre-virus levels for at least the first half of 2021, clubs have an opportunity to capture that momentum and dedicate 2021 budgets to further enhancing the member experience. At this unique juncture, you can choose to let the budget dictate your strategy or develop a strategy to drive the club forward and then budget to implement that vision. The latter approach begins with this question: What will we do to preserve and grow the club’s physical assets, enhance the member experience, and increase the club’s value proposition over the next five to seven years? Use the virus crisis to shift your 2021 budget process to a more member-centric view of the world and reap the benefits.
Ray Cronin is Club Benchmarking’s founder & chief innovator. He can be reached at [email protected].