OK, before all you under forty year old Young Executive Professional Entrepreneurial Business people all get up in arms over this issue,let me state the point here first and then let the debate begin.
Does offering a membership program that takes away from a club’s budget make sense?
Many private country clubs and dinner clubs offer a membership package for people under 40 years of age. Some set the limit at 35 years of age. Young Executive Membership packages usually have a lower initiation and monthly membership due than the over 40 members dues. These Young Executive Memberships programs are being created and launched at private clubs around the country in an effort to freshen their membership. On the surface these packages look good and carry an image of making sense. However, do they help the club in the short term or long run?
Several questions develop with this plan which highlight the concern with if these packages accomplish what they are created to do. Does bring in younger members to stimulate a club’s membership ultimately generates more revenue? On paper it looks good, but does it actually work?
The questions continue:
If the Net Cost (meaning no profit is included in this figure) per month is $200 to service each member of a private country club (or club for that matter), no matter what their age is, then does it make sense to offer a membership package that Nets $100 a month until that member reaches 41 Yrs Old (or 36 in some packages)?
If the answer to this question is yes due to the NET $100 does produce a profit, then the next question is obvious..
Why are the regular members being gouged? Are the regular members subsidizing the young executives?
Rationale
Some of the reasons I have been provided by the dozen or so members of country clubs around the country whose club’s offer Young Executive membership package have told me it is to stimulate the club’s economy with new and younger membership. When asked for the rationale that explains offering a package that runs in the red provide to the club’s operations budget I am told that the membership is told that “the investment the club makes in bringing in younger members at a reduced membership initiation fee and monthly due will be recovered from these younger members increased spending while at the club”.
Meaning that the club’s management is taking a risk in betting the club’s money hoping these younger members will frequent the club more and spend money for F&B and in the golf pro-shops.
Realities
This plan works on well on paper and with a coerced individuals. Sure it offers young people who are starting at lower salaries become a member of a country club and then, in theory, as their income increases from their advancement in their business, they are then levied the full rate when they get to the maximum age.
However, in reality these younger members spend no more or less than the regular member. The morale of the older members who see through the smoke and mirrors to realize they probably are subsidizing these youngsters memberships, feel discriminated against for being over 40.
Actually, the young members at my club, and other clubs around the country I have visited, have told me they:
- Only come to the club for the golf since four rounds of golf a month at the young executive rate is cheaper than four green fees at the public course.
- Never rent a cart since they are into fitness.
- Never purchase anything at the halfway house due to the inflated costs.
- Seldom bring their wives or kids since that costs too much.
- Only bring the wife and kids to the club during the summertime when the pool is open.
- Never eat at the club.
- Keep the bar bill to one beer or drink
As far as their thoughts on staying with the club after they pass the maximum age for the package:
- I am only here because the club I want to be a member of permanently does not offer a Young executive package.
- I am not concerned with losing my initiation fee when I drop my membership here in two years when I turn 40. I look at the initiation fee like a depreciation on a car.
- I am out of here on my birthday. I would rather be a full paying member at a club with better amenities.
So the question still stands, does offering a discounted rate to people under 40 really help the club survive? Since private golf clubs and country clubs sit in the middle of the golf industry’s economy there is some concern at what impact to golf these younger golfers pulling out of country clubs will have to the overall golf economy.
There are other answers to the private golf club, country club’s revenue woes that would work better. What do you think would work?
Let me know how I can help.
If you do a financial analysis whether to join a private club or not, you will never join.
If you put a pencil to every membership promotion, you will never have a membership promotion. In the past twenty-four months on our board, more older members (hell, I'm sixty) ask about getting new members than the course condition, food quality and our nude female swimming policy.
If ANY members choose other restaurants over your club's dining facilities, you are gouging your members or your food quality sucks. I certainly hope you are not trying to make a profit on food and beverage.
Your (My) board and General Manager only really have two responsibilities. Recruit new members to replace normal loss through attrition and run the club in such a way you ONLY lose members to normal attrition – death and Florida.
If your 'private' club has an owner and he is against any of the above, find a club where the members own everything.
Good points Vince, And thanks for your support.
I have done a number of financial and psychological analysis on joining a private country club and find that I am sane to be a member of of a private golf club primarily due to how much I value my professional and personal time. I sent my time on the public links waiting on every shot and spending 6 hours for a round..I will stay with the private club four hour rounds, thank you.
We do have a good chef and the food is pretty good, but the facility was built back when Donna Reed was a housewife. It needs to be bulldozed. I am seeing a large number of aged clubhouses in my travels and hear from their membership that is the number 1 deterrent to recruiting new or younger members to join the clubs.
There are a number of options the private member own or the semi-private corporate owned country clubs can do, but they will need to hire none country club management background personal to reach new solutions.
Good news is..the investors who are losing tons of money are now realizing they will just have to walk away from clubs they built on borrowed money and, as your said, let the members run it..I am sure they could do just as well as these guys and gals demanding 18% ROI each month..geez..
Obviously, I was not talking about you or your club. Just people in general and clubs in general.
For the thirty-years I've belonged to my club, I have only mathematically made sense of my membership in the past five years since I retired. But, never in those thirty years did I even think about quitting. I started a new small business after retirement, but was still able to play 5-6 days per week. Drinks and sandwiches are probably 20-25% cheaper than other local eateries.
As soon as I hear someone say, “Well, if I play 7 times per month and the kids use the pool 3-4 times per week…”, I know if he joins his membership is tenuous at best. The first month he gets a bill (Jan, Feb, Mar) when he did not use the club at all, his wife has already made the 'membership' decision.
It's tough out there. The pressure is on the club to do everything they can to preserve genuine value for every member dollar spent. Same thing at the non-private courses. Cheap is not necessarily value. Cranky bag boys and inattentive pros, waitresses and bartenders will chase people just as quickly as high prices…
I hope people appreciate the time and effort you put into this area of the golf industry. It is not glamorous or fun. But, unless people start listening to you, golf is going to continue to struggle for years to come.
If you do a financial analysis whether to join a private club or not, you will never join.
If you put a pencil to every membership promotion, you will never have a membership promotion. In the past twenty-four months on our board, more older members (hell, I'm sixty) ask about getting new members than the course condition, food quality and our nude female swimming policy.
If ANY members choose other restaurants over your club's dining facilities, you are gouging your members or your food quality sucks. I certainly hope you are not trying to make a profit on food and beverage.
Your (My) board and General Manager only really have two responsibilities. Recruit new members to replace normal loss through attrition and run the club in such a way you ONLY lose members to normal attrition – death and Florida.
If your 'private' club has an owner and he is against any of the above, find a club where the members own everything.
Good points Vince, And thanks for your support.
I have done a number of financial and psychological analysis on joining a private country club and find that I am sane to be a member of of a private golf club primarily due to how much I value my professional and personal time. I sent my time on the public links waiting on every shot and spending 6 hours for a round..I will stay with the private club four hour rounds, thank you.
We do have a good chef and the food is pretty good, but the facility was built back when Donna Reed was a housewife. It needs to be bulldozed. I am seeing a large number of aged clubhouses in my travels and hear from their membership that is the number 1 deterrent to recruiting new or younger members to join the clubs.
There are a number of options the private member own or the semi-private corporate owned country clubs can do, but they will need to hire none country club management background personal to reach new solutions.
Good news is..the investors who are losing tons of money are now realizing they will just have to walk away from clubs they built on borrowed money and, as your said, let the members run it..I am sure they could do just as well as these guys and gals demanding 18% ROI each month..geez..
Obviously, I was not talking about you or your club. Just people in general and clubs in general.
For the thirty-years I've belonged to my club, I have only mathematically made sense of my membership in the past five years since I retired. But, never in those thirty years did I even think about quitting. I started a new small business after retirement, but was still able to play 5-6 days per week. Drinks and sandwiches are probably 20-25% cheaper than other local eateries.
As soon as I hear someone say, “Well, if I play 7 times per month and the kids use the pool 3-4 times per week…”, I know if he joins his membership is tenuous at best. The first month he gets a bill (Jan, Feb, Mar) when he did not use the club at all, his wife has already made the 'membership' decision.
It's tough out there. The pressure is on the club to do everything they can to preserve genuine value for every member dollar spent. Same thing at the non-private courses. Cheap is not necessarily value. Cranky bag boys and inattentive pros, waitresses and bartenders will chase people just as quickly as high prices…
I hope people appreciate the time and effort you put into this area of the golf industry. It is not glamorous or fun. But, unless people start listening to you, golf is going to continue to struggle for years to come.