Club Renovations

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Opinions, thoughts and viewpoints from across the golf industry

Club Renovations Should You or Shouldn't You?

By Larry Hirsh, President, Golf Property Analysts




Renovations are a constant source of debate around many clubs.  Members love restored, upgraded or new facilities and amenities but don’t often want to pay for them.  Some clubs elect to improve areas that can accommodate outside events, designed to generate revenues that might enable the club to embark on more capital improvements later.  Other clubs undertake massive projects that reinvent the club and are designed to revitalize or prepare the club for the future. Whether a club should or shouldn’t renovate – and how much is what we’ll explore in this article.

There are three types of renovation projects:

  1. The club has been neglected, is run down and needs to address deferred maintenance and functional obsolescence.
  2. The club is well-maintained but hasn’t updated or upgraded facilities in many years.
  3. The club with upgraded facilities that simply wants to outdo all the other clubs.

The first club is probably experiencing decline in membership and before embarking on any project needs to examine the feasibility of not only correcting deferred maintenance, but also why facilities and infrastructure have been neglected and whether or not the club should continue into the future.  Are the club’s “bones” potentially competitive in the current and anticipated future market?  If the club has potential for the future, conventional wisdom suggests that correcting deferred maintenance is advisable.  If future potential is limited, alternative uses for the property are indicated.

The second club might be an older club with an affluent membership that has maintained the facility but facilities are not consistent with the needs and wants of present and future members.  Is the membership aging?  Have they been resistant to change?  Has membership declined?  Is the location in an area once desirable but no more?  If the club has potential for a good future and possible growth, both deferred maintenance and a sensible program of upgrades might be indicated.

The third club may already be doing well.  The membership may be full and club leadership may feel that they can leave a legacy by adding upgrades and either assessing the membership, increasing dues or both to realize their vision.

In each of these cases a focused approach is required.  There is no “one size fits all”.  Each and every club has unique challenges based on that club’s competitive market, their location and demographics, their facilities and the culture  of the membership, in this case meaning the desire for upgraded facilities, the appetite for financial commitment and the potential impact on future membership, both positive (from improved facilities) and negative (from increased cost).

While there is no doubt that updated and well-maintained facilities are a hallmark of successful clubs, the choices made must be considered and well thought out.  NO CLUB IS BULLETPROOF!  As economic cycles come and go, club cultures can change and membership can increase or decline accordingly – even with the most prominent and successful clubs.  A significant dues increase at the wrong time, possibly coupled with an anticipated economic downturn can impact even the seemingly most stable of clubs.

The bottom line is that club renovations are a “sexy” and usually attractive idea, but thorough analysis is required to plan and implement them in both an economically feasible and timely manner.

 


Larry Hirsh is the President of Golf Property Analysts and can be reached at larry@golfprop.com

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** The views and opinions featured in Golf Business WEEKLY are those of the authors and do not necessarily reflect the position of the NGCOA.**