Among the most interesting by-products of the COVID pandemic is the positive impact on golf, including the introduction of new players and the increased frequency of play by existing golfers. With that, the economics of many clubs have improved, at least temporarily. The culture of many clubs has also changed.
Prior to 2020, many private clubs were struggling. The National Golf Foundation (NGF) estimated in March 2023 that 4% of public access courses and only 1% of private clubs were in a state of financial distress. That contrasts with 2016 data indicating 25% of public courses in distress and 14% of private clubs struggling. As we all know, many facilities were forced to close. With the newfound success during the past 3 years, changes have occurred at many clubs ranging from aggressive capital improvement plans to increased membership entrance fees, dues, and green fees, along with some private clubs risking the more relaxed and casual atmospheres by implementing more rules and ratcheting up enforcement – because they can.
During the pre-COVID days of clubs seeking members (more than members seeking clubs), it wasn’t uncommon for frustrated club leaders to overlook minor infractions of (sometimes antiquated) rules in the interest of preserving membership levels and the resulting revenues. The answer to any reasonable request was usually – “Yes”. Now, with many clubs having waiting lists for entry, presumably in an effort to enhance the club’s prestige, club cultures are changing. I’m reminded of a sign at a club I once belonged to (no longer existing) that listed about 15 or 20 rules, all beginning with the word “NO”, in bold red letters.
To quote Daniel Rapoport in his November 2022 Golf Digest piece What it Takes to Get Kicked Out of a Private Club These Days, “...some clubs are glorified fraternity houses, others bring to mind a place of religious worship, and that vibe typically shifts the line.” At many, if not most clubs, the line is constantly moving, often dependent on the club’s financial situation. Do members join clubs seeking the environment of church or synagogue?
At some clubs, especially older ones, members often find themselves “looking over their shoulders” and seek to avoid potential conflict and “getting a letter”. People speak in hushed tones and can be “up-tight”. Often, this atmosphere is created by club leadership and can ebb and flow back and forth as leadership changes. If leadership doesn’t change, culture rarely evolves. At more progressive clubs, there is less pretense and more of a relaxed and jovial environment where members feel free to “let their hair down”. The difference could be based on the club’s economics, whether the club is member-owned or not and sometimes the age and history of the club.
A new model of club is being introduced at Old Barnwell in South Carolina, where Charleston’s (transplanted from Chicago) Nick Schreiber is creating championship-quality golf, camaraderie and opportunity to both traditional club members and people in the community who’d never considered being part of the club lifestyle. The club’s stated mission is “bringing people together through golf." Membership is tiered ensuring that the focus isn’t on wealth. They’re creating programs that “empower, invite, and celebrate people and communities historically underrepresented in the game of golf – to create new traditions and a legacy that belongs to everyone.”
Another culture change at many clubs since COVID is the willingness (often eagerness) to spend money. While some clubs delayed – often to a fault – reinvestment in their facilities, lots of clubs today are embarking on aggressive capital improvement plans, sometimes incurring substantial debt, and usually resulting in assessments to the membership. Assessment, never popular, has been a dirty word for many years and is now typically referred to as “capital dues” and charged on a monthly basis. At those clubs where members are receptive and capable, debt can be avoided by a one-time, substantial assessment. Few clubs have that capability. Nevertheless, leaders at many clubs have been receptive to incurring the cost of capital improvements in the form of debt financing even though debt is now more costly than when the project was conceived.
This increased cost of debt creates a situation where the cost of membership soars and the fiscal health of the club can be compromised, if not now, in the future from the potential impact on membership stability. It’s long been said that debt for clubs is a problem and has sunk many clubs in the past. Yes, clubs require capital investment to maintain relevance, but, the funding is best achieved through equity, when possible. Deferred maintenance, and funding for improvements and their cost should be anticipated by the establishment of adequate budgeting and reserves.
In many of the member surveys I’ve seen through the years, members at clubs with the attitude of “customers” seek to have others pay for their amenities. That doesn’t work. Accordingly, those clubs which, through creating an environment and culture where members feel appreciated and develop a sense of “ownership” (whether member-owned or not) typically experience long term fiscal stability as a result because the membership takes pride in the club and their role in it. When the general membership, not just the board or ownership, feel like the club is their home, they’ll support the club and it will thrive.