In Due Time

Clubs struggle with how to best infuse badly needed new blood, without draining the life and spirit out of valued current members.

by Charlene Arsenault (editor@clubandresortbusiness.com)
September 2007
 

Diamond Run Golf Club keeps membership levels to a minimum by offering only full golf memberships, young executive golf memberships, social memberships and dining memberships.

It used to be a big deal to belong to a country club; it meant you had achieved a special status. While it’s still a big deal to many extents, over the years the air has become a little less rarefied.

Many clubs, struggling to prop up sagging member ranks, have resorted to offering multiple options to lure new segments of the population. But some say this dilutes the value of membership, and may be doing more harm than good.

“There is much controversy in this area,” says the Chairman and CEO of a Maryland-based hospitality consulting firm. “Clubs are all over the map with respect to initiation fees and dues. Some clubs now offer a shopping list of membership types, trying to have something for any potential member.”

Keep It Simple…
It’ll just muddy things up. That’s pretty much the take that Lori Moore, Membership Director of Diamond Run Golf Club in Sewickley, Pa., has on multiple levels of memberships. For Diamond Run, which sticks to four categories (full golf, young executive golf, social and dining), keeping it simple has been highly beneficial.

“What I have noticed about other clubs,” says Moore, “is that they have multiple levels of memberships within each category, which has a tendency to complicate matters within the club. It’s hard to keep track of who is in what category, and what privileges they have.”

That was the situation Monte A. Carmack inherited when he first took the helm as General Manager of Heathrow Country Club, just north of Orlando. Twelve types of memberships were available, and trying to sort thr

Summing It Up • When it comes to creating membership categories, simpler is better. • One of the key traits of more successful clubs is a high level of agreement and shared common interests among members. • Mandatory memberships in community-based clubs help prevent a decrease in property values.

ough all of their various nuances could make your head spin. A seasonal membership was for those who stayed less than six months a year; dues were 82 percent of full golf status. The sports membership was valid Tuesday to Friday and on weekends, by paying 75 percent of the greens fee. For a single membership, you’d dish out 70 percent of the golf membership. The tennis category offered both single and seasonal options, and the social membership was limited to clubhouse privileges and the athletic facility. The list trickled on.

Since reducing the number of membership categories at Heathrow Country Club, total membership has risen from 729 in 2003 to 902 in 2007, says GM Monte A. Carmack.

Carmack soon argued to reduce the total number of options to five: social, racquet, full golf, intermediate golf and corporate. “I have heard of clubs that try to tailor a membership to almost every group they can differentiate,” he says. “This creates so many ‘types’ of memberships that you look like you are desperate, whether you really are or not. It was my ‘suggestion’ that we simplify all membership categories and define who we were, and stop trying to be all things to all people.”

Since implementing the change, Heathrow has bulked up across the board: golf members (from 370 to 434), tennis (167 to 201) and social (from 192 to 268). Total membership has increased from 729 in 2003 to 902 in 2007.
“As you can imagine,” says Carmack, “activity throughout all areas of the club has increased, and [Heathrow] is alive with members and activities.”

Full Commitment
For Beaver Creek Country Club in Hagerstown, Md., a substantial membership drive that it undertook this year, after deciding to drop its associate membership option, is already paying off—not only with better revenues, but just as importantly, with a greater sense of pride, privilege and contentment throughout the club.

Previously, Beaver Creek had 250 full members and 300 associates. “It was a risk to eliminate the associate membership,” says Patrick L. Steiner, President and CEO, “because [the category] contributed 25 percent of our total golf revenue. However, we felt that if we eliminated the initiation fee, many of those members would convert to full membership status.”

Also contributing to the decision, Steiner adds, was a growing rumbling among full members that “the associate members did not pay dues 12 months a year, but could still pick and choose when they wanted to play.”

So Beaver Creek decided to go strictly with full memberships, knowing it needed to convert 40 associates to break even. It easily exceeded that threshold, adding 85 new full members. For those who didn’t join, limited playing times are still offered to the public.

“Diversification can be good or bad,” says Steiner, “depending upon your ultimate goal. Our ultimate goal is to be where we now are—a semi-private club with a strong full-membership base.”

Keeping Options Open
Some private clubs, though, feel it’s important in today’s market to retain as much flexibility as possible in their structures. They have worked to devise innovative solutions that can still offer a variety of options, without cheapening the overall value of membership.

For example, a general manager at a private club in the Midwest says he knows of no other club that offers the structure now in place at his club. He describes it as “a la carte” membership that allows the club, which is highly ranked for both its golf course and other facilities, to have 325 full members, 700 social members, and 100 that fall into other categories. Caps on specialized categories like swimming and tennis memberships, the GM says, allow the club to have a greater number of members without overwhelming any of the facilities.

“Our ultimate goal is to be where we now are—a semi-private club with a strong full-membership base.” says Patrick L. Steiner, President and CEO of Beaver Creek CC.

“You must be invited to social membership,” he says, “and have two full-member sponsors. To become a full member, a social member must express interest and have seven members as references. We have an extensive pool of potential full members.” With an initiation fee of $12,000 for social and $50,000 for full, some have waited 20 years to become a full member, he adds.

Making this kind of structure work, this GM continues, “depends on the type of club you have and whether you have diversity in membership. Some older clubs are very content with having only 400 members and a mentality of ‘either you’re a member, or you’re not.’ Our club has been very successful with the a la carte membership; the members that use the various other facilities, such as tennis, fitness, pool and paddle tennis, are the ones who pay for them. Our members truly are paying for what they use.”

There Goes the Neighborhood
Where the residential golf and country club segment is concerned, a slip in a club’s profits doesn’t only indicate reduced numbers—it can also affect real-estate values. This can obviously concern the property owners, and also erode the image of the club. In the past few years, with a faltering economy, residential clubs have looked at mandatory membership as a solution.

*Developer-owned and member equity Source: 2007 club operations & financial data report / CMAA

“[Residential] clubs draw from their neighborhood, so to speak,” says an industry consultant. “So the membership plan will reflect the affluence of that market area. The longer a club has been around and the better its location, the more it can stick to a limited-membership offering. But new clubs with more remote locations are going to have to split things up, to get a total dues income line that makes it work.”

Experts maintain that mandatory membership is the way to go for the residential community with a club component; otherwise, people will often choose a lower dues option. Ultimately, a club should have the facilities and programs that meet the buyer’s needs, or that buyer will look elsewhere. For all segments of the club industry, the new challenge is now to offer a product that can attract new blood, while still protecting the vested interests of “gold” or “charter” members.

 

See related story, "Culture Club."