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SOCIETAL TRENDS AFFECTING CLUBS. William P. McMahon, AIA Club Consultant March 29, 2007. Clubs will exist and prosper if they well serve the needs of members. McMahon has analyzed findings from 20+ years of club survey research to learn what younger and older members want in clubs.

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Societal trends affecting clubs

SOCIETAL TRENDSAFFECTING CLUBS

William P. McMahon, AIA

Club Consultant

March 29, 2007



McMahon has analyzed findings from 20+ years of club survey research to learn what younger and older members want in clubs.


Overview of trends
Overview of Trends research to learn what younger and older members want in clubs.

  • Why are Private clubs are under so much pressure?

  • Economy

  • Increased Competition

  • Population Demographics

  • Lifestyle Changes


Membership trends
Membership Trends research to learn what younger and older members want in clubs.

  • About 50% of clubs have fewer members now than in 2001.

  • Market peaked sometime in year 2000.

  • Split in marketplace:

    • Higher end clubs are faring well; lower tier clubs are struggling.


Average number of members
Average Number of Members research to learn what younger and older members want in clubs.

Country Club Average

Reg/Full Mbrs: 380

Country Club Average

Total Mbrs: 636

* Does not include CA and FL


Membership capacity
Membership Capacity research to learn what younger and older members want in clubs.

  • 72% of country clubs are below their maximum number of allowable members

  • 83% are seeking additional members

  • 20% indicate they currently have a wait list for joining


Membership capacity by initiation fee
Membership Capacity research to learn what younger and older members want in clubs.By Initiation Fee


Membership trends1
Membership Trends research to learn what younger and older members want in clubs.

  • Membership satisfaction runs close to 80%.

  • Most attrition continues to come from death, illness and relocation.

  • Challenge is lack of demand from young members to replace prior generation.


Reasons
Reasons? research to learn what younger and older members want in clubs.

  • Too many golf courses, clubs and social/recreational outlets

  • Dated Club Model - Failure to offer membership value to modern society

  • “Bowling Alone” - Busy, time constrained society where joining in all organizations has declined

  • Corporate Restructuring - Changing way in which business is conducted


Forces at work

Forces At Work research to learn what younger and older members want in clubs.


Golf marketplace
Golf Marketplace research to learn what younger and older members want in clubs.


General trend
General Trend research to learn what younger and older members want in clubs.

  • Number of golfers in year 2000 = 26 million.

  • Number of rounds have declined each year since 2000.

  • Only significant growth recently is among juniors; i.e., Tiger Woods effect.

  • Number of golf holes exceed demand in most communities.


Golf goes public
Golf Goes Public research to learn what younger and older members want in clubs.

Private clubs are down by both % and number.


Club marketplace
Club Marketplace research to learn what younger and older members want in clubs.

  • Many private clubs are no longer the only or best places to play golf in their area.

  • Clubs that work:

    • High end/Old money

    • Really special golf

    • Full amenity, family club with enhanced programs and facilities

  • Leadership must work to distinguish their private club from competition and alternatives.


Population trends
Population Trends research to learn what younger and older members want in clubs.

Population in Millions


Up and comers under age 45
Up and Comers (under age 45) research to learn what younger and older members want in clubs.

  • Athletic and recreational focus

  • Casual lifestyle

  • Family oriented

  • Dual incomes

  • Gender equality

  • Building relationships

  • Somewhat restricted incomes


Up comers
Up & Comers research to learn what younger and older members want in clubs.

  • Only 15% of younger members are “very satisfied” with their club.

  • Over 75% cite family activities as important reason to join (#2 after golf).

  • By a margin of 3 to 1, younger members report dissatisfaction with their club’s family programs.


Up comers1
Up & Comers research to learn what younger and older members want in clubs.

  • Rate casual dining as highest in importance.

  • Over 40% dissatisfied with casual dining options.


Up comers2
Up & Comers research to learn what younger and older members want in clubs.

  • Approximately 66% cite golf as important; lowest of three age segments.

  • Much higher emphasis on other activities:

    • Fitness

    • Swimming

    • Tennis

    • Junior programs


Prime timers age 46 65
Prime Timers (age 46 – 65) research to learn what younger and older members want in clubs.

  • Golf begins at 50

  • Family almost grown

  • Growing affluence

  • More free time

  • Hosting lifetime events

  • Couple activities


Leisure living over age 65
Leisure Living (over age 65) research to learn what younger and older members want in clubs.

  • Less strenuous recreational activities

  • Retirement/fixed income

  • Abundant free time

  • Empty nesters

  • Established patterns (resistant to change)

  • Play much golf


The generation gap
The Generation Gap research to learn what younger and older members want in clubs.

  • Lowest satisfaction exists among members under age 45.

  • Barriers to satisfaction among young:

    • Limited access and appeal to family

    • Level of formality and informality

    • Lack of entertainment options

    • Gender issues

    • Lack of programming


Summary of forces
Summary of Forces research to learn what younger and older members want in clubs.

  • Survey data and focus groups indicate youngest segment of members is least satisfied.

  • Approximately 65% of members surveyed joined their club between ages 36 and 45.

  • Dissatisfaction among young segment is major inhibitor of membership recruitment and growth.


What s happening at other clubs

What’s Happening at Other Clubs? research to learn what younger and older members want in clubs.


Does your club have a strategic plan

Country/Golf Club Average: 52% research to learn what younger and older members want in clubs.

Region Number of Reg/Full Members Initiation Fee

Does your club have a strategic plan?


If you have a strategic plan what year was it developed
If you have a strategic plan, what year was it developed? research to learn what younger and older members want in clubs.


Does your club have an annual board retreat
Does your club have an annual Board retreat? research to learn what younger and older members want in clubs.

Country/Golf Club Average: 26%

Region Number of Reg/Full Members Initiation Fee


How much was your club s most recent dues increase
How much was your club’s most recent dues increase? research to learn what younger and older members want in clubs.

Country/Golf Club Average: 6.9%

Region Number of Reg/Full Members Initiation Fee


Does your club have separate capital dues reserved for making capital improvements
Does your club have separate capital dues reserved for making capital improvements?

Country/Golf Club Average: 45%

Region Number of Reg/Full Members Initiation Fee



How much does your club allocate for clubhouse maintenance repairs in your annual operating budget
How much does your club allocate for clubhouse maintenance & repairs in your annual operating budget?

Country/Golf Club Average: $153,645

Region Number of Reg/Full Members Initiation Fee


Does your club have an annual board retreat1
Does your club have an annual Board retreat? repairs in your annual operating budget?

Country/Golf Club Average: 26%

Region Number of Reg/Full Members Initiation Fee


How many different membership categories do you have at your club
How many different membership categories do you have at your club?

Country/Golf Club Average: 7.5

Region Number of Reg/Full Members Initiation Fee


How many members does your club have in all categories combined

Country/Golf Club Average: 683 club?

Region Initiation Fee

How many members does your club have in all categories combined?


Is your full regular membership category currently at its maximum cap
Is your full/regular membership category currently at its maximum cap?

Country/Golf Club Average: 39%

Region Number of Reg/Full Members Initiation Fee


Is your club seeking additional full regular members
Is your club seeking additional full/regular members? maximum cap?

Country/Golf Club Average: 78%

Region Number of Reg/Full Members Initiation Fee



Does your club have a refundable equity component to your initiation fee
Does your club have a refundable equity component to your initiation fee?

Country/Golf Club Average: 35%

Region Number of Reg/Full Members Initiation Fee


What is your average annual membership attrition
What is your average annual membership attrition? initiation fee?

Country/Golf Club Average: 6.4%

Region Number of Reg/Full Members Initiation Fee



Does your club have a paid staff person in charge of membership marketing
Does your club have a paid staff person in charge of membership marketing?

Country/Golf Club Average: 44%

Region Number of Reg/Full Members Initiation Fee


Does your club have some form of trial or temporary membership
Does your club have some form of trial or temporary membership?

Country/Golf Club Average: 20%

Region Number of Reg/Full Members Initiation Fee


Does your club have a special membership program to encourage children of members (legacies) to join the club?

Country/Golf Club Average: 67%

Region Number of Reg/Full Members Initiation Fee


Where american society has been and where it is going

Where American Society encourage children of members (legacies) to join the club?Has BeenAnd Where It Is Going.


Where american society has been
Where American Society Has Been encourage children of members (legacies) to join the club?

  • Male-Oriented World

  • White, Anglo Saxon, Protestant Founders

  • Formal Lifestyle

  • Very Wealthy Few

  • Unionism to Protect Workers

  • Primarily European Immigration


Where american society has been1
Where American Society Has Been encourage children of members (legacies) to join the club?

  • Church & Religion Important in Daily Life

  • Accepted Moral Codes to Live By

  • Higher Education Primarily for Wealthy and Intelligent

  • Manufacturing Economy

  • Energy Consumption Unchecked


Where american society is going
Where American Society Is Going encourage children of members (legacies) to join the club?

  • International Involvement and Competition

  • Technology Advancement

  • Higher Education for All

  • Service Economy

  • Third World Immigration (Latin America, Asia, Eastern Europe)

  • Religion & Morals Decline

  • Casual Life Style Dominant


Where american society is going1
Where American Society Is Going encourage children of members (legacies) to join the club?

  • Increased Wealth Available to Many

  • Organized Labor a Burden on Society

  • Improving Role for Women in Society

  • White, Anglo Saxons Becoming New Minority

  • Diversity in Population a Strength

  • Environmental and Energy Concerns


Where clubs have been
Where Clubs Have Been encourage children of members (legacies) to join the club?

  • Extension of Victorian Clubs from 1800’s

  • Wealthy Men as Primary Focus

  • Wealthy Anglo Saxons Primary Members

  • Social & Business Prestige Associated with Belonging

  • Golf as Primary Country Club Focus

  • Business Clubs for Business Elite

  • Favorable Tax Deduction for Membership


Where clubs have been1
Where Clubs Have Been encourage children of members (legacies) to join the club?

  • Elite Few Control Club

  • Labor Intensive Operation, but Labor was Cheap

  • Management Extension of Head Waiter Syndrome

  • Corporate America Paying Tax Deductible Membership Costs

  • Very Little Family (Wife & Children) Use

  • Dining Monopoly with Very Little Competition


Where clubs are going
Where Clubs Are Going encourage children of members (legacies) to join the club?

  • Broader Appeal to All in Society (Diversity in Membership)

  • Emphasis on Entire Family (Spouse & Children)

  • High Cost of Membership Must Provide Good Value

  • Golf as Only One of Many Offerings in Full Service Clubs

  • Health, Fitness & Diet Trends


Where clubs are going1
Where Clubs Are Going encourage children of members (legacies) to join the club?

  • High Initiation Fees as Major Membership Deterrent

  • Emphasis on Golf Declining as Did Tennis, Bowling, etc.

  • Management Professionalism More Important than Ever

  • Decline of Moral Values Make Clubs, Along with Private Schools, Last Bastion Against Degenerate Society.

    • Who Wants Children to Grow Up Like Paris Hilton, Britney Spears or Tom Cruise.


Farmington Country Club encourage children of members (legacies) to join the club?

Charlottesville, Virginia


Cascade Hills Country Club encourage children of members (legacies) to join the club?

Grand Rapids, Michigan


Membership survey results point to future trends
Membership Survey Results Point To Future Trends encourage children of members (legacies) to join the club?

  • New Members Under Age 46 Point to Future Club Trends

  • Casual Lifestyle is Here to Stay

  • Excellent Dining Required in all Styles

  • Family Activities; i.e., Swimming, Camps, Social Programs, Dining, Junior Programs, are More Important

  • Health/Fitness/Spa Programs Growing


Membership survey results point to future trends1
Membership Survey Results Point To Future Trends encourage children of members (legacies) to join the club?

  • Less Emphasis on Golf, More Emphasis on Everything Else

  • More Acceptance of Children by Older Members

  • Equal Access for Women

  • Lower Entry Fees

  • Good, Attractive Clubhouse Facilities


Midwest country club example
Midwest Country Club Example encourage children of members (legacies) to join the club?

  • Club’s Leadership Out of Touch

  • Higher Profile Club Losing Members

  • Great Club in Stagnant City

  • Major Emphasis on Golf to Exclusion of All Else

  • 10% Loss of Members

  • Fully Assess Junior Members (Stick It to the Youth Mentality) for Golf Improvements

  • Dining Program Never Changes

  • Full-Service with Swim & Tennis but No Fitness

  • Mindless Raises of Initiation Fee Even when New Members not Joining


Midwest country club example1
Midwest Country Club Example encourage children of members (legacies) to join the club?

  • Club’s Solution to Membership Decline:

    • Raise Initiation Fee $10,000 in Addition to New $12,000 Golf Course Assessment

    • Develop Golf Course Master Plan to Spend More on Course

    • No Thought of Adding Fitness

  • Little Chance of Attracting Many Younger Members with Entry Cost Five Times Higher than Average Club in City

  • 70% of New Club Members Join at Ages Under Fifty

  • Club’s Leadership Hoping High Profile Golf will Support Club

  • No Understanding of Future Societal Trends


Check list for your club s ability to address future trends
Check List for Your Club’s Ability to Address Future Trends

  • Be sure Club Achieves High Satisfaction in all Offerings (at least 70% of Members Must be “Satisfied or Very Satisfied”).

  • Monitor Number of Younger Members.

    • Maintain at least 23% of members under age 46 (within last 5 years, McMahon’s survey research shows a disturbing decline in younger members – 20% today verses 23% five years ago).

    • Where is the youth going? They have money, but are not joining clubs.

  • Monitor what Your Youth wants in a Club and at What Cost they can Afford.


Check list for your club s ability to address future trends1
Check List for Your Club’s Ability to Address Future Trends

  • Verify On-going Monitoring of Member Satisfaction and Quality Assurance Programs for Primary Club Offerings (Dining, Golf and Clubhouse).

  • Have Current Strategic Plan with Clear Understanding of Club’s Purpose and Goals.

  • Be sure Board Updates Strategic Plan Annually.


Check list for your club s ability to address future trends2
Check List for Your Club’s Ability to Address Future Trends

  • Monitor Good Value being Received for Cost – Don’t Reduce Quality to Appease “Tightwads”. High-quality is Essential for Club Success.

  • Be Sure Management Team can Consistently Deliver.

  • Continually Monitor Member Usage to Detect Problems or Changing Conditions.


Check list for your club s ability to address future trends3
Check List for Your Club’s Ability to Address Future Trends

  • Monitor your Facility Conditions to Change with Times.

  • Budget and Spend Maintenance and Upgrade Dollars in Club Facilities Every Year.

    • Minimum of $500,000 Annual Reinvestment.

  • Complete Major Satisfaction Survey Every Five Years to Achieve Member Input.


Check list for your club s ability to address future trends4
Check List for Your Club’s Ability to Address Future Trends

  • In Best of Times, Like Today, Verify your Club is Growing Membership and Investing in Facilities.

  • Annually Verify Management’s Performance.

  • Annually Verify Board’s Performance.

  • Complete Annual Competitive Analysis of Other Clubs, Recreation Centers and Restaurants to Learn what They are Doing.


Conclusion
CONCLUSION Trends

  • Societal Trends are Affecting Private Clubs

  • Clubs will Prosper if they have:

    • Member-friendly environments.

    • Good value for cost of membership.

    • More full-service offerings.

    • Service to youth as well as older members.

    • Ability to change with times.

    • Visionary, involved leadership.

    • Strong management in all positions.


Thank you for listening your questions are welcomed

Thank you for listening. Trends

Your questions are welcomed.


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