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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

slide3

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
  • Why are Private clubs are under so much pressure?
  • Economy
  • Increased Competition
  • Population Demographics
  • Lifestyle Changes
membership trends
Membership Trends
  • 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

Country Club Average

Reg/Full Mbrs: 380

Country Club Average

Total Mbrs: 636

* Does not include CA and FL

membership capacity
Membership Capacity
  • 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 trends1
Membership Trends
  • 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?
  • 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
general trend
General Trend
  • 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

Private clubs are down by both % and number.

club marketplace
Club Marketplace
  • 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

Population in Millions

up and comers under age 45
Up and Comers (under age 45)
  • Athletic and recreational focus
  • Casual lifestyle
  • Family oriented
  • Dual incomes
  • Gender equality
  • Building relationships
  • Somewhat restricted incomes
up comers
Up & Comers
  • 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
  • Rate casual dining as highest in importance.
  • Over 40% dissatisfied with casual dining options.
up comers2
Up & Comers
  • 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)
  • 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)
  • 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
  • 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
  • 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.
does your club have a strategic plan

Country/Golf Club Average: 52%

Region Number of Reg/Full Members Initiation Fee

Does your club have a strategic plan?
does your club have an annual board retreat
Does your club have an annual Board retreat?

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?

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?

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

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?

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?

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

slide44
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
Where American Society Has Been
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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.
slide54

Farmington Country Club

Charlottesville, Virginia

slide55

Cascade Hills Country Club

Grand Rapids, Michigan

membership survey results point to future trends
Membership Survey Results Point To Future Trends
  • 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
  • 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
  • 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
  • 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
  • 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.

Your questions are welcomed.

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