In the coming years, private clubs in general face increasing risks and may not be a sustainable model. It pays to be careful.
Since 2000, golf in America have been steadily declining by most all measures and with that many people have been exiting the private golf clubs. Increasingly many private clubs have been forced to close or restructure, often allowing the public to share the facilities. There has been new unexpected fallout – fights between the clubs and their departing members.
Clubs are now seeking to recapture unpaid dues, and fees and assessments while members are seeking to recover initiation fees and prepaid sums. Lawsuits follow.
Another development is that with golf/housing developments as the real estate developers sell out their inventory, they will also sell their clubs to the membership. Many times the members are shocked to learn that their memberships have been subsidized by the developer and now they must either pony-up to cover the real costs or drop amenities and services.
The point is that belonging to a private club is no longer a “safe” or “automatic” investment, but rather requires due diligence before joining and ongoing vigilance afterwards. The demographics do not support the sustainability of the private club model as white males between the ages of 26 and 45 are eschewing golf in significantly large numbers. That means that there are now not healthy enough numbers of people willing to continue to join private clubs to sustain many’s continued viability, and that the last people leaving these private clubs will be left with holding the financial bags for those who left earlier. You may think that your club is the exception, but watch out.
As members resign, dues and expenses for remaining member must go up. If you can’t afford that scenario, it’s time to take a hard look as to whether or not your private club fits you. In the meantime, do get involved with your club or at least stay up-to-date with how its finances, membership, and governance are progressing.
