Longtime private enclave in Palm Springs, Canyon Country Club, converted to public-access
As March sunshine brought the 2009 golf season closer to startup, a high-end daily fee in Rhode Island, Newport National Golf Club, issued a series of blast emails directly targeting equity-club dropouts.
“Newport National is offering a limited number of full golf annual memberships for the unbelievable price of $3,500 for all the golf you can play, all season long!” the message read. “No initiation fees, no minimums, no assessments, just golf, pure and simple… for only a fraction of the cost of a private membership!”
Meanwhile, around greater Chicago, local golfers noticed a similar print advertisement for the iconic Cog Hill Golf Club and its two sister courses. The ad hung a carrot in front of potentially exiting club members. “No dues, no assessments, no worries, just pure golf,” read its headline.
In Wisconsin, the Edgehill Consulting group was doing research for a Midwestern municipal course tucked in an affluent suburb. “They wanted us to project how much extra play they would get from all the local club golfers who were dropping memberships because of the recession,” says Stuart Lindsay of Edgehill. “They were right about clubs losing members by the boatload—we’re seeing that throughout the Midwest and the Northeast,” Lindsay says. “But rather than a muni, that golfer is probably headed to a top-tier daily fee course.
Unlike the Newport National ad, Cog Hill’s teaser wasn’t a full-on critique of the equity club model. And the product it promoted was open-play green fees (including some permanent tee times), rather than a season pass. Still, the implication was clear—if recession-spooked club members are leaning toward the exits, there are daily fee operators hoping to greet them with open arms.
Thousand Oaks Golf Club, a Michigan daily fee that sports a handsome Rees Jones Signature course, also trains its eye on would-be defectors from the club ranks. At $3,500 a year, the all-you-can-play pass at Thousand Oaks is right on par with Newport National’s offer. Likewise, an ad for Thousand Oaks promising a “True Private Club Experience” piles on the extras. Pay the $3,500 and you get everything from free club storage to unlimited range use to 10 complimentary guest green fees a year.
For discerning golfers in and around Princeton, New Jersey, Royce Brook Golf Club offers two excellent Steve Smyers-designed courses, East and West, one of which is for season-pass members only. The other 18 (East), is devoted to open play, although this year Royce Brook set up a loyalty card program for that course. Meanwhile, equity private clubs are abundant in the area, and Royce Brook managers know they offer a fine alternative to any golfer who needs to opt out of the equity private category.
“We think we’d be attractive to those players for several reasons,” says Royce Brook head professional Joe Febonio. “Our annual dues are lower, there’s no initiation fee or bond, and there are no assessments.” The 450-acre complex currently does not offer tennis or swimming, but management believes it would be attractive to a segment of resigning club members. “We’re trying to put together a plan that appeals to that group and do it in way that’s tasteful,” says Febonio. “They might drop out of their equity club, but they’re not going to give up the game.”
At Hunting Hawk Golf Club, an eight-year-old semi-private just outside Richmond, Virginia, economic recession has delivered some club golfers with no marketing required. Membership director Cheryl Hartman is aware of equity club woes in her local golf market, but hasn’t made an overt offer to parachuting private-clubbers. “We’ve held our membership costs steady over the past couple of years, while the clubs around here have been struggling,” says Hartman. “We’ve had a few [former club members] join up with us.”
Private clubs in trouble, members seeking Plan B, and for-profit public courses striving to provide it—that pattern seems to fit the northern tier of the country more than the Sunbelt. John McNair, vice president at Southern California-based JC Golf, says his region has too much higher-end public golf for dropout-snagging to be a significant factor at any one golf facility. “That represents maybe a one percent pickup against a 10 percent loss that you’re already dealing with because the recession is keeping your core customers away,” says McNair.
Also, when someone leaves the exclusive comforts of an equity private club, a quality course is just one benefit they give up. The prestige factor and how that might impress clients and business prospects is also suddenly missing. At the four-course cluster of Traditional Clubs in lower Virginia, GM Jerry Morelli sells a membership that allows private-club members to play with their non-member friends in a satisfying and seemly manner. “At what we charge, which is just $164 a month, it works as an alternative option for that private club player,” says Morelli. “They keep their club memberships, and we give them flexibility.”
David Frum, general manager of Cyprian Keyes G.C. in Boylston, Mass., is a daily fee owner operator who grew up in a country-club family. At the very least, Frum uses private-club standards to judge his own product and service by. “It’s always been an element of our business plan, that we could be a viable alternative to private club membership.” says Frum. “But it was more about developing avid golfers through good service and quality instruction. It was never about luring people away from clubs they already belonged to.”
If he listened to his managers at times, Frum might think he was actually forced to play defense against equity private clubs, not offense. “Some of my staff people worry that clubs struggling to bring in new members will suspend their initiation fees and lower their dues to a level equal with our cost structure,” says Frum. “I have to remind them that clubs can’t lowball too many members in, because they have to fund their operations on a limited user base. Plus, they will eventually have to deal with the politics of varied pricing among members.”
Likewise, whenever a staffer suggests to Frum that the rather small member roster at Cyprian Keyes ought to be pumped up, the boss points out the advantages of having lots of green-fee play along with the season-pass regulars. “I joke sometimes, that yes, these people may be our members, but we can’t assess them.”
It’s no joking matter to daily fee operators when they talk about the competition for outing and group business currently taking place among all facility types.
“The bidding competition on outings is increasing, and the private clubs are part of that,” says McNair. “Across the board, in golf fees and group business, we have a problem with pricing integrity that is bad for the future health of the market.”
Daily fee operators who are sensitive about trading on private-club woes for the sake of their own revenues should understand that the clubs themselves don’t turn away new business when a faltering club nearby suffers an exodus. Fox Hopyard, an upscale daily fee in central Connecticut, stayed on the sidelines recently as private equity Woodbridge Country Club teetered on the brink of closing . The beneficiary of a dozens of exiting Woodbridge members has been a neighboring private facility, Race Brook Country Club, according to newspaper reports.
Fox Hopyard, under the reins of PGA director of golf Ron Beck, kept to a strategy of “being upbeat about our own operations and letting our clientele spread the good word,” in Beck’s summation. “Could we benefit if an equity private club nearby happens to lose a lot of members? Obviously, yes,” says Beck. “But there’s a line you don’t want to cross.”
One veteran golf consultant pointed to the New York City market as being surprisingly ill-suited to a scenario in which country-clubbers become a new revenue stream for privately owned public courses. “You’ve got one key ingredient—clubs around New York losing members,” says the consultant. He cited a Metropolitan Golf Association study of approximately 250 private clubs in the New York City area. The survey asked private clubs how much they expected their membership to go down in 2009. About one quarter of them said a drop of 30 or more members was expected. Half said the number of requests for a leave of absence from dues and club privileges had doubled.
Be that as it may, few high-end daily fee courses are close enough to the inner suburban loop to be able to New York club people away. Stuart Lindsay of Edgehill Consulting likens the golf infrastructure in older cities to the rings of a mature tree, and those concentric rings have to be close enough to each other for siphoning of country club people by an upscale public course to really happen. New York’s Westchester County and neighboring Fairfield County in Connecticut are served by equity clubs, town-owned public courses but very little in the way of modern, privately owned public golf.
That said, if the pressure on clubs is strong enough, another possibility in a market like New York presents itself—private-to-public conversion akin to what has happened at facilities like the Tom Fazio-designed Camp Creek course in Watersound, Florida. Or Canyon Country Club in Palm Springs, California—a private club whose financial woes left it so far behind on its lease that it had no recourse except flipping over to public status. Near San Bernardino, California, a club called Apple Valley was deeded over to a town and became an instant muni in exchange for assumption of the members’ accumulated debt.
When the final tally on golf participation for 2009 comes in, what JC Golf’s McNair calls a “small net gain for the public side” at the expense of private clubs may look like a more significant loss for golf, overall, than it really is. Edgehill’s Lindsay says moving from private-side golf to public-side automatically reduces a participant’s total rounds. “You rack up the rounds by playing golf in a club,” says Lindsay. “The same four guys show up and play, with no need for arranging things in advance. They play their golf out of habit, it’s a standing arrangement. Before you know it you’ve got 60 or 70 rounds in the books.”
Private clubs have been facing demographic and cultural changes and the loss of legacy members for years now—since long before the financial meltdown of 2008-09. Will a continuation of club woes make it vital that daily fee managers learn to market to disaffected members of equity clubs?
Or, will this fiscal storm pass and the window of opportunity close? “Higher end daily fee courses have been after the private club member from the beginning,” says Don Rhodes, an industry veteran.
SIDEBAR:
Sean Swidzinski, head golf professional at Olde Stonewall Golf Club, north of Pittsburgh, markets to members at his area’s private golf clubs, though in a seemingly indirect manner. Swidzinski runs a promotion all season long called Member Mondays. To take advantage of it, a golfer must step up to the counter at Olde Stonewall and present his membership card from a private golf club. That card is his ticket to a green fee reduction of about 30 percent on the highly lauded Mike Hurdzan-Dana Fry—for the member and up to three other players he brings along with him.
To some, the Member Monday concept may seem like a predatory move against a sector of the golf community that experiencing major stress. Swidzinski, however, intends the offer as a compliment to club golfers and the fine institutions they represent.
“We’re saying, ‘because of your special status as a private club member, you deserve a unique offer from Olde Stonewall,’” says Swidzinski. It’s impossible to miss the overall suggestion that Olde Stonewall will match its quality and service standards against the area’s top clubs—otherwise the offer would invite derision. And if members of those clubs find they agree, suddenly a viable option to club golf presents itself—on Mondays or any other day of the week.
