RICK COYNE Rick Coyne is president of ClubInsights. He can be reached via email: rcoyne@clubinsights.com
CASE STUDY
Euphoria – A Mixed Message In few cases are we enabled to transition from major catastrophe to a windfall of business prosperity, particularly in an isolated and niche market like private clubs. Yet, the COVID-19 pandemic, with its mass business closures, sequestering and a loss of personal flexibility to travel and freedom to assemble, may have unleashed what is shaping up to be a perfect storm of incredible upsides. Okay, so here comes the pessimist: “But will they last?” By most surveys, we have increased the number of clubs with waitlists of members from approximately 17 percent to over 60 percent in less than a year. Demand for golf has been the highest in 17 years. Utilization of club amenities and facilities is over the top, especially on the golf course. Clearly, anyone can point to the obvious reasons. Pent-up need to socialize and be outdoors. Inability to take family vacations but needing that safe-haven “family fun” place to share. Working from home provided availability of time to participate. OK, so here comes that pessimist again: But why hadn’t they joined before now and will they stay? The amazing care clubs took of their members as COVID-19 shutdowns began contributed to the trust new and existing members have for the club. It was truly amazing to see the outrageously creative and fun programs initiated during the shutdowns, from drive-in movies serviced by bellhops in the club parking lot to gourmet meals to go, along with specialty drinks of the day. Members’ sense of community and trust in the club skyrocketed. While some members maintained a wait and see attitude about quickly reestablishing their social rhythm at the club, most have eagerly resubscribed to their respective sense of normalcy. Have you tracked your new members’ usage and engagement? If it differs from long-term members, are you seeing trends emerge? Engagement of members and onboarding programs to ensure appropriate ingratiation of members will be critical to retaining these new members as things hopefully return to normal. Whether it’s COVID-19, the resultant restrictions and mask mandates or the ever-present political issues, potential problems remain that can be devastating to membership, cash flow and the future of clubs. Some areas are experiencing significant out-migration. 12
BOARDROOM | NOVEMBER / DECEMBER 2021
The reverse is true for destination areas such as Florida, which now have shortages of real estate for sale. Texas is seeing waves of in-migration and real estate shortages. Many urban areas are seeing out-migration to the country. How does this movement affect you and your long-range outlook? What effect will tax increases, potential negativity around club membership, critical race theory, and increased crime have on clubs? Will the patterns of crime continue to spread? What will happen relative to more workers working from home? What does the club need to do to make these conditions more secure and helpful? This area alone is a treasure trove of opportunity if you look strategically. OK, when you consider strategy, eyes should be wide open to the entire gamut of pluses and potential negatives. There has always been an up and down movement in this and other industries. They’re called “life cycles” and golf/private clubs have experienced four in the past 120 years. They start with high growth, then slow growth, maturity and decline. COVID-19 may have indeed started the fourth life-cycle period of high growth. Perhaps the most important concept today is maintaining peak levels of performance never forced into returning to decline. Your strategy should be your guide. If you have honestly evaluated and resolved all of these contemporary concerns, if you have addressed and subscribed to the member experience driving every good thing that follows, and if you are willing to drive toward the pinnacle of growth and remain there, there may never be a better time than now. Euphoria suggests a manifest condition that will last forever. History tells us otherwise. Therefore, it is not a time to be euphoric. Rather it is a time to be strategic and calculating. If you’ve had excellent growth and participation, use the cash flow to identify and enhance your offerings. Expansion of services does not always mean total master planning of your campus. So, unless it’s time to take on that expense, be frugal and use the extra cash to build reserves. Look at the many things that are simple, fun and engage members. Bocce, pickleball and using your practice range for target golf league play are simple, easy and social, all of which are important to your members’ enjoyment. It also builds brand relevance and membership value. The private club industry is in a reasonably good place today. Use your resources wisely. Find the right people to provide your service delivery system, empower them, make them feel as important as they are, cultivate growth from within and rebuild into a stronger and more disaster-proof organization that remains rock solid through the best and worst of times. While it’s easier to simply relax and take advantage of the current positives, only through strategy will you ensure its ongoing presence. Smart people make smart choices. B R
