EDITOR’S MEMO
Spending & Burning AFTER THE CLUB industry took a couple of months earlier this year to catch its collective breath from the initial shock of the coronavirus outbreak, we have since published a steady stream of news reports and feature articles, and prepared a series of “The Road Back” videos (https://clubandresortbusiness. com/category/the-road-back/), that have all highlighted upbeat reports on strong activity levels, sizeable membership gains and—most surprisingly—continued investment in facilities and golf courses at all types of club and resort properties throughout the U.S. To see just how deep of a trend these reports on spending reflected—and how likely it was to continue—we recently conducted a larger survey of club managers on their current and future capital expenditure activity. We’ll publish a more detailed report on the findings in an upcoming issue, but here are some notable highlights: • Asked if their clubs executed planned capital projects in 2020, 79.9% of the responding managers said yes. • Asked to describe their financial position as a result of COVID-19, 56.6% said they were still operating profitably, 31.4% said they were breaking even, and only 11.9% said they were operating at a loss. • Asked to project their capital spending for 2021, 69.2% said they expected it to increase, 17.6% said they expected it to remain the same, and only 13.2% anticipated a decrease. • We then asked for an indication of the range for which capital budgets would be set for 2021, and these two ranges polled the highest: - $1 million-$3 million, 35.2% - $3 million-$5 million, 29.6% (greater than $5 million was also selected by 2.5% of the respondents). • Over two-thirds (66.7%) of the respondents said major golf course im-
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Our survey results on current capital spending activity and future CapEx plans had a business-as-usual tone— with the business looking pretty darn good. provement projects will next take place at their property within a year. Almost 70% said the same was true (within a year) for their next major clubhouse/ facility improvement project. We also asked for details about what the golf course and clubhouse/facility projects would focus on. Greens and drainage/water management projects stood out as the biggest priorities for golf courses, and dining venues and furnishings were cited as the top focus for clubhouses/facilities. But in both cases many other areas were also cited, indicating these aren’t emergency fixes, but part of planned, strategic improvements. We also asked the respondents to rank what they saw as their biggest forthcoming challenges in 2021. Attracting new members scored the highest, followed by retaining current members, building a balanced budget, assessment issues related to budgeting shortfalls, and
prioritizing capital projects. All in all, the survey results had a business-as-usual tone—with the business looking pretty darn good. And I dare say that if we’d asked those same questions 12 years ago after the Great Recession took hold, “just surviving” would have ranked highly among the biggest upcoming challenges, even if it hadn’t been offered as a choice and could only be given as a write-in response. Feeling the Burn While the results of our capital spending survey reflected an encouraging present and future outlook, that certainly doesn’t mean there aren’t still plenty of things to get worked up about in the club business. This issue features the debut of three new regular “Burning Issue” columns, for Management (pg. 10), Membership & Marketing (pg. 11) and Golf Operations (pg. 9). After skipping December’s special Top Innovators issue, all of these columns (plus others on occasion for operating areas such as fitness, technology, golf course maintenance, and more) will be regular monthly features in C+RB. So if you and/or others on your staff want to take a turn sounding off, let us know, and we’ll reserve your space.
Joe Barks • Editor jbarks@wtwhmedia.com
November 202O
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