Club Membership - entrance levies....

SalthillGuy

Given the financial crisis, I hear that clubs are considering dropping their entrance levies on a temporary basis.
This will not sit well with those who have paid through the nose to join in previous years.
I think a number of clubs will go to the wall this year.

slumped

I agree that clubs will suffer - but my view is that clubs (in the traditional sense - not private commercial operations with a members club attached) should survive as follows


Number of Members x Annual Subscription = Income

Running Costs - Income = Break Even

For example, take Club A with 800 members and an annual subscription of €800

Income = 800 members x €800 = 640,000

Maintenance (18 holes @ €20,000 per hole) = 360,000 including salaries

Manager, Admin Staff = €100,000

Light/Heat etc. = €40,000


That's showing an excess of 140,000 per year - so allow another €100,000 for "other" expenses such as insurance, print, postage, phone, legal, bank charges etc.

and the club should still have 40,000 left.

The problems arise where clubs have left themselves with huge loans from building new clubhouses or extending the course.

In both cases, if clubs are clever, they will have entered into variable rate agreements and should be able to renegotiate long term loans.

I don't see how private clubs will "go to the wall". If any clubs do go to the wall, then they will be mis managed, private enterprises.

S

Mister Sifter

SalthillGuy wrote: »

Given the financial crisis, I hear that clubs are considering dropping their entrance levies on a temporary basis.
This will not sit well with those who have paid through the nose to join in previous years.
I think a number of clubs will go to the wall this year.

Thems the breaks i suppose. From what i hear a few more course will be offering annual membership without voting rights. That way existing members who paid a big joining fee will have the voting rights, but new members will just have playing rights.

I don't think it will be near as mad for the majority of clubs as people are predicting either. Particularly in the main urban centres.

ShriekingSheet

SalthillGuy wrote: »

Given the financial crisis, I hear that clubs are considering dropping their entrance levies on a temporary basis.
This will not sit well with those who have paid through the nose to join in previous years.
I think a number of clubs will go to the wall this year.

To be honest I find this a fairly sensationalist point of view. Entrance fees are on the slide, and on the verge of extinction due to market pressures. There's an increasing number of great deals on offer in various clubs as a result.

While a number of clubs expected substantial joining fees coming in year on year, there are very few who banked on this to such an extent that if it didn't materialise they would go to the wall.

Sure, they might not have the ready cash for course or clubhouse improvements etc, but to say that due to the boom coming to an end they're now in serious trouble is an exaguration IMO.

Golf clubs have survived for over 100 years in Ireland, through times where the game was a hobby for a tiny minority of people, annual subscriptions were small and there were absolutely no joining fees.

Assuming the current downturn endures, there will be serious challenges for places like Bunclody and McCreddin, given their unfortunate timing of completion but who's to say the financial gearing of these courses is not robust enough to withstand a quiet spell with only a few members?

I agree with SalthillGuy that one or two clubs might wrap up altogether but the amount of bar-talk around at the moment suggesting a considerable amount of clubs are "going to the wall" is ridiculous.

As we've said on the board before, I think there's a "did you hear about them accross the hedge" factor here.

ShriekingSheet

I made my post while Slumped and G1982 posted theirs. Fully agree with them both.

stockdam

I think too many clubs had big ideas and wanted fancy facilities. My own club spent millions on an extension to the club-house and putting a new roof on. The club is half empty most nights and in my opinion it was a total waste of money. The price escalated to double the original costs - who paid for that overspend (yes the members). I'm about to resign because it's costing me far more than it would if I just paid green fees every time I played.

I don't want fancy club-houses - just a good course.

JCDUB

Clubs go to the wall

To those who paid large joining fees, that's a risk they were willing to take at the time, it's like buying a house or anything else, the market is subject to fluctuations, some you win, some you lose.

Our own club had debates about a new clubhouse over the last few years, and thank God we decided against it, even though our clubhouse is in poor condition. It was the right decision, considering the predicaments some other north county clubs find themselves in, and at the end of the day standard of course is far more important than standard of clubhouse.

SalthillGuy

IMO most golf clubs are poorly managed.
They use an annual / voluntary committee system, where there is not enough continuity in any position.
That was ok when clubs were small and there was enough revenue generated from membership go keep the club afloat.
Many clubs now depend on green fee revenue and the marketing expertise is lacking to generate green fee / society revenue.
Many golf clubs have also embarked on long-term development programmes (course development / new clubhouse) as times were good for the past number of years. Most are those are on longterm commercial loans. Membership (falling membership) fees will struggle to keep up repayments.
I know several nine hole courses that have gone eighteen holes. Huge investment and very limited membership.
As time get tough and money becomes scarse, the golf will be less and less important. Many will revert to society golf, playing once every few weeks.

WaldenByThoreua

Yep, a club Im a member of is in the process of hitting the wall...

Entrance fee was abolished in the last two weeks ( was a significant 4 figure sum)......course was re-designed a few years ago with a lasting legacy in the form of a large bill...

The place is enclosed by houses and the sewage was never done properly when the houses were built and now it costs 6K a week to remove the waste......its a director run club (a business essentially) and theres some bad rumours going around

JCDUB

Sorry Ruggiebear, I thought it was done and dusted.Oviously not..

Ya gotta feel for members of clubs in difficulty though, they're gonna be the real losers.

atourdeforce

I believe that clubs dropping their charges for membership is a good idea especially for the enthusiastic golfers who dont have the available funds to pay the ridiculously high prices that clubs charge especially the ones in dublin. It should hopefully open the doors to more people with raw talent and ability for the game rather than a closed door for those who like to flash their cash and show off to their girlfriends.
Perhaps originally it was a gentlemans game however everyone should be given the chance to play for a club no matter their backround and high prices clubs set without doubt slams the door for those on the lower incomes. With any luck it might even bring the standard of irish golf up to higher standards.

It may not sit well with those members who have already paid their entrance fees however the overall outcome can only be good for irish golf as a whole.

Rob.

copacetic

I does seem unlikely that any club (except for say the top 10 cash rich ones) will be able to charge a joining fee over the next year or so.

Anecdotes abound about courses who have members not able to pay their sub so they basically just giving up their memberships. How prevalent it is who knows?

This is probably the real worry for the clubs, joining fees are often a one off money earner for course upgrades etc. Yearly subs are generally operating income, this would be a concern over the next year for most clubs. This year was a bad one for green fee income too, with the weather and the downturn equally responsible.

This is the reason why you will see no joining fees, people leaving clubs will need to be replaced and they are unlikely to be so with joining fees. Would expect that most clubs could easily fill up with members if they didn't charge joining fees. So wouldn't expect any members own clubs to be in too much trouble.

stockdam

I resigned from my club last night.....I've been there for more than 25 years.

I can no longer justify the expense and will just pay green fees whenever I play.

Mister Sifter

That's a shame...

Interesting new feature on GUI website, which could be very useful if used by clubs.

http://www.gui.ie/news_detail.asp?area=1&id=1923

copacetic

stockdam wrote: »

I resigned from my club last night.....I've been there for more than 25 years.

I can no longer justify the expense and will just pay green fees whenever I play.

Sorry to hear that, I've heard similar from a few people, hard to know is it statistically significant or not as yet. GUI member figures next year will tell a lot.

stockdam

No need to be sorry guys. I travel between Dublin and Belfast and I don't have the time during the week to get any where near my club any more. At weekends the kids take up a fair amount of my time. So it's not just a financial decision.

I'm going to apply for a country membership in Dublin as that's where I will be able to play most so all is not lost.

SalthillGuy

IMO very few clubs survive on membership revenue.
Green fees and societies are vital.
I know there are old clubs with lots of dosh, but you average club is struggling to break even.
The clubs that have undergone major development in the last five or so years, thinking that new membership / green fees would fund it, will have some work to do to balance their books.
Those are the ones that are in danger.