European golf club trends

Golf Business Monitor and Global Golf Advisors’ Rob Hill examine key trends and data that could help you plan and make business decisions that will ultimately benefit your business.

Through our numerous assignments and research initiatives at Global Golf Advisors over the last twelve months, we have encountered both unique challenges and consistent trends at golf facilities throughout the EMEA territory. Here, we identify four that are particularly noteworthy for their influence on current golf facility performance at European Clubs.

Capital Maintenance trends

Capital maintenance, capital improvements and the funding of both are amongst the greatest challenge facing golf facilities now and are expected to continue to be so into the immediate future. 40 per cent of clubs are reporting that they have more than three years’ worth of deferred capital maintenance and expenditure, largely a consequence of economic recession/stagnancy between 2009 and 2015.

Long-term capital planning is rare, with most clubs lacking a formal plan to fund capital requirements, using whatever cash is available each year to fund their reserves. Less than 50 per cent have a capital reserve study in place informing long-term capital requirements. Of those that are investing in capital, almost six in ten are using a combination of debt and membership levy to fund their programs. Clubs spend on average 7.6 per cent of gross annual revenue on capital maintenance but estimate they need to spend 9.6 per cent to keep pace with capital maintenance.

Women make the ‘buy’ decision

Historically golf clubs have been institutions that served male viewpoints, wants and needs. New programs and services are changing membership structures, methods of club governance and the feasibility of many clubs.

In her book, ‘Marketing to women’ Martha Barletta indicates that 91 per cent of home purchase decisions are made by a woman. Typically, the club membership decision is a part of the home choice decision due to location, psychographic and demographic profile.

As such, clubs must reset membership programs to address the primary push/pull factors that influence the buy decision. Women prize their clubs as a platform for socialisation. Clubs must demonstrate in clear and appealing ways that the lifestyle of the club is diverse, active and accessible for busy women and their families. Sales and marketing tactics in forward-thinking clubs are seeking to address schedule flexibility, interesting and current programs and the opportunities for meeting and keeping friends.

Sustainability

Last July, London’s new Mayor Sadiq Khan announced a ‘crackdown’ on pollutants. His goal is to, “Make London one of the World’s most environmentally friendly cities”. His plan to achieve this goal includes amongst other things creating an ‘Ultra-Low Emission Zone’ in central London by 2019 and beyond central London by 2020.

The fact that Mr. Khan has placed this issue near the very top of his agenda, is a great indicator of just how much influence sustainability and environmentalism has on the public mindset – politicians don’t tend to tackle issues unless they are going to improve  their popularity.

Many clubs are now rightly keen to present their sustainability credentials, but to have resonance, consumers want to know the details/specifics and the outcomes. For clubs, this means their efforts in this space should be measured and proactively reported, with the support of a trusted third party.

The Golf Environment Organization is doing extraordinary work in supporting clubs achieve exactly this. Their club tools are not just providing vital guidance on best practice for sustainable performance, but are now also providing measurement and reporting tools to aid in effective communication of the results of such performance.

Membership

Gone are the days when most clubs were operating with waitlists and a pipeline full of members lined up to join the club. The reality is that most clubs must now aggressively seek and find new members. Successful clubs are adopting a more data-driven approach to membership recruitment/retention and are adjusting membership and amenity offerings to be more competitive in their business space.

61 per cent of clubs map the location of their members to identify trends and areas for new member growth. Global Golf Advisors recommends that clubs do this annually to maximise membership sales effectiveness.

Six in ten clubs have encountered challenges with an aging membership or growing senior member category. Two-thirds of this group has adopted a set of tactics to address these challenges, among which adjustments to age bands and entry fees are most common solutions.

More than one in four (28 per cent) clubs have experienced a decline in their total number of members in the last five years. The annual attrition rate of clubs in the UK is 3.5 per cent while in the rest of Europe that rate is 4.7 per cent.

Trends such as these, although not universally applicable, are highly valuable indicators of change. The capacity to be prepared for change and take advantage of the opportunities that come with it, is what marks a successful club. Best put by Darwin, “It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable  to change.”

This article was originally published on www.golfbusinessmonitor.com and is reused thanks to the permission of Rob Hill from www.globalgolfadvisors.com and the publisher of Golf Business Monitor, Miklós Breitner.