Social membership booming at golf venues23rd August, 2012 by Emma Williams
A comprehensive new survey of the golf industry has found that golf clubs have been experiencing a social membership revolution in the last year.
Social members of golf clubs normally experience all of the benefits that full members receive, including entrance to social functions and discounts on food and drink, typically for less than £100 per year, but receive no financial privileges when it comes to playing golf.
Several golf clubs have been keen to expand this category in recent years in order to benefit from revenue streams in addition to golf, which in many cases have proved to be unreliable due to the state of the economy and recent extreme weather patterns.
The Hillier Hopkins survey of 129 golf clubs found that the number of private members’ golf clubs that had a social membership of 100 or more has nearly quadrupled in the last year, from nine per cent of all clubs to 32 per cent. Similarly, the number of proprietary clubs with a social membership of 25 or more has doubled from 20 to 40 per cent in the last 12 months.
“These figures are extremely encouraging as clubs undoubtedly benefit from increasing social membership levels,” said Robert Twydle, golf club partner at Hillier Hopkins, “with a positive impact on revenue.”
Despite the increase in social memberships, the percentage of private members’ clubs that bring in £150,000 per year or more from their bar has dropped from 38 to 28. Bar revenue for proprietary clubs is also, in total, ‘slightly poorer’ compared with 2011, according to the research.
Another trend that the research uncovered is that proprietary clubs have been investing in driving ranges in the last year. In 2011, 70 per cent had one, but this year this has shot up to 87 per cent. Perhaps surprisingly, less than 30 per cent of members’ clubs have a driving range and, of those, just 12 per cent said that they generate at least £10,000 per year for the club.
There has, in addition, been a sharp rise in investments in marketing in the last 12 months. Just over 50 per cent of proprietary clubs spent money on marketing in 2011, by 2012 the figure was close to 90 per cent. A similar percentage of members’ clubs (86) have invested in marketing in the last year.
The survey also found that the number of members’ clubs reporting growth has risen from 25 to 38 per cent over the last two years, but while more proprietary clubs are seeing growth in 2012 (54 per cent), this is sharply down from 67 per cent in 2011. While these clubs have, on average, slightly reduced the price of a green fee in the last year, this income stream is performing well. Over 30 per cent of proprietary clubs say they have generated more than £140,000 in the last year solely from green fees.
For private clubs, 19 per cent reported turnover of at least £1 million in the last year, down slightly from the previous year, while the average club spends £96,500 per year on course maintenance, £154,500 on course wages and intends to spend about £120,000 on special projects over the next 12 months.
Elsewhere, over 60 per cent of proprietary clubs pay their manager at least £40,000 per year, two thirds pay their head greenkeeper £30,000 to £40,000 per year and one fifth pay their PGA professional more than £2,500 per month as a retainer. With private members’ clubs, remuneration is lower: 42 per cent pay their manager £40,000 or more, 41 per cent pay the head greenkeeper £30,000 to £40,000 per year and 42 per cent pay the PGA professional at least £2,000 per month.
The report revealed that the vast majority of members of an average private members’ golf club are older men. Nearly three quarters are gentlemen (the remainder being women and children) while 57 per cent of all the members are at least 50 years old. With proprietary golf clubs, the age profile is almost identical, although the average club has a slightly higher percentage proportion of female members – 23 to private clubs’ 18.
Just 18 per cent of private members’ golf clubs now have a waiting list, while the number of private members’ clubs charging an entrance fee is dropping fast – in 2011 it was 74 per cent, today it is less than 60 per cent. The average joining fee is £1,200.
“While we are seeing some progress, this is not universal across all clubs,” added Robert. “With the right impetus, all clubs can move forward.
“All clubs are changing, introducing reduced dress codes and more flexible joining arrangements, but this is now attracting golfers who want to play rather than occasional players who just wanted to be members of the club.
“This is starting to put more pressure on playing times and availability of the course especially at weekends. Some clubs have already had to move to a tee booking system though this is still a very emotive subject at most clubs. It is interesting to note that successful proprietary clubs are run as successful businesses and if members’ clubs wish to compete in this area they have to consider doing the same.
“It is certainly true that green fee income in most clubs is rising simply because golfers can now play more or less at any club they wish.
“It is pleasing to note that the average surplus in most clubs is now around £31,000.”