private club trends

Rick Johnson [email protected] 303-990-3407

PRIVATE CLUBSTATE OF THE INDUSTRY

In 2005, the golf industry was at its peak with 30 million actively participating golfers in the United States alone. In the past ten years, approximately five million golfers have left the game and 564 golf courses have closed, many of them private clubs, according to the National Golf Foundation. Numerous private clubs have resorted to semi-private status, opening their doors to nonmembers, causing current members to question why they paid an initiation fee and monthly dues when the nonmember have access to the same amenities. The reasons for the decline in golf participation are plentiful, but are primarily attributed to aging Baby Boomers, changing lifestyles, time compression, overbuilding of golf courses and golf course communities and the lingering effects of a troubled economy.

Not long ago, the challenges facing private clubs today were masked by waiting lists, cash reserves, exceptional member engagement and high average spend. Many poorly managed clubs didn’t know they were in any trouble until it was too late. While in many regions across the country the outlook for private clubs is improving, the decline in golf participation has resulted in decreased membership levels, increased dues and assessments, deferred maintenance and a decline in initiation fees for the majority of private clubs.

An experienced management company can put private clubs on a path to success with efficient operating practices, engaging trends and long term strategy all while maintaining the Club’s identity. By investing in an objective strategic partner, private clubs are able to identify, validate and execute the changes needed to thrive.

Private clubs represent the fastest growing segment for full service management companies. Hiring the right partner who can implement best practices, adapt to unique environments and ultimately allow control to stay with the Club is an integral part of the formula for a financially sound, member-centric private club. The benefits of hiring an experienced management company can include:

• Marketing, Sales and Public Relations• Human Resources and Benefits• Operations and Membership Services• Accounting, Financial Controls and IT• Purchasing Power


Based on experience and current trends there are a few key segments, within the overall operation, that ALL private clubs must focus on to remain viable. Membership (retention and growth), Internal Controls (accounting and IT systems), Food & Beverage (current offerings and inventory control) and Staffing (human resources and training).

MEMBERSHIPThis is the life blood of the Club’s sustainability. When you think about your club’s long-term strategy there are a few questions that you need to ask:

• Does your Club have healthy programming to preserve current members?• What is the mix of your membership, Junior, Social, Full, Etc.?• How active is your incentive program for current members?

PRIVATE CLUBSTATE OF THE INDUSTRY

INTERNAL CONTROLSIs there a system assuring reliable financial reporting that is compliant and upheld with a checks and balances process?

FOOD & BEVERAGEThis typically can be the most crucial component of the Club and needs to be addressed with specific guidelines, current trends and professional insight.

STAFF PREPARATIONIs there professional, consistent training and improvement practices offered to your employees to deliver a superior member experience?

These questions bring up several crucial topics addressing membership long term viability. Governing boards are charged with the important responsibility of not only planning the direction of the club and its identity, but also how to make it happen. The outside perspective of a successful management organization is often a worthwhile option and early conversations can provide valuable preliminary due diligence for your board.

Source: The National Golf Foundation

family amenities& activities

less formalclub

reduced feemembershipcategories

37%73%

36%70%

30%64%


KemperSports is a family-owned, privately held company founded in 1978 by James Kemper, Jr. and Steven H. Lesnik. Today, we are a multi-faceted hospitality management firm with over 5,500 employees specializing in the development and management of golf facilities. Currently, we own and operate a diverse portfolio of over 100 golf courses across the country, 24 of those being private clubs.

We provide a strong foundation and support structure to ensure our on-site teams consistently deliver a high quality experience to members and guests while monitoring our clients’ asset. KemperSports has a proven record of creating positive financial results in all market conditions without sacrificing bottom line performance concurrently ensuring that overall control is kept with the board.

Not only do we create experiences that exceed the complex and growing demands of member expectations – we offer tailored management solutions to target, acquire and preserve the right membership - optimizing sustainable revenue, implementing financial controls and maintaining accountability of staff, resulting in club profitability.

As a family-owned company, KemperSports is committed to the idea that one size does not fit all. With the best people in the golf business and industry leading proprietary marketing and management tools, KemperSports delivers a Custom Fit solution for each property we manage. This customized approach allows us to better connect with guests and members delivering a superior connection. Our management approach is dedicated to promoting a sense of ownership amongst staff and a “marketing based” mindset versus the “operations based” that is found at many facilities.

KEMPERSPORTSOVERVIEW

BoardRoom Magazine’s Club Management Company of the Year’ Three Consecutive Years - 2012-2014

More Top 100 golf courses than any other management company

Developed and built 14 golf courses in the last ten years, more than any other company

14

100TOP

2012 -2014

#1 Golf Resort in the Country – Bandon Dunes Golf Resort – Golf Digest#1

AWARDS & RECOGNITION


SUMMARY

KemperSports began managing The Governors Club in mid-2005 providing turnkey management of the Club – an Arnold Palmer design and the centerpiece of a 420-home high-end residential development. Upon assuming management of the property, The Governors Club was underperforming financially, required accounting and expense controls and was experiencing a declining member roster with low member engagement attributable to the “member experience” failing to meet the standards and expectations of the membership. Additionally, the Club’s reputation in the market was tarnished due to a variety of developer issues.

TACTICS AND RESULTS

KemperSports quickly put together a task force to tackle the various needs of the property. A new management team was put into place at the directive of the members. The primary focus was on retaining existing members while repairing the operational issues and significantly improving service standards. Behind the scenes, all business processes along with sales and marketing initiatives were amended to improve results. A series of member surveys, focus groups and special committees were employed to engage the membership and garner performance feedback. A public relations campaign was also initiated to improve market image and perception.

In 2012, KemperSports entered into a long term lease agreement with the Property Owners Association to operate the Club through 2037.

OTHER MEASURES INCLUDED:

CASE STUDYTHE GOVERNORS CLUB

BRENTWOOD, TN

$1M

INCREASED FOOD AND BEVERAGE

REVENUES BY $1M OVER 4 YEARS

NET NEW MEMBERS

SINCE 2009 250

2 MILLION + IN IMPROVEMENTS $2M

• 250 Net New Members since 2009 with over 500 new sales

• 2 million + in improvements to facilities, course and equipment since 2012.

Renovated clubhouse dining facilities including adding private dining rooms

Renovated green complexes

New course maintenance Equipment

• Increased Food and Beverage revenues by $1M over 4 year period with positive margins – department is a profit center.

• Implemented extensive social calendar with a variety of adult and family focused events

• Redesigned website with dynamic content and photos

• Restructured wedding and event packaging with new collateral

•PartneredwithNashvillesportsteamstoleverageclubandsuiteholders at their stadiums


SUMMARY

KemperSports began managing Bull Valley Golf Club in September 2013. Located in one of Chicago’s Northwestern suburbs, Bull Valley Golf Club features an 18-hole championship golf course designed by Dick Nugent that regularly appears on the Golf Digest list of best courses in the state and is considered one of the most difficult courses in the nation. The 25,000 square-foot clubhouse features multiple banquet spaces, locker facilities, golf shop and other amenities. Bull Valley was underperforming financially, had declining membership and required significant changes to the food and beverage operation.

TACTICS AND RESULTS

KemperSports, in conjunction with ownership, brought in a new General Manager and Executive Chef tasked with restoring a failing food & beverage operation and implementing our proprietary programs to improve service levels as well as purchasing power. A key focal point was to address the existing decline in membership while notifying prior members of changes in management and club operations. Based on the early success in F&B, social memberships increased by more than 100% in the first year.

OTHER MEASURES INCLUDED:

CASE STUDYBULL VALLEY GOLF CLUB

WOODSTOCK, ILLINOIS

• Redesigning the entire website with dynamic content and photos

• Developed new collateral for potential membership and updated wedding and special event packaging

• Implemented a dues restructuring to make the club more competitive in the market

• Added more than 200 new members

• Grew F&B revenues by more than $330K in first year

• Doubled A La Carte revenue

• Implemented membership programming events to promote member engagement

• $100K increase in banquet revenue over prior year

$100K

INCREASED BANQUET

REVENUE OVER PRIOR YEAR

NEW MEMBERS 200+

GREW F&B REVENUES IN THE

FIRST YEAR$330K

private club trends

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