Recovery Shots

Golf is all about making adjustments. These days, that’s even true for country clubs.

It’s been a rough time for businesses throughout New Jersey. Even the state’s private country clubs have not escaped the pinch. Here’s a look at how four clubs have adjusted to the current economic climate.

Forsgate Country Club, Jamesburg

Forsgate general manager Det Williams saw signs of trouble in late 2007, which manifested themselves by the end of last year. “We usually have a natural attrition rate of about 5 percent a year,” says Williams. “That pace was doubling in certain categories—primarily among families and individuals.”

The club, which has 600 golf members, also saw a spike in leaves of absence. Its outings business has likewise suffered. “Outings that have been repeats for years haven’t come back, and some of the strong ones that were well-entrenched have seen the number of players go way down,” Williams says.

Forsgate has had two main responses. The first was to redouble its efforts on the service side and, in some cases, re-pricing catering menus or golf outing costs. The second was to change the pricing structure for new members without altering the final outlay (and thus upsetting current members). Prospective members can now pay the $13,000 non-refundable deposit over four years, with the first installment due a year from the initiation date, or pay interest only for up to four years; what’s more, $1,500 of the $4,000 initiation fee has been deferred until the end of the recession, which the club defines as two consecutive quarters of GDP growth. “The response hasn’t been overwhelming,” Williams says.

The only bright spot? “The biggest indication of improvement is that some people who went on leave are asking how to get their status back,” he adds.

Jumping Brook Country Club, Neptune

Director of sales Diana Smith was worried by the number of members asking for extensions on their renewals at the end of 2008, often due to uncertainty regarding their jobs. “We did much better than expected in the long run,” Smith says. “We were less than a dozen short of our anticipated renewals.”

The club’s bottom line was greatly aided this spring by a mass defection of ten members from a nearby private club with annual dues that ran two to three times Jumping Brook’s $6,150-$6,500. (“A good day in the sales department,” Smith slyly noted.) JBCC’s individual initiation fee is $5,000, although there are discounts and other incentives available to people who bring in other new members. In fact, the club’s owner, Matrix Golf & Hospitality, is willing to get creative in making deals with current and prospective members.

“I want to find out what somebody’s hot button is, what they’re looking for in a club, and customize my sales plan rather than put an ad in the paper with a huge banner that we’re waiving initiation fees,” says Smith. “That might be a complimentary membership for a spouse or teenage son; it might be complimentary guest passes for corporate members. Everyone has a different buy-decision.”

Olde York Country Club, Chesterfield

General manager Eric Quinn says that 12 percent to 15 percent of Olde York members decided not to renew for 2009, about 4 percentage points more than 2008 (8 percent to 10 percent is the industry average); the larger financial impact resulted from many members trading down from full golf memberships to less expensive sports memberships. (There are stipulations and fees attached to doing so; as Quinn notes, it is much more expensive to acquire new members than to keep current ones, even at lower outlays.) The club was hoping to sell 20-25 memberships for the year but has thus far only sold about a half a dozen sports memberships and three full golf family memberships.

For all this, Quinn says that things could have been far worse had operator RDC not invested heavily in the club when it took over in May 2007, bringing the golf course conditioning back up to snuff, as well revamping the food and beverage operation, putting flat-screen TVs throughout the clubhouse, upgrading the aquatics center, and adding an activities coordinator for kids during the summer.

“We’re fortunate in that RDC has spent a lot of money to create more of a family environment,” says Quinn. “It’s become more of a family decision [to renew membership], not just the golfer in the family.”

Olde York hasn’t altered its $17,500 non-refundable initiation fee, but it has created new programs to stretch out payment terms and begun accepting credit-card payments. The club has also started some cost-cutting efficiency measures, such as closing Mondays and Tuesdays during the winter and eliminating the sparsely attended Tuesday dinner.

“Those savings add up throughout the year and don’t really impact the member experience,” says Quinn, who says that members seem intent on getting more out their memberships this year—skipping vacations to be at the club instead.

“That’s a positive thing for us,” he adds. “It allows our staff to keep working and for us to continue to improve.”

Royce Brook Golf Club, Hillsborough

Royce Brook has two courses, one public (East) and one private (West). The approximately 400 RBGC members have preferred access to the East. The club is unusual in that it only offers rolling annual renewable memberships; there are no initiation fees. Despite this policy, Joe Livingood, senior vice president of Billy Casper Golf, which manages Royce Brook, says that the club’s retention rates declined just slightly this year. Livingood credits additional member events (such as socials and tournaments), a new promotion offering fifteen months for the price of twelve, and the decision to let members pay their dues in two installments instead of all upon joining.

“People are starting to look at the value component for the first time in a long time,” says Livingood. “We’re competing against clubs that have suddenly gotten very creative. Whereas a year ago you had to write a check for $50,000 to get in, now they’re saying, ‘You just put down $5,000 and we’ll finance the rest over 10 years.’ The obstacles to getting in are much lower, but there’s still that commitment. Royce Brook doesn’t use that model.”

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