No one could have predicted the pandemic nor the unbelievably positive impact the pandemic had on the number of memberships that were sold at private clubs nationwide. There was absolutely nothing private clubs could do wrong as prospective members literally lined up to enjoy the safety and solace of playing golf rather than being sequestered at home. A simple and easy choice for affluent consumers to make.
Arguably, timing could not be worse for private clubs as it pertains to their pricing decisions over the past three years. We enter the new year with basically every club in the United States having raised their dues, initiation fees and green fee rates to alarmingly high amounts. The price increases did not follow the CPI, they followed emotion in the Board Room.
Private clubs used massive interest in golf and private club memberships, due basically to the false pretense of reality, to substantially raise prices on everything at their private clubs apart from their marketing budgets. Who needs to invest in marketing a business when you are having to beat off prospective members with the proverbial stick? Warren Buffet said it best……….“be fearful when others are greedy and greedy when others are fearful.” Where do you think the private club industry finds itself currently with regard to the wisdom of The Oracle of Omaha? Private club leaders remain very greedy as to their pricing policies with little to no concern for attrition or selling memberships.
Consumers are clearly tightening their belts due to:
Higher interest rates
A down stock market
High inflation and, most importantly,
Not using their private clubs as much as they did during the pandemic.
The ripple effect from these converging circumstances may very well impact:
Retention of private club members
The amount of golf played by private club members
The recruitment of new private club members (waiting lists will be depleted soon).
Now is the time to make the necessary investment in your club through a strong marketing budget and marketing efforts. Fish won’t be simply jumping into your boats in 2023. Some private clubs will be luckier than others in 2023.
How lucky will you and your club be?