Tag: COVID

Mid-Year Predictions for the Second Half of 2021

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At the start of the new year and in the spirit of planning, the thought leaders at GGA Partners sat down to predict what we believed to be coming throughout the year and shared our 2021 Predictions on the Shape of the Next Normal. Now, halfway through 2021 with the spring season in the books and summer underway, we reconvened GGA leaders for a mid-year check-in on predictions for the latter half of the year.

1. Ensuring fair and equitable access to amenities remains top of mind, especially on the golf course

A trending topic throughout the industry is golf’s demand surge and how long it will sustain, much has been written on this point and those who are closely watching rounds played metrics anticipate a clearer reading by the end of the summer.

Stephen Johnston, GGA’s founding partner, expects that private clubs will see the surge continue to elevate rounds played by members which will likely increase issues relating to compaction of tee traffic and accessibility.  He predicts the benchmark regarding average number of rounds per member to be higher by approximately 10% following the pandemic and also increased golf course utilization by members’ spouses and family members.  Both factors will create a greater demand for tee times at private clubs.

Johnston believes some clubs may need to consider permitting round play by fivesomes instead of foursomes, potentially catalyzing logistical challenges such as a greater need for single-rider power carts in order to maintain speed of play at the same rate as foursomes with all players using power carts. For club managers and course operators, this entails an increased need for current and detailed evaluation of the benefits of membership and the relationship between playing privileges and the practical ability to book a tee time and get on-course.

2. Effective demand management is key and will shift from agile, flexible approaches to new operating standards as demand stabilizes

During the pandemic and throughout 2020, many golf, club, and leisure businesses recognized the increased need to more accurately and routinely measure the utilization of amenities, adapting operations management to react quickly to change.

Craig Johnston, head of GGA’s transaction advisory practice, anticipates an evolution in this one-day-at-a-time, agile monitoring approach into a new and more formalized standard of operating procedures.  “At the start of 2021, we said we would see clubs provide flexibility and experiment with various operational changes,” he explained.  “With the pandemic feeling like it’s steadily moving toward the rear-view mirror, members will be expecting clubs to begin instituting the ‘new normal’ operations and the data compiled by clubs in the first half of the year will be critical to deciding on the new normal.”

Johnston believes that membership demand will continue to be strong through the second half of the year and that it is likely utilization will reduce marginally as members begin travelling again for work and social obligations.  Even with a marginal reduction in utilization, demand for private club services will remain strong and will continue to put pressure on capacity and access in most clubs.

Senior Partner Henry DeLozier encourages club and facility operators to embrace short-term continuations of high demand while keeping an eye on the future and the non-zero probability of a demand shift in the coming years.  “Clubs must create pathways to sustain demand while navigating utilization volume.  It is unwise to place hard or irreversible limitations on capacity while clubs are at historic maximums for demand and usage,” cautioned DeLozier. “Clubs will do well to establish a clear understanding of demand and utilization to enable innovative programs which serve to fill periods of low demand in the future.”

3. Ongoing uncertainty about the pandemic’s long-term impact on club finances will increase the review and reevaluation of club financial projections to ensure sustained budget flexibility

While data regarding utilization, participation, and engagement throughout the summer months continues to be captured and consolidated, business leaders should not delay their financial planning and instead get to work on reevaluating finances and updating their future forecasts.

“Now is the time to review, evaluate, and reset club debt levels,” emphasized Henry DeLozier. “Clubs need to recast financial projections based upon elevated joining/initiation fees arising from high demand.”

In support of alacrity in financial planning, DeLozier notes that labor shortages spurred by the pandemic will increase payroll-related costs at a material level. He also predicts that comprehensive risk review is needed at most clubs to evaluate possible impacts arising from cyber-crime and/or declining club revenues during 2022.

Beyond internal shake-ups in utilization or operations, club leaders should be anticipating external impacts that could impact their financial plans.  A hypothetical example raised by DeLozier is if the U.S. economy were to become more inflationary.  In such a circumstance he believes clubs would see an increase in the costs of labor and supplies which would necessitate increases in member dues and fees, a deceleration of new-member enrollments as consumer confidence dips, and a slight slow-down in housing demand.

Right now, uncertainty remains with respect to the virus as well as the resulting economic impact from the pandemic. From a financial standpoint, clubs will do well to advance their forward planning while retaining budget elasticity.  “It will be imperative for clubs and boards to build flexibility into their budgets and agility into their operations,” added Craig Johnston.

4. Existing governance practices, policies, and procedures will be revisited, refurbished, and reinvigorated

A litany of new ways of operating and governing the club arose as a result of the pandemic, some of which suggest an efficacy that can be sustained in a post-pandemic environment.  Essential to assimilating these adaptions into new standards of procedure is a review of existing governance practices and the documentation which supports them.

“At a time when boards can measure the full range of financial performance metrics, updating club governing documents is a primary board responsibility,” noted Henry DeLozier.  “Board room succession planning must be formalized to prepare clubs for the inevitable downturn from record high utilization.”

In considering the nearly overnight adoption of technology tools to enable remote meetings and board-level deliberations, partner Michael Gregory noted a substantial increase in the use of technology tools that go beyond virtual Zoom meetings.  “The pandemic has allowed clubs to test online voting,” he explained.  “For many clubs, once things return to normal, their bylaws won’t allow for the continued execution of online voting unless they make changes.”

“We have seen the adoption and implementation of online voting to be a huge success for the clubs who have tried it for the first time,” said Gregory. “Members love it, it’s easy, it’s convenient, it leads to higher participation from the membership, and many clubs are in the process of changing their governing documents to allow for online voting as a result.”  The challenges and opportunities of employing online voting are detailed in our piece on taking club elections digital, which features a downloadable resource that can be shared among club boards.

5. In human resources, expect to see deeper reevaluations of compensation structures and employee value propositions

Weighing in from across the pond, Rob Hill, partner and managing director of GGA’s EMEA office in Dublin, predicts that club leaders will face bigger challenges in human resources throughout the remainder of 2021.

The first of three particular items he called out is a reevaluation of compensation.  “Making decisions about employee pay is among the biggest challenges facing club leaders in the wake of the coronavirus shutdown,” stated Hill. “As they begin compensation planning for the rest of the year and into 2022, these leaders not only have to consider pay levels, but also the suitability of their mission and operating model to thrive in a post-pandemic world.”

Citing his recent experiences in the European market, Hill shared that club leaders are challenged with finding new ways to operate smarter and more efficiently, while also looking for innovative ways to implement sturdy, low-cost solutions that their employees will love.  Which leads to his second point, that there will be a renewed emphasis on what employees love and how clubs, as employers, can provide an enhanced value proposition for their employees.

“As employees get back to work onsite, employers are finding that what their people value from the employment relationship has changed,” Hill explained.  “Where pay has been viewed as largely transactional in the past, clubs may need to provide new types of benefits, especially programs that provide more flexibility, financial security, and empowerment to retain and motivate their people.”

Lastly, there is likely to be considerable movement of talent over the coming year brought on by employees’ new work-life ambitions and financial imperatives, said Hill, “As demand for their skills and experience grows, the very best talent will seek out employers that demonstrate they view employees not as costs but as assets and reflect this in their approach to compensation.”

Recalling our start-of-year prediction that the movement of people and relocation of companies will reshape markets, partner Craig Johnston added, “The relocation of people continues to be a prominent trend and one that is likely to continue in the second half of the year.”  For club employers, it’s not just the changing physical locations which impact the cost and supply of labor, but also the expectations of employees as they seek out competitive new roles and work experiences.

6. The repurposing and reimagining of club facilities, amenities, and member-use areas will continue

The pandemic pushed to the fore the need for clubs to adapt their facilities to match changes in the ways members use and enjoy their clubs.  A combination of practical evolutions for health and safety and circumstantial evolutions drawn from widespread ability for members to work remotely created increased desire for clubs to offer more casual outdoor dining options and spaces to enable members to conduct work while at the club.

Partner Stephen Johnston believes these sentiments will continue to near-term facility improvements at clubs.  “With more flexibility in the workplace and members working from home periodically, there will be a need at the club for members to do work or take calls before their tee time or their lunch date,” he said.  “It has been evident for some time that members generally prefer to enjoy outdoor dining and since, throughout the pandemic, it has become apparent that guests draw greater comfort in outdoor experiences, I see a greater demand for outside patio and food and beverage service.”

As society begins to reopen and communities begin to stabilize, time can only tell precisely how clubs will continue to evolve their operations, whether that be scaling back pandemic-relevant operations or doubling-down on new services and efficiencies.  Evident in our work with clients are significant efforts to reorganize club leaders, reevaluate operations, and retool plans for a successful future in the new normal.  Here are a few highlights of efforts clubs are making for the next normal:

 

  • Reinvigoration of governance processes and engagement of leaders to ensure alignment between boards and club strategic plans.
  • Renewed surveying of members to keep a pulse on how sentiments have changed from pre-pandemic, during pandemic, and currently as communities stabilize.
  • Enhanced adoption and application of electronic voting as clubs reevaluate membership structures, governing documents, and operating policies amidst “displaced” members.
  • Reconfiguring of budgets, capital plans, and long-range financial models.
  • Refinement and advancement of membership marketing strategies, tactics, and materials.
  • Tightening relationships between facility planning, capital improvements, and member communications campaigns.

Staffing For Success: Part 3

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Game Plan – Henry DeLozier‘s monthly column in Golf Course Industry Magazine – continues its series on staffing for success with the third of three installments. After looking at how the pandemic has afforded club and course managers the opportunity to reevaluate their teams (Staffing for Success: Part 1) and strategies for finding and hiring the right team members (Staffing for Success: Part 2), we turn to creating a culture that inspires and retains top performers.

Culture: The Secret Sauce of Success

A Supreme Court justice once defined obscenity by not defining it. “I know it when I see it,” Justice Potter Stewart famously said in 1964. It seems that an organization’s culture might fit into the same category: difficult to define, but obvious once illuminated.

The difficulty in defining organizational culture is because it is so many things at once. An amalgamation of personality, values, reputation, purpose, style and traditions framed by a set of written and unwritten rules developed over time and considered inviolable. Put them all in a pot, let them simmer for a while — a few years or maybe a few decades — and what’s left is culture!

Culture then is nothing less than an organization’s heart and soul, and its importance rivals any other asset or advantage. It is the glue that holds the organization together. It inspires loyalty in employees and motivates them to act consistently and pridefully. It influences them to perform at a high level because they feel a responsibility to uphold their end of the cultural bargain.

Culture is also an important factor in retaining top performers. Randstad, the international employment and recruitment firm, lists toxic cultures with poor pay, limited career opportunities, lack of challenging work, lack of recognition and work-life imbalance as the leading reasons people leave their jobs. There is an urgent need to pay attention to the culture growing around your club or course or risk losing top talent.

If this amorphous entity known as culture is so critical, what steps can you take, what keywords can you prioritize for search engines and what KPIs do you elevate to bake it into your organization? If only creating or transforming culture were so easy. Every winning culture is part of a unique set of attributes and characteristics that cannot be invented or imposed. It must be discovered from within.

But that doesn’t mean you should sit back and wait for culture to reveal itself — or for it to form in ways that could be detrimental to your future success. The road to a sustainable and winning culture ensures that employees:

 

  • Understand the club’s/course’s vision and how they contribute to it. When everyone knows where their leaders are steering the ship, it’s much easier to get people onboard and for employees to feel good about rowing.
  • Know how their performance is measured and what their personal success looks like. What results are expected? Are there both quantifiable and qualitative measures?
  • Are consistently recognized for contributions that meet and exceed goals. Nothing is more motivating than recognition in front of colleagues.
  • Recognize a commitment to diversity and inclusion. Employees of color and minorities want to see evidence that their opinions and work is valued and that they’re on a level playing field.
  • Feel that their managers are taking steps to safeguard their health and well-being. In a post-pandemic world, employees want to feel confident that their job is not putting them and their families in danger.
  • Are rewarded through a set of personal, flexible, creative benefits. Baby boomers, millennials and Gen Xers think about benefits and perks differently. To make them meaningful, managers must understand what each employee values most.

In addition to helping retain top performers, an engaging and embracing culture also has competitive advantages, particularly when it comes to sustaining high performance. Bain & Company research found that nearly 70 percent of business leaders agree that culture provides the greatest source of competitive advantage. In fact, more than 80 percent believe an organization that lacks a high-performance culture is doomed to mediocrity.

Culture may not be the easiest thing to define, but you can take steps that encourage a culture in which your organization thrives. You can’t rush culture, but you’ll know it when you see it.

This article was authored by Henry DeLozier for Golf Course Industry magazine.

Staffing For Success: Part 2

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Game Plan – Henry DeLozier‘s monthly column in Golf Course Industry Magazine – continues its series on staffing for success with the second of three installments. After looking at how the pandemic has afforded club and course managers the opportunity to reevaluate their teams and redefine job descriptions in Staffing for Success: Part 1, we turn to finding and hiring the right team members.

As businesses reshape themselves into leaner and more efficient operations, top performers are the best value their money can buy.

A great many Americans are currently unemployed and looking for a job. According to the U.S. Bureau of Labor Statistics, 6.7 percent of the labor force — more than 10 million people — is out of work. Finding top performers for rising needs in club management roles should be easy work, right? If only it were a simple matter of statistics.

As management professionals in any business know, the magic is finding the right person for the right job. With the war for talent continuing to escalate, we turn to three experts to help us identify the best practices for optimum staffing in these turbulent times.

Jim Collins: Get the right people on the bus

Step one, as management thinker Jim Collins advises in his bestseller “Good to Great,” is to start by “getting the right people on the bus, the wrong people off the bus, and the right people in the right seats” before heading down the proverbial highway. In other words, focus on “who” before determining “what.”

Those who build great organizations make sure they have a busload of people who can adapt and perform brilliantly no matter what comes next. Selecting the right people is a matter of clearly deciding what types of people — attitudes, talents, backgrounds, skillsets — are needed to enable your team to accomplish great things.

Jeff Bezos: Ask these three questions

The Amazon founder uses a straightforward three-question guide for hiring key employees. Bezos’ three questions offer direct application to the management of golf and private clubs and are particularly useful during unpredictable circumstances.

1. Will you admire this person?

“If you think about the people you’ve admired in your life, they are probably people you’ve been able to learn or take an example from,” Bezos says. This discipline requires that management first knows who he or she is and has a clear-eyed understanding of the strengths and benefits that are needed for any position. Hiring managers do well to ask themselves:

  • What traits and attributes inspire me to be my best?
  • What do we need?
  • To what do we aspire?

2. Will this person raise the average level of effectiveness of the group they are entering?

Will the candidate increase the efficiency within the organization? Is he or she able to see around the corner and anticipate needs? Are they willing to challenge established norms and traditions? (Should course setup be executed in the afternoon instead of first thing each day? Can mechanical work be executed after hours by veterans who need extra work?)

3. Along what dimension might the person be a superstar?

Listen to candidates’ answers. Push for details. Ask follow-up questions to understand how your candidate thinks and imagines your operation. One is more likely to be a superstar when he or she is encouraged to make others better.

Regina Hartley: Hire the scrapper

Throughout her 25-year UPS career — working in talent acquisition, succession planning, learning and development, employee relations, and communications — Hartley has seen how people with passion and purpose will astound you when given the opportunity. That’s why she says, “Hire the scrapper.” She defines scrappers as people who have had to fight against the odds to get ahead. They differ from those she calls the “silver spoons” — people who have had clear advantages in their lives and from birth seem destined for success.

Before tossing the résumé of someone who has obviously scrapped his or her way to the experience and skills that qualify them for a job in your organization, at least give them an interview, Hartley says: “A résumé tells a story. A patchwork quilt of odd jobs and experiences may signal a lack of focus and unpredictability. Or it may indicate a committed struggle against obstacles.”

This article was authored by Henry DeLozier for Golf Course Industry magazine.

Read Staffing for Success: Part 3

Staffing For Success: Part 1

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This month, Game Plan – Henry DeLozier‘s monthly column in Golf Course Industry Magazine – kicks off a three-part series on staffing for success. First in the series is a look at how the pandemic has changed staffing needs and why superintendents and managers should consider reorganizing their teams and redefining job descriptions. Parts two and three will look at finding, hiring and retaining the right team members and creating the culture that inspires and motivates top performers.

“Never let a good crisis go to waste” is a quote often attributed to Winston Churchill in the days following World War II. Scholars question whether Churchill ever spoke those exact words, but as we make tentative steps to emerge from a pandemic-induced crisis of our own time, the lesson it implies — finding opportunity amidst great difficulty and challenge — rings as timely and as relevant as it would have in Churchill’s day.

In the still-churning wake of the global health pandemic of 2020, maybe the first place we should look for opportunity is with our own staffs. As COVID-19 raced through communities across America, thousands of golf clubs and facilities found themselves on either side of a dilemma. For those places where golf was booming, stretching tee sheets, golf car fleets and maintenance staffs to their limits and beyond, the question was whether to staff up to handle the surge or stay with current staff levels, figuring the wave would eventually crest and return to some semblance of normal. For places the boom never reached, the questions were: How long can we manage to keep our current team intact before payroll takes too much of a bite from dwindling revenues? And among those eventually let go, who will we bring back and who no longer has a place on our team?

By now, many of those calculations and decisions have been made and the ramifications felt. But the lessons they taught should not only endure, but also inform future staffing plans. In the heat of crisis, owners and managers learned who on their teams could take on more responsibility, who had leadership potential and who had reached their ceiling. They learned where they needed additional resources and where resources might be redeployed for better coverage and results. Now it’s time to put those lessons to work with redesigned organization charts and job descriptions.

One thing is for sure: a dynamic job market has changed even more in the last 12 months with continued disruption on the horizon. “The fallout will fundamentally change recruiting and hiring practices long after the pandemic has passed,” recruiting strategist Jack Whatley recently told Forbes.com.

Another certainty is that the war for talent will continue to escalate. Top performers will be in even greater demand because as businesses reshape themselves into leaner, more efficient operations, those top performers are the best value money can buy.

“Twenty years ago, all interns had mechanical skills and no computer knowledge. Now it is just the opposite. They all know how to operate computers, but they can’t change a spark plug,” says Rick Tegtmeier, the long-tenured and highly respected golf course superintendent at Des Moines Golf & Country Club. “It sure doesn’t hurt someone to work at a lesser-budget golf course operation and learn more of the skills that help you become a more rounded superintendent.”

There will never be a better time to take all the names off your org chart and rethink the needs of the club and course, the time and talent required of each of those needs, and the right names to place in those roles. As you go through that exercise, be aware that the pandemic and its economic reverberations have also changed employees’ perspectives.

Workers have had a lot of time recently to reevaluate their careers and question their next moves. Am I in the right job in the right industry? Where could I find more happiness and greater security for me and my family? Is this a stable environment and can I count on a stable paycheck? Where will I be exposed if (or when) another crisis emerges?

“Safety and job stability are at the top of mind for the job seeker now — and that changes what they want in a job,” Whatley says. “Businesses will have to become employee-centric as well as customer-centric.”

Hopefully, you and your facility have weathered this crisis without too much damage. Now’s the time to take advantage of an opportunity it has afforded.

This article was authored by Henry DeLozier for Golf Course Industry magazine.

Read Staffing for Success: Part 2

2021 Predictions on the Shape of the Next Normal

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When we were introduced to COVID-19 in March 2020, no one had any indication that ten months later the number of cases and its toll on society would continue to rise. The introduction of a vaccine is promising, but the road ahead remains filled with uncertainty as to when the next normal will arrive – and what shape that normal will adopt.

Since its inception, GGA Partners has traveled the globe working with private clubs, golf courses, investors, real estate developers, resorts, municipalities, and financial institutions. This has provided unique insight into the state of golf, private club, and leisure businesses from many different perspectives.

We have observed that even before the coronavirus pandemic, significant change was underway across the private club landscape. As we prepare for the “new normal” the thought leaders at GGA sat down to predict what they believe is coming in 2021 and beyond.

1. COVID-19 accelerates change already afoot in governance

According to Senior Partner Henry DeLozier, the change brought on by the pandemic is going to necessitate even more rapid change in governance, which GGA has seen clubs struggle with this past year.

“In corporate America, the concept of stakeholder capitalism was at the forefront in 2020 and that has transcended to the private club space,” commented DeLozier. “We’re hearing members across the private club spectrum questioning why they do not have a larger voice in their club and how board selections, as well as decisions, are being made.”

Private clubs that do not have current and effective governance will suffer from decreased member satisfaction and a constant churn of its membership base.

2. The capability to communicate effectively and efficiently will be key

Linda Dillenbeck, GGA’s director for the firm’s communications practice, stated that there continues to be a need to assist clubs in their efforts to communicate effectively and efficiently.

“It is basic human nature that people do not like change,” said Dillenbeck. “To minimize the disruption of pending changes, it is incumbent upon the management team and board of directors to clearly communicate the what, how, and why of their decisions then allow members to voice their opinions. This provides the level of two-way communication members are demanding.”

In addition to communications about club finances and capital improvements, clubs need to improve the use of the data they have collected to provide tailored communications to members. For example, notices about evolving restrictions on golf events should only be sent to those who play and those about activities for families with children don’t need to be sent to empty nesters.

Beyond member communications, clubs that will be successful in 2021 will be those which can retool and refine their external communications to ensure the message of what truly makes the club unique is presented clearly.

3. Greater work flexibility will impact club utilization in new and challenging ways

Report after report has trumpeted the tremendous increase in rounds played during the pandemic. According to GGA Director John Strawn, that is in large part due to work-from-home adaptations which are providing greater flexibility in how and when employees complete their daily tasks.

“People have more control over their work lives,” said Strawn. “Golf experienced fewer restrictions during the pandemic and that has brought out many new and fringe players leading to full tee sheets at both private and public golf courses.”

Full tee sheets are causing negative feedback from those who play more frequently as there is a belief that those not paying full dues are taking coveted tee times. To solve the problem, Strawn predicts clubs will need to revisit their strategies and ultimately their business models more frequently to ensure they are meeting this new and different demand effectively. Flexibility will be critical until the long-term impact on golf demand is better understood.

While clubs continue struggling to ensure fair and equitable access to the tee or courts while accommodating increased demand, Senior Associate Andrew Milne added that clubs should expect that best practice solutions may shift regarding reservations and tee sheet management to include lottery systems and Chelsea systems to ensure dissatisfaction among members is minimized. Understanding that new reservation management approaches may change the value proposition for members, a clear plan and message acknowledging this, and for measuring and adapting the approach as the future becomes clearer, will be important.

4. Clubs must better understand what women want from their club

According to the National Golf Foundation, while only one in five golfers are women, females represent a disproportionately higher percentage of beginners (31%).

Women ease into the game for a variety of reasons; to spend time with their family, to compete, to be outdoors, and to enjoy the support, community, and socialization. As these women age and consider joining a club, they will choose the clubs that shape programs, staff, activities, and offerings to blend the female competitive group with the group that is more interested in the social community.

“We’ve known for some time just how important the role of women and the family dynamic is regarding the decision on whether to join a private club,” commented GGA Director Murray Blair. “For clubs to succeed in 2021 and beyond, they will need to understand how women are impacting the decision-making process and implement the necessary adjustments to make them feel welcome, whether they play golf or not.”

5. Operational efficiencies gained during the pandemic will carry forward in 2021, and their challenges will too

Among the most remarkable takeaways from 2020 was the ability for clubs to adapt their operations and service offerings swiftly and effectively in the face of facility closures, variable human resource availability, and rapidly changing restrictions for public health and safety.

Contactless payments, varying tee time intervals, and pace dispersion tactics are pandemic-inspired efficiencies which GGA Associate Andrew Johnson predicts will continue.

Adding to the list, GGA Director Ben Hopkinson expects clubs will become more efficient at managing grab-and-go meals, take-out dining, and mobile ordering, following the best practices of companies like Uber Eats and DoorDash.

New ways of operating have also brought about new challenges, some of which will persist into 2021 and require even more new solutions to be generated at clubs and courses.

GGA Senior Associate Andrew Johnson expects that the increased costs associated with COVID-19 mandated protocols such as labor for sanitation and cleaning, as well as elevated maintenance expenses due to increased rounds, will remain through 2021.

Clubs that effectively determine what increased interest and golf participation means for facility accessibility, program creation, membership categories and associated privileges will find increased membership satisfaction and interest from new prospects.

6. The pandemic’s impact on club finances will remain uncertain, expect to see more measurement, flexibility, and experimentation

Despite successful adaptations in club operations and economic relief opportunities afforded by governments and municipalities, the full extent of the pandemic’s economic impact will remain varied across club types depending on business structures and market areas.

GGA Senior Manager Martin Tzankov, remains concerned about the financial position of many clubs and believes the brunt of the economic impact has yet to be seen.

“The reliance of clubs on dues increases and capital assessments has been particularly apparent this year and may have stretched the value proposition too far for some,” stated Tzankov.  “2021 will show the clubs where a clear and present value proposition is being presented to members, who in turn, will continue to pay the cost of belonging.”

GGA Partner Derek Johnston believes there are clubs that will be able to increase pricing and sustain the increases in the long-term and there are clubs that will overshoot the mark. Johnston expressed concern that some clubs may move joining fees too high, too fast; golf businesses may move their green fees too high, too fast; and some may move away from tee sheet management practices too quickly.

“Nobody knows what’s coming.  If clubs have experienced less attrition than in the past, it may be due to members being unwilling to give up their safe sanctuary, but when things begin to stabilize post-vaccine that may not persist,” he explained.  “I believe that a portion of the historical attrition hasn’t been abated, just held back.  There will be increased attrition over the next 12-24 months and there may not be the same demand there to replace those who leave, especially as other social and lifestyle pursuits become more widely available again.”

2021 will be a time for clubs to experiment.  A measured, flexible approach to joining fees and dues will be a prudent approach this year.

7. A club’s success will in part be driven by its sum of parts in 2021

Craig Johnston, a partner and head of GGA’s transaction advisory practice, emphasized that the success of clubs during and following the pandemic will in part be driven by its sum of parts. Johnston explained “A private club may include a fitness center, retail store, several restaurants, a golf course, and a marina. The pandemic has impacted the utilization and thus success of all those ‘parts’ differently, and therefore the overall success of the club will largely be dependent on the club’s product or shall we say parts mix.”

“Every club is going to be different depending on its type of business and the operations which comprise it, the extent and variability of pandemic-related changes means that comparatives are going to need to be refined,” continued Johnston.  “Clubs that understand and appreciate the challenges and successes of the various parts of their business will be in a better position to realign and optimize heading into the ‘new normal’.”

8. The movement of people and relocation of companies will reshape markets

Our news feeds have been full of stories about high-profile people and companies moving out of California into Texas, as well as the movement of bankers to Florida from New York. If looking at this as a trend, you might imagine seeing increased need and greater attrition among clubs in the California and New York markets and, conversely, excess demand for clubs in markets like Texas and Florida.

According to GGA Manager Alison Corner, it will be important for clubs to understand the movement of people – not just the movement away from major urban centers and into the suburbs, but also the movement of companies and the actual physical locations of corporations – because they may have drastic impacts to how certain club and leisure businesses perform over the next 5 – 10 years.

Clubs that are mindful of these relocation trends will help themselves to recognize and either seize new opportunities, or mitigate future risks.

Constantly Thinking About Budgets

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With most 2021 budgets prepared and submitted, many golf course superintendents and their managers are reviewing and updating agronomic plans for the coming year. A sound agronomic plan is a living document that must anticipate upcoming conditions and respond to emerging circumstances. In volatile times, certain constants must be considered. Let’s evaluate some of those constants in the context of today’s conditions and challenges and see how they might affect budgets.

Constants

Certain irrevocable factors influence the proper care and upkeep of golf facilities with budgets leading the list. Your budget is the mathematical “North Star” on which you steer your performance. It’s also a measure of your intentions. One superintendent summarized his budget by saying, “You can run but cannot hide from your budget, so you might as well pick it up and run with it.” In other words, dig into the process and learn to deal with the variables.

For 2021, here are several budget guidelines to understand:

  • Most planners expect a choppy year ahead. Set aside funds for the unexpected events that will emerge and keep your powder dry.
  • Plan for three categories of expense. Fixed expenses for such budget overhead requirements as utilities and equipment leases are unlikely to change, although careful budget managers ask for relief on such fixed costs through abatements or forgiveness that may help to stretch budgeted resources. Second, labor costs will ebb and flow as impacts from COVID-19 and closures of club facilities will place irregular demands on labor dollars. Give yourself some room to maneuver. Third, discretionary needs will emerge as fellow managers and golfers seek new solutions to new problems. So be prepared.
  • New ideas and methods introduce new solutions for labor and overhead costs. Be alert and watch for new and innovative possibilities that make your work eventful and add purpose to your accomplishments.
  • Changing weather patterns demand that golf course operators become better informed and more proactive in planning care and upkeep practices. While much of your work is influenced by changing weather conditions, superintendents know to rely on the National Oceanic and Atmospheric Administration for accurate weather pattern forecasts that help them more accurately plan and schedule their maintenance practices.
  • Golfers’ expectations continue to escalate. You can count on golfers wanting “more and better,” which means course managers are always searching for process and results improvements. For 2021, golfers’ expectations include enhanced sanitation and clearing of on-course comfort stations, golf carts and practice range equipment. Next year will demand sustainable care and upkeep standards despite irregular resources that may be interrupted by supply chain and budgetary limitations.

Upcoming Conditions

Course managers must anticipate changes being introduced for labor management and workers’ expectations. Such changes as reducing the number of workers exposed to one another is requiring managers to divide crews and adjust shifts. Your team’s protection is vital.

Changing climatic circumstances requires enhanced emergency preparations. Consider your clean-air, fire and immediate-notice evacuation plans for workers and affiliated departments. Your liability insurance carriers are a good starting point for collecting guidance, as are emergency preparedness agencies in your vicinity.

Emerging Circumstances

Develop your short list of resources on which you will draw for new threats and opportunities. The Centers for Disease Control and Prevention and the National Institutes of Health are examples of resources on which you can rely. The coming year will reveal new problems, challenges and circumstances with which golf course managers must reckon.

Emergency services professionals, such as your local health care, water supply and cyber-security experts, are valuable resources on which you can call. Beyond your club’s insurer, call on fire and police experts to provide guidance in planning ahead.

This article was authored by Henry DeLozier for Golf Course Industry magazine. 

Four HR Questions Club Boards Should Be Asking

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When was the last time your club audited its human resources? Alignment between a club’s strategy and its employee offering is essential in order to enhance the overall club lifestyle, culture, and experience for members and staff.

To determine whether it’s time to reexamine culture, Partner Derek Johnston lays out 4 questions private club boards should be asking. 

Among the most reverberant takeaways from the coronavirus pandemic is the importance of people to businesses. Global business leaders and executives at leading corporations have indicated that the shift toward talent as the most important source of corporate value has continued. The pandemic also seems to be leading an increasing number of talent-forward companies to take an “employees first” approach.

But this is nothing new for large-scale global businesses. Indeed, the third week of August marked the one-year anniversary of the influential Business Roundtable’s statement on corporate purpose – which puts employees, customers, their communities, and the environment on a par with shareholders.

“Human resources” is trending

It’s also nothing new for club businesses. Our continuous research on club industry trends has shown human resource management and labor challenges to be a persisting trend, one which club managers have reported to be rising in importance – before the coronavirus.

In 2019, human resources was ranked the 6th most-impactful private club trend (out of 27) in a global survey of club managers. And, in a separate Canadian club industry survey, it was identified as both a key risk and primary hurdle to modernizing club management while topping the list of areas which managers say are under-supported from an education standpoint.

The early-pandemic question as to whether COVID-19 impacts would accelerate the business community’s move to stakeholder capitalism, or slow it down as companies focus on short-term financial pressures, seems to have answered itself.

For clubs, the people-related challenges previously reported by managers have exacerbated, with topics like employee willingness to work, labor anxiety, staff recruitment and turnover emerging as key strategic questions which club leaders are currently wrestling.

Widespread COVID-19 impacts like club closures, layoffs, and furloughs certainly haven’t helped ease concerns. With significant changes afoot in staffing, retention, human resource availability, and operational adaptations, clubs are presented with a unique opportunity right now – the chance to reevaluate and perhaps reset their culture.

Got culture?

In clubs, culture IS governance. Sound governance is a strategic imperative primarily because it enables, supports, and nurtures effective strategy. And, as the Peter Drucker saying goes, “Culture eats strategy for breakfast.”

This is extremely important for club leaders.

It’s important because it means that no matter how strong a club’s strategic plan is, its efficacy will be held back by team members, staff, and employees if they don’t share the proper culture.

When the breaks are going against the business, as they are for some right now, the people implementing the club’s plan are the ones that make all the difference. While strategy defines direction and focus, culture is the habitat in which strategy lives or dies.

Now is the perfect time to reexamine your club’s culture to ensure staff square rightly with the club’s strategy. In other words, to ensure that your people are the best fit for accomplishing the club’s goals and objectives. Someone who was right for a specific role pre-pandemic may not be right for the same role now. Your business has changed, and some people may need to change too, either themselves or their roles.

How can club leaders reexamine culture?

The first place to start is by understanding what you’re currently doing for employees. Club leaders require a comprehensive understanding of the club’s current approach to human resource management so that they can determine the alignment of people and culture with the club’s goals.

When was the last time the club audited its human resources approach, policies, procedures, and performance? Ensuring alignment between the club’s strategy and its employee offering is essential in order to enhance the overall club lifestyle, culture, and experience for members and staff.

To help you get started, here are four HR questions private club boards should be asking:

1. How does our current organizational structure sit relative to best practice and what recent COVID-related changes should we make permanent or revisit?

Review your club’s current organizational structure, including both employees and contract workers, against best practice structures at comparable clubs locally, nationally, and globally. This review should focus special attention on the roles and responsibilities of human resources within the organizational structure with the goal of highlighting key gaps or divergences from best practice. Often times in clubs, an overly flat organizational structure tends to create ‘siloes’ that breed inefficiencies and bloat staffing levels.

2. Are we both efficient and competitive in the compensation and benefits afforded to employees?

Complete a comprehensive benchmarking exercise which compares compensation and benefit levels of all key staff and for the club as a whole to comparable clubs and other businesses with whom you compete for talent. The focus of this exercise should go beyond salary and hourly wages, factoring in relevant club financial and operating data, benefits packages, member and employee feedback scores, and other market-related information.

The goal is to identify current and accurate reference points for evaluating current compensation and benefits against best practice. There is a high degree of likelihood that there are opportunities in your current compensation and benefits structure to better align incentives and shift compensation to top talent, which tends to support increased productivity and reduced head count.

3. Are our personnel positioned to help us achieve the club’s goals and objectives? Are we helping them achieve theirs?

Assess your club’s performance tracking and review processes. The goal here is to analyze current performance evaluation processes and procedures to ensure alignment with the club’s overarching goals. This requires the board and executive committee to have a focused, clear, and comprehensive understanding of the club’s mission, vision, core values, and objectives.

For maximum benefit, to both member and employee satisfaction, it is incredibly important that performance is measurable and incentivized. The trick is determining the right way to track and measure performance and tie it to the right incentive.

4. Are our staff equipped with the tools they need to succeed? Are they empowered to do so?

Evaluate your club’s current recruiting, onboarding, training, and ongoing relational efforts. This will likely require management meetings and staff interviews to learn about the current approach and unearth any ideas or recommendations your team may have to suggest.

The success of every private club is dependent on the quality of their staff. Recruiting the best talent, integrating them into the envisioned culture, training them for success, ensuring their satisfaction, and ultimately retaining them is an important goal. The outcome from which tends to have a positive financial impact on the club and on the member experience.

After all, an investment in people is an investment in culture and clubs will benefit from this investment.

Members Worried About Their Club’s Financial Health; Say Their Return Contingent on Safe Conditions

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Members Worried About Their Club’s Financial Health;
Say Their Return Contingent on Safe Conditions

TORONTO (August 11, 2020) – Private club members are worried about their club’s financial well-being in the aftermath of the global pandemic, and only 27% expect operations to revert to the way they were before the challenges imposed by the coronavirus.  But most say they will retain their membership if their club holds the line on dues increases, maintains the quality of its facilities, and makes returning to the club safe for themselves and their families.

Those were among the findings of a survey of private golf club members conducted by GGA Partners, an international consulting firm and advisor to many of the world’s most successful golf courses, private clubs, resorts and residential communities.  The study was conducted among members of U.S. and Canadian private clubs with survey participants averaging 12 years of club membership.

Survey respondents were not optimistic about their club’s financial position with 71% saying they expect a decline in the financial health of their club. Fifty percent cited current economic conditions and 42% said a drop in member spending would lead to the decline, which 20% predicted would be “significant.”

In response to downward financial pressures, members expect their clubs to adapt operationally rather than financially by scaling back high-touch areas of operations to simultaneously reduce operating costs and lower the risk of COVID-19 transmission.

Rather than increasing revenue through dues or membership growth, almost three-quarters of members would prefer their club make near-term, operational changes – including reducing dining operations (61%) and administrative expenses.

Despite the multiple ways their lives have been affected by the pandemic, roughly four in five members report either an increase in importance or no change in the club’s importance in their lives. Friendships, the quality of amenities and recreational activities were cited as factors driving the club’s importance. Twenty-one percent say the club’s importance has diminished because of the pandemic.

“The COVID-19 pandemic has not negatively impacted the relevance of the club in the lives of most private club members.  If anything, its importance has been reinforced,” said Henry DeLozier, a partner in the Toronto-based firm.  “Together these results suggest that the importance and relevance of their club experience are strengthened during emotionally challenging times.”

When asked how they would (or have) approached returning to their club in the wake of the coronavirus, 39% said they would (or have) returned without any restrictions imposed by the club.  However, 61% said their return was contingent on certain conditions: 50% said they would return if social distancing was maintained and government guidelines enforced; 11% were more hesitant, saying they would not return until the club had been operational “without issues” for a trial period or until rigorous virus testing capabilities were implemented or a vaccine were available.

Members said they also would consider leaving their clubs if dues increases exceeded typical annual hikes (50%) and the club’s facilities deteriorated (41%).

“The good news for club operators is that scaling back operations, reducing services and limiting access to amenities and activities – essential maneuvers to safely and responsibly navigate a virus-plagued social environment – are unlikely to cause significant membership attrition,” DeLozier said.

 

About GGA Partners

GGA Partners™ is an international consulting firm and trusted advisor to many of the world’s most successful golf courses, private clubs, resorts, and residential communities.  We are dedicated to helping owners, asset managers, club and community leaders, investors and real estate developers tackle challenges, achieve objectives, and maximize asset performance.

Established in 1992 as the KPMG Golf Industry Practice, our global team of experienced professionals leverage in-depth business intelligence and proprietary global data to deliver impactful strategic solutions and lasting success.

For more information, please visit ggapartners.com.

 

Contact

Henry DeLozier
Partner, GGA Partners
602-739-0488
henry.delozier@ggapartners.com

Rob Hill
Partner, GGA Partners
+353 86 68 12 744
rob.hill@ggapartners.com

Practice Areas and the Pandemic

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If you’re thinking about adding or enhancing a practice area at your course, here are some things to keep in mind. This article was authored by Henry DeLozier for Golf Course Industry magazine.

Searching for a silver lining to a pandemic is mostly a fool’s errand. But many golf courses fortunate enough to stay open during the last five months have found something for which to be thankful: Thousands of golfers and would-be golfers are discovering (and rediscovering) a love for the game.

In many places, their affection is being stoked by short-game practice areas that are introducing new players to golf and giving more experienced players a place to hone their games, all the while boosting incremental revenues.

Bradley Klein, a veteran golf travel, history and architecture journalist and Golf Course Industry columnist, observes that the role of short-game practice areas is evolving. “Time constraints were the initial impetus, but that’s changed of late.” He says the trend is toward “more fun, family-friendly” areas that also provide practice opportunities for serious golfers. “They also constitute efficient use of land.”

What’s more, in this era of social distancing, short game areas are a safe space for youngsters to learn the game while socializing and exercising, according to Jan Bel Jan, president of the American Society of Golf Course Architects. She believes the trend will continue to gain momentum. “Short game improvement areas provide benefits to seasoned golfers, promote a welcoming introduction to golf for adult beginners and help courses remain competitive with other area facilities,” she says.

Pinehurst Resort injected new credibility for areas dedicated to the short game and demonstrated its revenue potential when it opened The Cradle — nine holes, all par threes, measuring 789 yards and covering 10 acres — in September 2017. In the last three years, The Cradle has hosted more than 100,000 rounds while becoming one of Pinehurst’s most popular courses.

If you’re thinking about adding or enhancing a practice area at your course, here are some things to keep in mind.

Know your customer.

New practice, training and game-improvement facilities require planning, which starts with understanding the type of player you want to attract. What skill levels will you prioritize? What will be the hours of operation? How will you price access? Member surveys and information exchange sessions with golfers will help you better understand your target audience’s needs and expectations.

Don’t get sloppy.

“Serious design, with interesting greens contours and variety of tee shots” are keys to effective planning, Klein says. “It has to be run like a real golf course and not like a sloppy afterthought.”

Make it fun.

Jim Wyffels, director of operations at Spirit Hollow Golf Club in Burlington, Iowa, is an innovative thinker when it comes to making golf fun. Spirit Hollow’s Shankopotamus Golf Academy, which features TopTracer technologies, was designed with two goals in mind, Wyffels says. “The first was to create an additional amenity for our stay-and-play guests in the evening and during inclement weather. The second was to create a new revenue stream in the evening and during winter months that would target our local market. Our plan was to create a fun, game-like family atmosphere where all age groups and skill levels, including non-golfers, could be entertained.”

Keep your superintendent in the loop.

How will the golf course superintendent maintain the short-game area? Engage the superintendent to ensure design characteristics that can be efficiently and cost-effectively maintained. Concerns such as adequate turning radii, slopes that can be consistently cut and safely navigated by staff, and shapes that match existing terrain on the adjacent golf course are planning priorities. Bel Jan advises planners to be mindful of optimizing drainage, building putting surfaces to established standards and minimizing shade impacts to enable turf recovery.

COVID-19 really has no upside; it has wreaked havoc in unprecedented ways. But if a crisis of its proportions has encouraged more people to take to the course, and prompted golf managers and leaders to think more innovatively about amenities like short courses and practice areas, then it has left something of value in its wake.

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