Tag: food

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.

Executive Search: Executive Chef at Highlands Falls Country Club

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EXECUTIVE CHEF
HIGHLANDS FALLS COUNTRY CLUB
Highlands, NC

 

The Club:

Founded in 1958, Highlands Falls Country Club is a private, member-owned club in Highlands, North Carolina. Perched high atop the Highlands Plateau, where incredible views stretch for miles and miles, is Highlands Falls, a small and close-knit community which has just completed a $3.5 million renovation of the clubhouse to expand outdoor dining and create a unique indoor/outdoor bar and grill area. With updated features, extended dining areas, and sweeping views, it serves as a stylish, luxurious gathering place for members and guests – the response from the membership has been overwhelmingly positive.

Highlands Falls offers all the amenities and activities you’d expect, and then some. Whether members prefer golf, croquet, pickleball, tennis, bridge, fishing, swimming, dining, working out, tennis, competing in “yacht club” races, or a combination of all of the above, they enjoy their play surrounded by mountain views, an incredible waterfall, and folks who can’t wait to welcome you to the community.

Highlands Falls offers 18 holes of pure golf fun on a dramatically beautiful course, a Croquet Pavilion, a tennis center with three Har-Tru courts and pickleball, all of which offer interactive programs and regular social events. The Club has a Fitness facility that includes a weight room, locker rooms, a group fitness room, and is replete with spa services, personal training, group classes, and a private swim complex. The Pool complex includes the swimming pool and aquatic fitness activities. The Clubhouse consists of the administrative offices, kitchen, member dining areas, lounge and banquet facilities, and offers engaging activities for all ages, such as the highly popular Bridge program and fun-filled Junior Camp.

Members love to talk about how incredible the dining experience is at Highlands Falls, which offers both casual and formal dining options, well-priced lunch and dinner menus, special theme dinners, phenomenal wine dinners, a la carte brunch every Sunday, and special dietary accommodations upon request. Whether hosting a small private party, throwing a large private event, or entertaining special guests, Highlands Falls provides the perfect combination of private elegance and impeccable service.

Highlands Falls Country Club Overview

 

  • 284 Members (Golf: 187, Other: 97)
  • Initiation Fee (Resident Member Golf: $45,000)
  • Annual Dues (Golf: $13,086)
  • $5.5M Gross Volume
  • $3.1M Annual Dues
  • $600K F&B Volume
  • 14 Employees Culinary
  • 9 Board Members
  • Average age of members is 73

The Executive Chef Position:

Highlands Falls Country Club is searching for a committed, proactive, and passionate culinary professional, an Executive Chef who would enjoy working in an exciting private club environment and can select the perfect enhancements to make a lasting impression. The Executive Chef will coordinate and oversee all aspects of the kitchen to ensure quality and consistency of the dining experience. This professional should have strong leadership skills and a proven track record in recruiting and attracting culinarians to the team. Experience in seasonal hospitality operations offering similar services is a plus.

Important Individual Characteristics:

 

  • A naturally enthusiastic personality and passion for the culinary industry.
  • Ability to hire, trains, motivates and develops a high performing team in a seasonal environment.
  • A natural leadership style which promotes an engaging, motivated staff.
  • A mind for innovation and action with an ability to act as a thought partner with General Manager and other department leaders.
  • Creativity in menu design, exhibiting an appreciation for the Club’s culinary traditions while exploring fresh and innovative culinary trends.
  • The ability to communicate effectively, both verbally and in writing.
  • Disciplined follow-through to ensure the vision and goals of the Club come to fruition.
  • Ability to cultivate a high-level of member satisfaction through consistency in ding services.
  • Possess a strong understanding of top-notch food and beverage experiences for Club members and guests.
  • Effective fiscal management through delivery of actual operational and capital results in alignment with approved budgets.
  • Maintain a high level of visibility to members and staff as the face of the Club’s dining and catering programs.
  • Understands the importance of digital communication and can utilize web and social media tools to communicate with the staff and membership.
  • Ability to develop a dedicated team with a shared vision.

Additional Dining Information:

The Formal Dining Room seats up to 200 people for special events, with 120 for normal dining. Formal dining in the mountains is more casual than in typical in town clubs, as is the trend nationwide.

The Grille/Bar area seats approximately 60 people and can also accommodate 20-40 people for cocktails, not counting the bar, which can seat an additional 20 people between the indoor and outdoor bar stools. For the upcoming year, a new bar menu is anticipated to accommodate the desire for dining at the bar, especially in the fall for sporting events.

The Outdoor Dining area has been expanded to seat up to 110-130 patrons, depending on table configurations. All outdoor dining is covered and has drop down plastic curtains and heaters when to protect diners from inclement weather.

Private Events such as weddings can accommodate up to 300 people, utilizing both the indoor and outdoor spaces. For events of this size, the dining services will be closed to the membership. There are also two private meeting rooms, capable of seating up to 40 people for special events.

Candidate Qualifications:

 

  • A minimum of 5 years of progressive leadership and management experience in a hospitality environment. Current Executive Sous Chefs at well-recognized organizations, with verifiable records of achievement will also be considered.
  • Food safety certification.
  • Certification from American Culinary Federation or other hospitality association.
  • A degree from a post-secondary culinary arts program.

Note: A pre-employment drug screen and background check will be required. The position is available January 1, 2021.

Salary & Benefits:

Salary is open and commensurate with qualifications and experience. The Club offers an excellent bonus and benefit package.

Inquiries:

IMPORTANT: Interested candidates should submit résumés along with a detailed cover letter which addresses the qualifications and describes your alignment/experience with the prescribed position by Wednesday, December 3, 2020.

Those documents must be saved and emailed in Word or PDF format (save as “Last Name, First Name, HFCC Chef Cover Letter” and “Last Name, First Name, HFCC Chef Résumé”) respectively to: execsearchus@ggapartners.com. Please e-mail résumé with references.

For more information about Highlands Falls Country Club please visit clubhfcc.com.

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

Winter is Coming…

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Amidst the euphoria of clubs reopening, EMEA Partner Rob Hill encourages club leaders to look beyond 2020 and plan now to do all they can to maintain those gains, because starting this winter, 2021 is going to bring a whole new challenge.

Numerous UK golfing bodies, clubs and media are understandably enjoying the moment – citing a considerable spike in membership interest and lauding the industry’s resurrection as reason for celebration.

Amidst the euphoria, club leaders would do well to look beyond 2020 and plan now to do all they can to maintain those gains, because starting this winter, 2021 is going to bring a whole new challenge.

The Bank of England has warned that the UK faces its deepest recession since 1709 and the OECD forecasts that the UK will suffer the worst recession in the developed world.

Thus far, the true state of the UK labour market has been disguised by wage subsidies covering 9.1m jobs – a scheme coming to an end in October this year.

GGA Partners Research (A Member’s Perspective, 2020) signals that 43% of private club members expect their disposable income will decline over the next 12 months, while 58% believe their overall consumer spending will also decline.

This new economic environment will first focus its wrath on the 8% of clubs in the UK and Ireland that classify their current cash position as ‘Critical’. It will swiftly sweep through the further 29% that classify theirs as ‘Concerning’.

As far as the COVID effect on member attitudes to returning to use their club, 11% of members signal that they are hesitant, would not return until the Club had been operational ‘without issues’ for a trial period, until rigorous virus testing capabilities or even a vaccine is available. This is particularly applicable to the 70’s+ age group (A Member’s Perspective, 2020), leading to a likely detrimental impact on this demographic’s perceived value for money and relevance.

A study carried out by the English Golf Union as it then was in 2008, identified in the first year of that recession, almost 1/2 of all clubs experienced a decline in membership numbers with “the most significant decrease in the 22-44 age group” – a reflection of the age group that gets hit hardest in an employment downtown. It’s reasonable to assume this trend will be repeated.

By all means enjoy re-opening, celebrate the new demand and interest in the game and membership, and the first profitable quarter for f&b departments in recent memory! But remember what you’re experiencing now isn’t the new normal. That’s coming this winter and it is the responsibility of club leaders to prepare their organisations for the next cycle NOW.

This means addressing any governance weaknesses that may hinder nimble and difficult decision-making. Following proven guiding principles to protect the club’s overall financial health. Protecting the condition of club assets and exploring opportunities for investing in enhancements which will broaden relevance and appeal. Investing in people and their education to deliver efficient and outstanding member and visitor experiences. Investing in a membership retention plan with an emphasis on value, NPS, socialisation, and safety, and investing in an appropriate brand management strategy so that values are communicated effectively to both internal and external audiences.

If you have an interest in reading insights from my colleagues and research from our extraordinary team at GGA Partners, I encourage you to go to ggapartners.com/insights where you can also sign up to receive releases of interest.

A Member’s Perspective: The Shifting Private Club Landscape

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New GGA Partners Research Report Highlights Private Club Members’ Perspective on COVID-19 Impact

More than 6,300 private club members share their attitudes toward the club industry in the wake of the COVID-19 pandemic and how they expect clubs to respond. Now available for download.

TORONTO, Ontario – GGA Partners – international consulting firm and trusted advisor to many of the world’s most successful golf courses, private clubs, resorts, and residential communities – has released the results of a global research survey of more than 6,300 private club members across six countries on four continents.

The research, which incorporates clubs in the United States, Canada, Europe, Australia and China, measures the attitudes and preferences of private club members on club operations and finance in the wake of the COVID-19 global health crisis.

“The coronavirus pandemic has shifted the private club landscape in many ways and these research findings offer insight into the near-future ripple effects with which club leaders must reckon,” explained Derek Johnston, a Partner in the firm. “As an industry advisor for trends shaping private club strategy, our team at GGA Partners is doing all that we can to help club leaders navigate the crisis and strengthen their understanding of how to react and adapt in order to meet the morphing needs and expectations of members.”

Overall results are encouraging; members feel highly positive about the crisis-management performance of their clubs and indicate that the importance of “the Club” in their lives has not been negatively impacted by the pandemic, but rather reinforced.

“In terms of correlation, the more effectively clubs have performed during the COVID-19 pandemic, the more important they became in the lives of members,” stated Ben Hopkinson, Director Client Success and Sales at GGA Partners.  “Together, these results suggest that, for members, the importance and relevance of their club experience is strengthened during emotionally challenging times.”

However, despite the enduring importance of the club in their lives, members’ high-level economic outlook over the next 12 months is more somber: 43% expect their disposable income to decrease and 58% believe their overall consumer spending will as well.  Perhaps most disheartening is members’ outlook on how their club’s financial position will change: 71% envisage a decline, with 20% characterizing the anticipated decline as ‘significant’.

In response to anticipated downward financial pressures, members expect their clubs to adapt operationally by scaling back certain high-touch areas of operations to simultaneously reduce club operating costs and the risk of COVID-19 transmission.  The extent of operational changes is predicted to be moderate in nature – only 12% of participants envision changes characterized as ‘significant’ or ‘drastic’.

The majority of private club members indicate their understanding of the need for operational adaptions to reduce costs, showing stronger support for changes which reduce service offerings and availability than those which increase their cost to belong.

The good news for club operators is the implication that operational scale-backs, service reductions, and restricted/limited access to amenities and activities – essential maneuvers to safely and responsibly navigate a virus-ridden social environment – are unlikely to cause significant membership attrition.  The tough news is that increasing dues beyond the norm – or allowing the value and quality of club amenities to diminish – just might push members away in the short-term.

According to Patrick DeLozier, Director at GGA Partners, constant evolutions in the COVID-19 pandemic place enhanced pressure on the planning capabilities of club leaders.  “It’s really a day-to-day for managers,” he said. “The stop-and-start reality of new case development and safety protocols requires club managers to have up-to-date information and the support of very sound research and data to work through challenges with the club’s board of directors.”

This means that club leaders need to have a plan for what they’re going to do next as the situation evolves quickly and unexpectedly. “The need for data-driven analysis, diligent financial monitoring, and a prepared communications strategy is more prevalent than ever,” DeLozier clarified.  “To sustain forward-thinking, club leaders need to have a ‘Plan C’ for the ‘Plan A’.  Pandemic-related changes are so rapid that, if you can’t adapt quickly, you’re well behind the eight ball.”

These results and more are detailed in a report titled A Member’s Perspective: The Shifting Private Club Landscape, now available for download.

Click here to download the report and see the findings

 

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

Bennett DeLozier
GGA Partners
602-614-2100
bennett.delozier@ggapartners.com

Time to Deliver an Unforgettable Experience

Date:

Today, many club members are less inclined to splurge on a new set of clubs and more likely to allocate their time and money to sharing an experience with their friends and family. Not only are experiences ‘trending’, the experience economy is booming.

The economics are simple: people are spending more on doing stuff and less on buying stuff.

Consumers have recognized that sharing experiences with others generates a stronger and longer-lasting sense of happiness than buying a product does; for businesses this requires an approach to services which is more relational than transactional, more qualitative than quantitative.

This shift in demand creates a tremendous opportunity for clubs, because membership clubs are perfectly situated to capitalize on servicing the experiences of their members.

Here are nine tips to help clubs deliver experiences that are unforgettable for members:

1. Be mindful of when the ‘experience’ starts.

In many cases the experience may begin long before members are at the Club, or even before they have become members.

How your members become aware of the experience, the way they register or sign-up for it, the message they receive confirming their registration, a reminder or additional information they may receive about it, the availability of parking on the day, and the ambiance of their arrival at the Club are all contributors to the experience as a whole and the customer’s memory of it.

2. Use technology to create the feeling of a meaningful relationship.

The aim is to establish the sense of a one-to-one relationship between the club and the member, both offline and online, making the member feel known, welcome, and expected.

Understanding of their preferred methods of communication, their drink preferences or dietary restrictions, and, of course, knowledge of their name plays into the experience. Unless you have a superhuman ability to track this information mentally, let technology do the work for you.

3. Great experiences can be simple.

Remember that, in the experience economy, the commodity is happiness.

Experiences need not be expensive, elaborate, comprehensive, or enduring to generate fulfillment for members. Rather they need to be genuine and encourage socialization and relationship-building with others. In fact, research suggests that many consumers see experiences as affordable indulgences rather than major expenditures.

4. Food and Beverage is an easy place to start enhancing experiential offerings.

Members are increasingly interested in food and beverage experiences such as niche-based events for a small, targeted group of members. Examples might include wine tastings, whiskey samplings, trialing cigars, nine-and-dine type of events, or ‘dinner with the chef’ or ‘dinner in the kitchen’.

The key to ensuring these drinking and dining experiences deliver experiential value to members is to focus on facilitating interaction and engagement rather than the food product. In the case of wine and whiskey tasting, the value is not in the consumption of alcohol but rather in the shared experience of trying new things with companions. For ‘dinner with the chef’ the value is tied to the sense of exclusivity, intimate dining, and the feeling of having gotten something ‘extra’.

5. Lifestyle experiences are increasingly important in the experience economy.

Member interests are trending toward a desire for clubs to provide lifestyle experiences as opposed to continually new and upgraded amenities and facilities.

Members are seeking to define themselves by how they live versus what they own and they want customized, unique experiences. In particular, experiences relating to ‘off-site’ outings and excursions, travel and adventure, whole-family experiences, and the Club becoming a ‘home-away-from-home’ are becoming more and more common.

6. Stand out from the pack of local experiences.

Turn to your club’s most recent market research, as well as anecdotal data from fellow managers, to inventory which experiences other clubs around you are offering.

Assess which events are commonly hosted among a variety of competitors, then be bold and take a creative approach by doing something different. If your market is focused on experiences for adults, there may be an opportunity to pioneer an unmatched children’s experience.

7. Know when to cast a wide net.

It’s important to know when to focus on a niche group (for optimal satisfaction) versus a broad group (for maximal attendance). When trialing something new or adventurous for the operations team, cultivate experiences that: (a) draw from multiple sources of revenue such as admission or registration fees, food and beverage sales, transportation costs, or ancillary dues/fees (if it’s related to a club-within-the-club), and (b) appeal to multiple demographic segments such as adults, families, teens, and young-professionals.

8. Track, monitor, and evaluate experience metrics.

Key metrics which clubs should be tracking to make informed assessments regarding the experiences they offer include:

  • Satisfaction with the experience
  • Willingness to recommend the experience to others (Net Promoter Score)
  • Utilization or attendance
  • Value-for-money perceptions

Most of these can be tracked through member surveys, rolling Net Promoter Score surveys, spot polls, automated follow-up surveys, or through web analytics regarding which marketing emails or event promotions were most clicked, most shared, or generated the most conversion to attendance.

The goal here is to track metrics consistently over time and across experiences in order to compare performance and effectiveness.

9. Embrace that what qualifies as ‘unforgettable’ varies from member to member, but recognize that what constitutes ‘unforgettable’ remains the same.

We all want our experiences to be unique. However, behavioral scientists are suggesting that consumers are less likely to compare experiential purchases than they are material products. If the commodity is happiness, the happiness one member receives from a certain experience does not diminish because another member was happy with their separate experience.

This means that a golf trip to St. Andrews may be as rewarding an experience for one member as attending a 70’s themed father-daughter dance might be for another. In each case the object of happiness is different, however the happiness they experienced and shared with others – and are now sharing with one another – is the same.

This article was authored by GGA Manager and Member Satisfaction expert Bennett DeLozier.

What Makes Members Happy

Date:

“Establish an atmosphere which fosters a sense of community and belonging – that is fundamental to member satisfaction.” – GGA Senior Associate Martin Tzankov

In a recent interview, GGA Senior Associate Martin Tzankov revealed the results of member survey findings from a sample of private clubs that are subscribed to GGA’s Strategic Intelligence platform, all based in and around the Greater Ontario region in Canada.

The Key Findings of the sample study were these:

  • Social Atmosphere and Food & Beverage ratings were most directly related to overall club satisfaction
  • Golf Course and Practice Facility ratings did not strongly relate to overall member satisfaction
  • The Clubhouse Experience bears a moderate correlation to overall satisfaction

Martin went on to discuss the findings and why some aspects of club life are more closely linked to satisfaction than others in today’s market:

Did it surprise you that the golf course and practice facilities were not more directly linked to member satisfaction?

In some ways, yes. It’s something I imagine most club managers would think is number one when it comes to satisfaction. But in the context of members and membership, the course is something they know and that they (most likely) got to know before they joined. It may change or evolve over time, but this study suggests there are other aspects of their membership that are more directly related to their satisfaction at any one time.

Social atmosphere was found to be most directly related to club satisfaction. Is this an emerging trend that you have witnessed from other club data in recent years?

It’s definitely something we’ve seen over the years on a case-by-case basis through our engagements and this data reinforces our first-hand observations. A sense of community and belonging is so important to club members. This has actually not really changed over time, however the definition of what a sense of community and belonging is has certainly evolved. Increasingly, members are looking to be part of a club that is friendly and welcoming to families, and one that creates social opportunities for its members to interact and spend time with one another.

The notion of shared experiences, added to the distinct feeling of being part of something, does feel like the sweet spot all clubs should be striving to create for their members. This is backed up by the data and, I suspect, would be backed up by more far reaching extensive research too.

Why do you think Food & Beverage ranked so highly in relation to member satisfaction?

It’s almost the opposite to the golf course, in the sense that the food and beverage offering is something they are unlikely to have experienced many times, if at all, before they became members. So, by the time they become a member, if it does not meet their expectations, a survey tends to be where this is reflected.

Despite the questions relating to food quality, menu selection and the like, there’s a broader social context too. The club is somewhere a member wants to be proud of, perhaps even invite others along to experience – so when certain aspects are not up to the standard they expect, this can be a source of discontent.

With the findings of the study in mind, what one or two takeaways can you recommend to club managers with a view to improving the experience and satisfaction for their members?

I’d focus on bringing your members together – create opportunities for members to spend time and socialize together at the club on and off the golf course. A sense of community and belonging plays a pivotal role in member satisfaction.

The club should be viewed as the vessel which enables members to live out social experiences with other members, their families, friends and guests, so by opening up these opportunities, members can expand their network within the club and become more rooted in the social fabric.

When you observe your members using the club and its amenities through this lens, it can help empathize with what they care most about, or what voids may exist in the member experience.

Any final conclusions to draw from the findings?

The findings have reinforced our observations into which areas specifically impact member satisfaction most. But for the moment, this is really only an indication. We’ll soon be embarking on more extensive analysis, taking account of clubs further afield, looking more closely at individual responses and mapping these to member satisfaction. This will provide an even more robust basis to examine where clubs really need to focus their attention in order to enhance the experience for members.

Connect with Martin Tzankov

Budgeting 2019

Date:

Budgeting for 2019 requires a broader-than-usual alertness to changing times and impacts on golf-oriented businesses. Newfound elasticity on revenue sources, such as dues and fees, will allow many to plan for revenue increases. That’s the good news. More sobering is the fact that most courses and clubs will strain to cover the rapidly accelerating costs of operations.

While it’s helpful to know that costs are rising, budget planners benefit even more from understanding the factors driving cost increases. Here are five cost areas where knowledge of underlying trends and timing will lead to accurate projections.

Labor

The U.S. Department of Labor’s Employment Cost Index notes that wages and salaries for U.S. businesses increased 2.9 percent for the 12-month period ending in June 2018, following a 2.4 percent increase in June 2017. The cost of benefits rose 2.8 percent for the 12-month period ending in June 2018, after increasing 2.2 percent in June 2017. Employer costs for health benefits increased 1.6 percent for the same 12-month period.

Insurance

The costs associated with insuring golf facilities are increasing. Willis Towers Watson’s insurance industry semi-annual report (2018 Insurance Marketplace Realities) projects increases in insured categories more vulnerable to natural catastrophe impacts.

  • Property: Previous-loss history more than doubles premiums in most markets. Clubs located in markets exposed to catastrophic claims will increase as much as three times those of non-exposed clubs, while those clubs with catastrophic experience with losses may see increases from 15 to 20 percent.
  • Casualty: WTW projections indicate that rates for casualty insurance will increase less than 4 percent.
  • Auto Liability: For clubs with automobile insurance premiums, rates are expected to rise from 5 to 9 percent. Ongoing market challenges exist in this space, and two years of steady price increases have not kept pace with loss trends and adverse developments. Rates are expected to rise more steeply.
  • Cyber: Golf clubs are vulnerable to cyber-risk. The WTW study notes a 15-fold increase in two years with claims near $5 billion. Organizations without claims can forecast increase of 5 percent or less.

Healthcare

“Over the past nine years, employee out-of-pocket spending for a family of four increased 69 percent in the form of higher co-pays and higher deductibles, along with 105 percent employee premium contribution growth,” Keith Lemer, CEO of WellNet Healthcare, said in an interview with CNBC earlier this year, noting that over the same period a year earlier employer premium contributions increased 62 percent.” Lemer added, “In 2008 more than 8 percent of a family’s income was spent on health care. In 2015 (last available data) it rose to 12 percent. This means people are making less money today as a direct result of the cost of health care.”

Food

The costs of food consumed at home diverged a few years ago from the costs of food served away from home – in restaurants and clubs. The U.S. Department of Agriculture predicted grocery store price increases from 1 to 2 percent. Food consumed away from home is expected to increase from 2 to 3 percent. For menu planning purposes, be aware that beef and veal are projected to rise 2 to 3 percent, egg prices will increase 4 to 5 percent, while cereal and bakery prices will go up 3 to 4 percent. The USDA expects prices for fats, fruits and vegetables to drop.

Fuel

Large consumers of fuel and oil by-products, including golf courses, will see some relief in fuel-related costs in 2019, according to an August 2018 J.P. Morgan forecast. “While geopolitical tensions and lingering risks of large supply disruptions remain an upside risk, we think that prices will be corrected downwards towards end of the year and remain capped in 2019,” J.P. Morgan analyst Abhishek Deshpande wrote in the note reported by CNBC. This is important for golf where oil prices and those of oil by-products, including fertilizer, have direct budgetary impacts. For budgeting purposes, managers should watch oil futures. One can expect higher gas prices about six weeks after an increase in oil futures.

GGA’s Henry DeLozier penned this article for Golf Course Industry Magazine.

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