Mid-Year Predictions for the Second Half of 2021

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.

GGA Partners and USGA to Collaborate on Golf Course Superintendent Executive Search and Placement Services

New offering combines organizations’ expertise to improve golf facilities’ ability to deliver better playing conditions and enhanced golfer experience

BLUFFTON, S.C., and LIBERTY CORNER, N.J. (April 14, 2021) – The United States Golf Association (USGA) will join with GGA Partners (GGA), an international consulting firm, to launch a new service to place top-notch golf course superintendent candidates at facilities across North America.

As part of its suite of advisory services, GGA has long provided executive search services for facility clients. The collaboration will expand the company’s offerings, with the USGA Green Section’s agronomic and maintenance expertise serving as key factors in targeting the unique needs of each golf course and identifying superintendents with matching skills who can help facilities elevate playing conditions, improve course presentation and foster sustainable practices.

“For any golf facility, the ability to hire the right talent is crucial for long-term success, and we believe in creating and maintaining partnerships with facilities,” said Patrick DeLozier, GGA’s managing director of executive search. “The stakes are higher than ever for facilities looking to hire superintendents, and they are looking for candidates with a wide variety of skills.”

Added Craig Johnston, a GGA partner: “The ability to complement our services in strategy, facility governance, finance and operations with the USGA’s agronomic strength will ensure that we can continue to support our clients with the gold standard in best practices, education, innovative products and research.”

The collaboration will allow the USGA to expand its reach and enhance its ability to inform best management practices for golf course maintenance, including resource prioritization. As part of its mission to champion and advance the game, the USGA is helping to ensure a sustainable game in which course managers are empowered to create a positive experience for their golfers.

“GGA’s values and business areas are strategically aligned with our mission,” said Matt Pringle, managing director of the USGA Green Section. “With this new joint service, we can find the best match between the needs of the golf course and the skill set of their next superintendent, while providing ongoing support to deliver outstanding playing conditions and improved golfer satisfaction.”

The joint service will utilize the USGA’s nationwide network of agronomists, whose extensive knowledge of the facilities and superintendents in their regions will be pivotal to the program’s success. They will work closely with DeLozier, who heads up the firm’s executive search practice.

To learn more, contact Patrick DeLozier at patrick.delozier@ggapartners.com or Elliott Dowling at edowling@usga.org.

 

About the USGA

The USGA is a nonprofit organization that celebrates, serves and advances the game of golf. Founded in 1894, we conduct many of golf’s premier professional and amateur championships, including the U.S. Open and U.S. Women’s Open. With The R&A, we govern the sport via global set of playing, equipment, handicapping and amateur status rules. The USGA campus in Liberty Corner, New Jersey, is home to the Associations, Research and Test center, where science and innovation are fueling a healthy and sustainable game for the future. The campus is also home to the USGA Golf Museum, where we honor the game by curating the world’s most comprehensive archive of golf artifacts. To learn more, visit usga.org.

 

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. GGA Partners has offices in Toronto, Ontario, Phoenix, Arizona, Bluffton, South Carolina, and Dublin, Ireland. For more information, please visit ggapartners.com.

GGA Partners Opens East Coast Office in South Carolina to Support Continued Growth

Central location in the heart of golf country chosen to provide even better access to clients and applicants

TORONTO, Ontario – GGA Partners Inc., an international consulting firm and trusted advisor to golf courses, private clubs, resorts, and residential communities around the world, announced the opening of an East Coast office in the Bluffton/Hilton Head area, effective immediately.

Patrick DeLozier, Director

Patrick DeLozier, Managing Director of GGA’s Executive Search practice in the U.S. will manage the new office and continue to contribute his exceptional experience and expertise to the firms Strategy and Operations practice.

“Moving to the Hilton Head area will provide easier access to the clients we serve in the eastern United States,” commented DeLozier. “Our new location in the heart of East Coast golf and private club communities will expand our access to the top tier talent our clients demand.”

“Helping our clients source the right executive talent to successfully execute their strategic goals and objectives is a rapidly growing segment of our business” stated Derek Johnston, a partner in the firm. “Having an office in the Bluffton/Hilton Head area along with our western U.S. office in Phoenix, Arizona, increases our ability to remain connected to our clients and executive talent across the country, especially as pandemic restrictions continue to ease and the economy reopens.”

GGA’s approach to executive search is founded on the basis of partnering with our clients to support long-term success and sustainability. Our search professionals leverage the expertise within the firm’s Strategy & Operations, Research & Analytics, Governance, and Branding and Communications practices to ensure our clients have the resources to succeed.

“What separates a good organization from a great organization is leadership,” said DeLozier. “Our goal is to source the best talent for our clients and then support them in achieving success.”

 

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. GGA Partners has offices in Toronto, Ontario, Phoenix, Arizona, Bluffton/Hilton Head, South Carolina, and Dublin, Ireland. For more information, please visit ggapartners.com.

 

Media Contact:

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

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