Tag: project

Labor, Capital Spending Top 2022 Budgets

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Budgeting for 2022 is complicated by rapidly changing circumstances and market conditions. GGA Partner Henry DeLozier offers insight into areas where budgetary impact will be greatest. 

Budgeting for 2022 is complicated by rapidly changing circumstances and market conditions. For most experienced hands, anticipating changes within their industry and business is far easier than predicting the breadth and depth of the impact the changes will have on their budgets. Here are two significant categories where budgetary impact will be greatest:

1. Labor costs

Historically, the cost of labor and employee benefits represent the largest line item in a golf course’s operational budget. A trend toward a $15-plus per hour minimum wage and desperately low labor supply conditions will only increase the budgetary impact of labor and benefits. In the wake of the COVID-19 pandemic, and the resulting impacts on labor, two truths are becoming evident:

  • Those clubs and courses that kept staff on the payroll and continued long-term relationships with their employees are being rewarded in two ways. First, those courses are not having to search a tight labor market for replacements. Second, course care and upkeep have been sustained by committed and knowledgeable employees who have a running head start on those clubs that have been forced practically to start over.
  • Working knowledge of your specific course and conditioning expectations promotes a more cost-effective recovery process.

But what if circumstances and decisions beyond your control have forced you into a game of agronomic catch-up? Here are some remedial actions to consider:

  • Update your agronomic plan to state your expectations for course conditioning. New employees need (and want) to understand what is expected of them. Be thorough. Be enthusiastic. Show how much you care.
  • Plan for robust new hire training. Pair experienced hands with newcomers. See that the veterans describe the values and standards of the work to be done with the same clarity and as enthusiastically as teaching the job’s “how to” components. Train the trainers to ensure across-the-board engagement and understanding. Plan daily technical training for your round-up sessions to bring new hires up to speed and promote consistency.
  • Hire veterans. There are approximately 19 million veterans in the United States, according to the U.S. Department of Veterans Affairs. As the increasing number of veterans mustering out of service expands, many trained and mature workers are searching for jobs. Some three-quarters of these veterans saw wartime service. Take the steps to learn more about those who have given so much and see how much they can give to your operation.

2. Capital maintenance

Capital spending for most golf facilities has expanded decidedly as an improving economy loosened purse strings and made more money available for deferred capital maintenance spending. Financial analysts at our firm note that capital spending is up by more than 55 percent at U.S. golf facilities, with most projects focusing on course renovations and restorations of historic designs, greens reconstruction and new bunker projects.

With the upsurge in golf’s popularity in the wake of the pandemic, many facilities have experienced growth in rounds played and membership enrollments. According to Golf Datatech, rounds played in 2020 increased by 13.9 percent over 2019 and through the first quarter of 2021 are up another 24 percent. The increased demand for tee times has given owners and managers new confidence to expand facility spending.

What are the smart moves being made by superintendents? They’re updating capital project rosters and renewing long-awaited requests for capital to upgrade facilities. And they’re not waiting. They’re describing the features and benefits of the intended projects and supporting financial projections with trustworthy third-party analysis.

In these uncommon times, it is important for turf pros to remember the sun does not shine on the same dog’s back every day. Market demand will shift. Access to labor will change. But the self-imposed high standards for most superintendents will remain and the expectations of enthusiastic golfers will expand. Prepare your 2022 budget carefully and with a broader understanding of social, economic and market conditions.

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

The Family Opinion

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Member surveys are not as clear cut as simply gauging satisfaction or opinion of members. GGA’s Andrew Milne explains how, by reaching out to include spouses or family in club surveys, you can gain invaluable insights on how your club is viewed in the context of modern family life.

Renewing a club membership used to be a straightforward matter. The member receives dues notification, pays a subscription, and club life continues. But as much as club managers may want that to be the case, increasingly, it simply is not.

The perfect storm of increased time, family and economic pressures for members means leisure outings are more heavily scrutinized and, occasionally, result in the end of membership and/or the club’s prominence in an individual’s day-to-day life.

Rather than having these decisions debated behind closed doors, with no prior knowledge that they even exist, clubs do have a vital tool at their disposal, in extending a bespoke member survey to spouses and family members.

Branching out

GGA spouse and family member surveys were introduced nearly a decade ago and what we have learned during that time unambiguously supports their role in helping club leaders develop a product and service that is relevant to the whole family.

Among the headline findings collated from across North America, we found:

  1. Clubs typically underestimate utilization by spouses and families. The introduction of spouse and family surveys helped clubs better understand utilization patterns in order to:
    • Realize greater operational efficiencies
    • Develop better informed events calendars
    • Target specific groups of spouses and families with relevant information
  1. Significant variances in capital project support. Spousal and family member support can vary up to +/- 15% when compared to primary member support. Combine this with their increased involvement in the membership purchase decision, and the importance of building a plan which appeals to all comes into sharp focus.
  2. Restrictions to access are a key concern. When contemplating any membership alterations which involve increased time and/or amenity restrictions, input from all member categories will help to arrive at more reasonable, rational and accepted changes and mitigate any negative impact to satisfaction levels.

A club for the entire family

Identifying the importance of both spouses and families is one thing, making changes to the club operation to increase their satisfaction levels (alongside those of primary members) is another.

Do the benefits outweigh the time and resource investment?

If it’s about an underlying connection, then yes. More interaction with spouses and family members will inevitably put the club more front-and-center in their minds, and help clarify its attributes and future role among these individuals.

There are more reasons to engage this audience too:

  • It improves buy-in for future decisions (as supported by survey findings). For example, if family members indicate their dissatisfaction with the current junior leagues at the club and provide insight on how they wish to see them improve, they are more likely to participate after the club implements an updated junior league program.
  • Spouses and family members will feel valued, and appreciate their opinions are being solicited, captured, and considered with care.
  • With the increasing influence of spouses and families on lifestyle and recreation choices, engaging them can help shape the future relevance and strategy for the club and drive overall membership sales.
  • A key challenge for clubs around the world is finding and engaging young prospects to grow the membership pipeline within the club. Collecting feedback from family members can identify the key drivers for this demographic and help position the club to best appeal to this group.

Moving out of the comfort zone

It may seem counter-intuitive to develop a future vision for your club formed from the views of those who may appear not to spend a great deal of time there.

However, across the world we are witnessing clubs making moves towards developing amenities and services which appeal to the entire family and encourage them to spend more time there. These are the clubs already profiting from family and spousal survey insights, building out the core of their membership to now include spouses and family members, and simultaneously becoming a more appealing destination to prospects.

Taking the first steps are difficult, but by seeking a wider base of opinions you might be surprised by what you learn and the future opportunities that arise.

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