RubinBrown Country Club Stats 2011

Country Club Stats

2011

A Publication of RubinBrown LLP

Executive Summary

Contents 1 Executive Summary 3 General Club &

Membership Information

4 Income Per Member 5 Operational Information 7 Golf Operations

10 Food & Beverage Operations 11 Personnel & Other Information 12 RubinBrown’s Hospitality & Gaming Services Group

RubinBrown is pleased to present our 2011 Country Club Statistical Analysis. Our survey results represent responses from 14 St. Louis metropolitan area clubs with fiscal year ends that ranged between September 30, 2010 and March 31, 2011. General Industry Economic Update In our previous edition of the survey covering St. Louis area clubs, we noted that clubs experienced an average net gain of one regular member, but with substantial work and effort to fill an average of 25 regular member resignations during the year. For years ending from September 2010 to March 2011, it appears that the same level of work and effort was needed as an average of 23 regular member resignations led to a net loss of one regular member during the year. It appears that social and other classifications of membership have taken the biggest hit this past year with an average net loss of seven social members during the year. Social and other membership classifications typically do not have as strong of a connection to clubs as regular members which has made it difficult to retain these members during the current economic state. Although the attrition has subsided from the peak in 2008-2009 (an average net loss of 14 regular members during that period), the membership base for most clubs continues to be below the levels necessary to maintain a “balanced budget” without continued cost reductions and reduction of headcount.

1 | Raise Your Expectations

Clubs continue to aggressively battle to increase membership at all levels and increase utilization of clubs in all areas by the members and guests. Dues rates increased by an average of 1.6 percent and were often accompanied by an operating assessment to fund deficits incurred during the past year. approximately 3% due to poor weather conditions and a decline in special event activity, with the annual average number of rounds per 18-hole equivalents decreasing from 16,400 as reported last year to approximately 15,900 for the most recent period. • Average golf course maintenance expenses remained comparable to the previous year. The average golf course maintenance costs on a per hole basis rose from $49,300 to approximately $49,600. Golf Operations • Total rounds of golf declined by Food and Beverage Operations • Clubs experienced an increase in food and beverage revenues of nearly 6% as compared to the previous year, with increased banquet/event activity accounting for the better part of that increase. – The uptick in banquet/event activity improved the average food profit margin to 58.5%. Profit margins for beverages increased approximately 3/4ths of a percentage point to 66.4%. • Increasing food and beverage revenues drove the total food and beverage labor and fringe benefits as a percentage of total food and beverage revenues downward to an average of 69.3% from the prior year of approximately 75%. Pro Shop Operations • Gross profit margins on merchandise increased nearly one percentage point from the previous year to an average of 17.1%.

• Clubs reported an average net loss (after all direct costs and labor) from food and beverage operations of approximately $73,000 for years ending between September 2010 and March 2011. – This average loss decreased approximately 56% over the prior reporting periods. In order for the club marketplace to rebound, substantial help from the economy and continued focus by club management and boards is needed in the following areas: • Actively and continuously rebuilding membership at all levels • Building a family atmosphere for the next generation • Increasing membership utilization of services in all areas • Aggressively controlling costs and expenses • Managing cash flow for debt service, capital improvements and operations • Retaining quality employees and providing excellent service • Complying with increasingly complex government and tax regulations Thanks to the many area club controllers and general managers who participated in our annual survey. RubinBrown advisors encourage club managers, controllers, board members and others to use these statistics as one of many tools in evaluating their club’s operations. Please keep in mind the wide range in size and diversity in club operations throughout the St. Louis metropolitan area when comparing your financial and operating results to averages contained herein.

Jim Mather, CPA Partner Hospitality & Gaming Services Group

Jeff Sackman, CPA Manager Hospitality & Gaming Services Group

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General Club and Membership Information

1. Number of clubs participating in survey

14 clubs

Average

2. Maximum number of regular club members allowed

434

3. A. Current number of regular club members

313

B. Current number of junior/intermediate members

38 45 62 35

C. Current number of senior members D. Current number of social members

E. Current number of other classifications (excluding nonresidents)

F. Current number of total members (excluding nonresidents)

493

4. Number of clubs with a waiting list of prospective members

3 clubs

Average

Median

5. A. Number of new members added during the year: Regular

22 11

16

Social

5

B. Number of members lost during the year: Regular

23

23

Social

9

8

C. Net loss in regular members from the prior year

-1

-7

6. Number of clubs planning or currently implementing significant capital improvements: Clubhouse

4 clubs 2 clubs

Golf course

3 | Raise Your Expectations

Income Per Member

Annual Dues and Assessment Revenue Per Member (A)

$7000

$5833

6,150

6,010

$4667

$3500

$2333

$1167

0

Average

Median

Annual Food and Beverage Revenue (including service charges) Per Member (A)

$6000

$5000

$4000

4,260

4,220

$3000

$2000

$1000

0

Average

Median

(A) Total members include all categories of membership (except for nonresidents)

Annual Sports Activities Revenue Per Regular Member

$2000

$1600

1,790

1,680

$1300

$1000

$700

$300

0

Average

Median

Sports activities include greens fees, cart rental, locker fees, tennis and swimming (excludes pro shop merchandise sales). This total is divided by total regular members.

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Operational Information

Average Revenue

Median Revenue

Per Member

Per Member

1. Operating revenues per member (all members excluding nonresidents) during the past fiscal year: Dues

$5,340

$5,142

Initiation fees (12 clubs)

556 537 847 495 492

349 457 807 486 495

Capital assessments (10 clubs) Operating assessments (7 clubs)

Greens fees Cart rental Locker fees

97 38

83 38

Tennis and swimming fees (10 clubs) Pro shop merchandise sales (10 clubs)

687

627

Restaurant sales Bar sales (13 clubs) Service charges All other income

2,581

2,486

922 818 394

950 750 362

$13,804

$13,032

2. Operating expenses per member (all members, excluding nonresidents): Food and beverage

$4,266

$4,270

Golf course and grounds

2,347 1,366 1,402 1,409

2,352 1,255 1,296 1,436

Pro shop (11 clubs)

General and administrative

Depreciation

Real estate taxes

307 322 351 469 981 525

294 268 271 470 914 519

Insurance

Interest (13 clubs) Utilities (10 clubs) Clubhouse (13 clubs)

Other (12 clubs)

$13,745

$13,345

3. A. Monthly dues, assessments and charges (regular members): Average monthly membership dues and operating assessments

$562

Average monthly capital assessments (9 clubs) Average monthly food & beverage minimum (9 clubs)

59 75 65

Average monthly service charge (9 clubs)

B. Average total monthly charges

$689

C. Average increase in dues for regular members over prior year

1.6%

Average

Median

4. Initiation fees: A. Initiation fee for regular membership

$22,900

$10,750

B. Refundable portion of regular member initiation fee (7 clubs)

1,440 1,360

500

C. Initiation fee for social membership (10 clubs)

1,000

5 | Raise Your Expectations

5. Average percentage of total revenue derived from outside events (not-for-profit clubs only) (10 clubs)

9.1%

6. Club borrowings and leverage A. Average bank debt per member (excluding nonresidents) (12 clubs)

$5,600

B. Average total bank debt (total dollars) (13 clubs) C. Average bank debt to membership equity

$2,420,000

1 to 1 4.9%

D. Average effective borrowing rate

(fixed rate: 11 clubs) (floating rate: 2 clubs)

Percentage of Outside Event Revenue Generated for Not-for-Profit Clubs

20%

15%

14.0

10%

9.5

9.1

5%

2.0

0

Average

Median

High

Low

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Golf Operations

Peak Season

1. A. Average guest greens fees for 18 holes Weekdays

$66 $73

Weekends

B. Average golf cart rental rates for two people playing 18 holes

$35

Average

2. A. Maintenance expenses associated with the “golf course” for the most recent fiscal year (per 18-hole equivalent): Payroll

$478,000

Payroll taxes and employee benefits (13 clubs)

79,000 85,000 25,000 49,000 29,000 19,000 70,000 21,000

Fertilizer, chemicals, etc.

Fuel

Repairs and maintenance Sand, seed and sod, etc.

Supplies

Water (Those without water sources)

Trees and landscaping

All other golf course expenses

64,000 $919,000

B. Average water cost per 18 holes for those with some existing

$24,000

water source (4 clubs)

3. A. Average number of rounds of golf (18-hole equivalents) played

15,900

within the past fiscal year

B. Average number of outside tournaments held by club

13

Per Hole

4. Average amount spent on capital improvements for the “golf course”

$9,400

4. during the past fiscal year (9 clubs)

5. Average amount spent for golf course equipment for the past fiscal year (9 clubs)

$64,000

6. A. Number of clubs leasing golf carts during the year

5 clubs

B. Average annual lease cost per cart (for clubs that lease carts) C. Average purchase price per cart (for clubs that purchase carts)

$815

$3,900

7. Number of clubs owning the golf pro shop

10 clubs

Average

Median

8. A. Gross profit margin on merchandise for those clubs that own the pro shop (8 clubs)

17.1%

17.6%

B. Average commission paid on pro shop sales (3 clubs)

5.7%

Inventory Per Regular

Total

Member

C. Average pro shop inventory levels (9 clubs): Peak season

$147,000 $106,000

$520 $380

Off season

D. Average pro shop inventory turnover per year (7 clubs)

1.4 times

7 | Raise Your Expectations

Composition of Total Rounds of Golf

100%

80%

78

60%

20%

16

6

0

0

From Members

From Guests

From Outside Tournaments

From Public

Total Golf Course Capital Improvements Per Regular Golf Member (8 clubs)

$800

730

$640

$480

$320

$160

160

0

Average

Median

Total Golf Course Maintenance Per Regular Golf Member

$500

$400

$300

3,380

3,160

$200

$100

0

Average

Median

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Golf Operations (continued)

Combined Golf Course Maintenance and Capital Improvements Per Hole

$30,000 $20,000 $10,000 $50,000 $60,000 $70,000 $80,000 $40,000

55,700

49,000

0

Average

Median

Golf Course Maintenance Per Hole

$60,000

$50,000

49,600

$40,000

46,700

$30,000

$20,000

$10,000

0

Average

Median

Golf Course Maintenance Per “Mowable” Acre

$10,000

$7,500

6,700

$5,000

5,700

$2,500

0

Average

Median

9 | Raise Your Expectations

Food and Beverage Operations

Average Median

High

Low

1. Gross profit margin on food sales (excluding service charge income and mandatory gratuity income) 2. Gross profit margin on beverage sales (excluding service charge income and mandatory gratuity income) 3. A. Percentage of food and beverage payroll and fringe benefits to total food and beverage revenues (excluding service charge income and gratuities) B. Percentage of food and beverage payroll and fringes to total food revenues only (excluding service charge income and gratuities)

58.5% 58.6% 70.0% 47.4%

66.4% 67.4% 73.1% 56.4%

69.3% 68.3%

94.5% 97.3%

4. Average service charge on food and beverage: A. Percentage (5 clubs)

19.6%

B. Flat monthly charge (8 clubs)

$63

5. Average employee meal allowances as a percentage of total food and beverage revenues

2.9%

6. Average menu pricing increase for the past fiscal year (11 clubs)

2.5%

7. A. Average percentage of a la carte food sales to total food sales

54.7%

B. Average annual a la carte food sales per member (total members, excluding nonresidents)

$1,360

8. A. Average food and beverage inventory levels: Peak Season (13 clubs)

$91,000 $77,000

Off Season (13 clubs)

B. Food and beverage inventory per member (total members, excluding nonresidents): Peak Season (13 clubs)

$190 $165

Off Season (13 clubs)

9. Average net loss from food and beverage operations (net of all food and beverage expenses including payroll)

<$73,000> <$64,000>

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Personnel and Other Information

Average

Median

1. Annual base salaries for the following positions: Course and Grounds Superintendent (12 clubs)

$108,000

$99,000 97,000 57,000 79,000 49,000 44,000 39,000

Executive Chef (12 clubs)

93,000 65,000 78,000 49,000 48,000 41,000

Food and Beverage Manager (12 clubs)

Controller (10 clubs)

Office Manager (5 clubs)

Maitre D' (4 clubs)

Membership Marketing Director (9 clubs)

2. Base salary of golf pro before additional compensation (12 clubs)

$82,000

$83,000

3. Health insurance costs (12 clubs): A. Average percentage of health insurance premiums and costs to total salaries and wages B. Average increase in health premium cost over previous year C. Average percentage of premiums paid by club on behalf of employees (percentage of the total premium covered by the club) D. Average percentage of premiums paid by club on behalf of employees’ dependents (percentage of the total premium covered by the club) (4 clubs)

7% 7%

83%

73%

4. Average number of employees utilized in the following areas:

Peak Season Off Season

Golf course and grounds (11 clubs)

19 33 18 10

10 19 14

Restaurant and bar (non-kitchen) (11 clubs)

Kitchen (11 clubs) Clubhouse (10 clubs)

6 5 5 4

Office and administration (11 clubs)

6

Pro shop (11 clubs) Other (11 clubs)

16 15

Total employees

117

63

Average

5. Employee productivity and utilization A. Average employee total hours worked (10 clubs) Kitchen/restaurant and bar

61,700 27,000 13,800

Golf course grounds

Pro shop

B. Average annual hours worked per employee (10 clubs) Kitchen/restaurant and bar

1,350 1,590 1,240

Golf course grounds

Pro shop

C. Average payroll and benefits cost per hour worked (10 clubs) Kitchen/restaurant and bar

$18 $21

Golf course grounds

11 | Raise Your Expectations

RubinBrown Hospitality & Gaming Services Group

Recognizing the complexities surrounding the hospitality and gaming industry are unique, RubinBrown has established a dedicated group to serve these organizations. RubinBrown is recognized as a leader in the hospitality and gaming industry and currently serves clients spanning across the nation. As one of the largest public accounting firms in the region, our team is experienced in providing a comprehensive range of services and close personal attention to our clients. The RubinBrown Hospitality and Gaming Services Group includes experienced professionals, all of whom possess high levels of industry experience, as well as the tools essential to serve all types of hospitality and gaming organizations. To better serve our hospitality and gaming clients and focus on complex issues faced by different facets of the industry, we have aligned our resources in segments. Our eight segment areas of focus are: • Gaming - Commercial • Gaming - Tribal

• Grocery • Hotels • Private & Semi-Private Clubs and Golf Courses • Retail • Restaurants • Theatres The ever-changing marketplace presents organizations with endless opportunities for success, but also drives them to continuously look for innovative ways to remain ahead of the competition. Our Hospitality and Gaming Services Team work closely with our clients to provide new ideas, approaches, analyses and best practice recommendations to add value to their operations. To stay current on issues involving the hospitality and gaming industry, members of the Hospitality and Gaming Services Group are officers and members who regularly attend and speak at industry conferences and functions.

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RubinBrown Hospitality & Gaming Services Group

• Planning and structuring • Sales & use tax refund review • Examination representation Employment Taxes • Consultation and compliance • Policies and procedures development and implementation • Tax credits • Examination representation Consulting Services Enterprise Risk Management and Internal Audit • Risk assessments and internal audits • Sarbanes-Oxley compliance • Internal control and operational reviews • Policy and procedure development and documentation • Corporate compliance audits • Forensic accounting Information Technology Audit • Payment card industry (PCI) data security standards review • Information privacy review (Gramm-Leach-Bliley) • System implementation controls design • Pre and post implementation review • IT security assessment • Network and operating system platform specific services • IT policy and procedure development and integration Financial Reporting • SEC financial reporting • IPO assistance • Merger and acquisition assistance • Business valuation • Financial forecasts, projections, and budgeting assistance • IT risk assessment/planning • IT audit project management • General computer control review • ERP and application audit

Assurance and Accounting Services • Audits, reviews and compilations of financial statements • Preparation of comprehensive management letters • Agreed-upon procedures concerning policies and procedures • Audits of pension and 401(k) plans • Adjusted Gross Receipts (AGR) audits Tax Compliance and Consulting Services Tax Compliance • Preparation of Forms 990 and 990-T • Federal, State and Local Tax preparation • Internal Revenue Service examinations Tax Consulting • Real Estate and Personal Property Tax • Ongoing compliance • Asset classification • Cost segregation analysis • Valuation review and assessment challenge • Litigation support Sales & Use Tax Services

• Compliance and consulting • Nexus (filing) requirements • Voluntary disclosure negotiation

13 | Raise Your Expectations

Information Technology Consulting Services • MAS90 and Great Plains implementation, support and training • Significant experience with POS and retail operating experiences • Retail and Pro Shop inventory management system implementation • System procedures and controls consulting • Integration with other operating systems and general ledger packages

• Cash flow analysis • Financing analysis and assistance

• Lost profit calculation and litigation support • Profit improvement and statistical comparison analysis • Market feasibility and economic impact studies Miscellaneous • Franchise audits and related agreed upon procedures • Vote tabulation • Inventory controls and procedures analysis • Membership, customer and employee surveys

Contact

Chelle Adams, CPA Partner-In-Charge Hospitality & Gaming Services Group 314-290-3329 chelle.adams@rubinbrown.com

Jim Mather, CPA Partner Hospitality & Gaming Services Group 314-290-3470 jim.mather@rubinbrown.com

Todd Pleimann, CPA Managing Partner, Kansas City Office 913-499-4411 todd.pleimann@rubinbrown.com

Greg Osborn, CPA Managing Partner, Denver Office 303-952-1250 greg.osborn@rubinbrown.com

Jeff Sackman, CPA Manager Hospitality & Gaming Services Group 314-290-3406 jeff.sackman@rubinbrown.com

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Denver Office 1900 16th Street Suite 300 Denver, Colorado 80202

Kansas City Office 10975 Grandview Dr., Building 27 Suite 600 Overland Park, Kansas 66210

Saint Louis Office One North Brentwood Blvd. Saint Louis, Missouri 63105

ph: 314.290.3300 fax: 314.290.3400

ph: 303.698.1883 fax: 303.777.4458

ph: 913.491.4144 fax: 913.491.6821

For more information, visit www.rubinbrown.com