RubinBrown Private Club Stats 2014

Executive Summary

General Industry Economic Update Five years ago, in the 2009 edition of this publication which covered the period following the economic collapse, clubs experienced an average decline in total membership of approximately 5% which was an average net loss of 14 regular members during that period. The 2014 statistics depict a recovery to 2009 levels with clubs experiencing an average net gain of 14 regular members . However, clubs continue to struggle with social and other classifications of membership, averaging a net loss of 6 social members during the year. Although clubs have experienced a net gain in membership, the membership base for most clubs continues to be below the levels necessary to maintain a “balanced budget” without operating assessments and/or cost reductions. Membership dues rates increased by an average of 2.8%, and in half of the clubs surveyed, this was accompanied by an operating assessment to fund deficits incurred during the current or previous years. Golf Operations Extreme temperatures accompanied by severe drought grabbed the headlines for the previous golf season, while this year’s news was rain, rain, rain. Although Mother Nature can be inconsistent, extreme heat and rain deter golfers equally. So it is not surprising that the total rounds of golf remained consistent, with the annual average number of rounds of golf (18 hole equivalents) of 16,200. Given the weather extremes, golf course maintenance expenses declined with water utilization accounting for half of the decline. The average golf course maintenance costs on a per hole basis decreased from $58,900 to approximately $53,700. Significant golf course capital improvements at several clubs during the year increased the average to more than double the previous year.

Rebounding State of the Industry Clubs continue to strive to remain relevant for the next generation of members and also must continue to focus on: • Actively and continuously rebuilding membership at all levels • 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 • Adequate planning for significant capital projects Use of the Study Thanks to the many area club controllers and general managers who participated in our annual survey. We 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.

Pro Shop Operations Gross profit margins on merchandise remained comparable to the previous year with an average of 20.5% .

Food and Beverage Operations Competition from public restaurants in terms of menu pricing continues to put pressure on club dining. Club management and boards remain reluctant to fully absorb increases in food and beverage costs by increasing menu pricing. The net result was a slide in food and beverage profit margins from previous years, coming in at 56.7% and 64.0%, respectively.

Clubs reported an average net loss (after all direct costs and labor) from food and beverage operations of approximately $96,000.

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