Having discussed how boards can jeopardise a golf club’s future, this month we delve into how clubs must find their niche if they’re to survive in an ever-changing world.
Golf clubs have been and always will be about a great social environment for people to enjoy the game of golf. But what has changed is the environment in which golf clubs operate.
Today’s consumer is a 24/7 socially active person, accustomed to having everything at their fingertips: Internet shopping, ordering a pizza over the phone, downloading a movie or slipping down to the gymnasium that never closes.
Golf clubs are the victim of the way society has changed. Look at cricket to see the evolutionary change in social habits. Forty years ago, the success of Kerry Packer’s World Series Cricket saw the 50-over international replace Test cricket as the most popular form of the game. Now an even shorter version, Twenty20 cricket, is the most popular format. Who could have imagined a domestic league (the Big Bash) becoming a ratings bonanza for the Ten Network, which had no previous experience as a cricket broadcaster?
Tomorrow’s club member thinks entirely differently to the member 10 years ago, even five years ago, let alone 20 or 30 years ago. Saturday and Wednesday competitions don’t necessarily fit the lifestyle choices of men and women who work full-time.
The annual subscription fee at Melbourne’s Metropolitan Golf Club has reached $6,000. That’s a lot of money for a young family man (or woman) to incur when paying off a home loan is the No.1 priority.
There needs to be more flexibility in the type of club membership, rather than simply playing and non-playing. Why aren’t there six other categories from which to choose? AFL clubs offer full season and three-game memberships. They offer reserved and unreserved seating as well as general admission. Cheaper memberships are available for families, concessions and juniors (even pets). Let’s not forget it wasn’t all that long ago women were classed as associate members of golf clubs.
The definition of a golf club is no longer set in stone. It covers a broad spectrum, ranging from the traditional model to something with just a passing resemblance to golf.
Some clubs are determined to retain their customs, which in the case of Muirfield has seen it stripped of British Open hosting rights after rejecting a proposal to admit women to one of Scotland’s last remaining male-only clubs.
Meanwhile across the Atlantic, the US PGA Tour and LPGA have entered into a strategic alliance with Topgolf, the driving-range phenomenon sweeping America. Little wonder given Topgolf has attracted eight million guests across 21 locations in 12 months (many of whom had never previously swung a club). That the world’s leading men’s and ladies’ pro tours have endorsed Topgolf shows their willingness to embrace grow-the-game initiatives.
Australian clubs need to find their niche, rather than blindly following the constitutional British model of how a golf club should function. That democratic system of governance – with annual general meetings and board elections – appears more archaic than ever in a 21st Century world that rewards the agile and prescient.
The local golf club scene appears to be still hung over from the Greg Norman-inspired boom of the 1980s and 1990s when clubs were busting at the seams with lengthy waiting lists of golfers willing to pay a sizeable lump-sum joining fee.
With slightly more than 50 per cent of Australian clubs under financial stress, the fear is we will see more suffer the same fate as Kingswood, a fine golf course in Melbourne’s southeast. While the club survived after a merger with Peninsula, the course will become a residential development.
The Kingswood experience should be a wake-up call to all clubs. To protect against becoming the next Kingswood, clubs need financial stability and a practical golf asset.
STRIVING FOR FINANCIAL STABILITY
Most golf clubs need to look at ways of reducing costs or increasing revenue. It stands to reason the best way to increase revenue is by using existing club facilities for other purposes.
A number of clubs have ventured into the functions market, especially wedding receptions. That’s understandable given Australia’s wedding industry is said to be worth $4.3 billion annually. But easier said than done.
Manly Golf Club on Sydney’s northern beaches has blitzed the competition. For each of the past three years, it has been awarded the nation’s best wedding facility for a ‘Club Reception’ by the Australian Bridal Industry Academy (ABIA).
That’s an outstanding result considering Manly was competing against bowling clubs, leagues clubs, sailing clubs, surf clubs and RSLs. Other golf clubs to impress were Arundel Hills (Top 3), St Michael’s and Ryde-Parramatta (Top 5), and The Grange (Top 10).
Each year Manly hosts 35-40 wedding receptions in its Georgian/Mediterranean style clubhouse originally designed by club legend Eric Apperly in 1923.
Manly’s three points of distinction have been an outstanding facility, fine dining and an excellent reputation for service. “It’s a hard slog,” says Manly general manager Nigel Gibson, who acknowledges there has been a 10-15 per cent decline in guest numbers across the wedding industry.
“Every golf club will probably get a few, but if you want to be successful at it, you’ve got to have those three components working for you. Or at least two of them being very strong.”
Turnover from weddings has afforded Manly the luxury of maintaining its golf facility as a top-end product. The private club no longer relies on revenue from corporate golf.
Elsewhere at St Michael’s Golf Club, the seaside private course in Sydney’s eastern suburbs reaps more revenue from weddings (about $600,000) and corporate golf ($1 million) than it receives from members’ annual subscriptions ($1.3 million).
“In the past it was only about golf and only about the golf course,” says general manager Jeff Wagner. “A golf club can’t rely [on its reputation] because it has a magnificent view or because it’s prestigious with the name and has a vintage clubhouse.”
St Michael’s was forced to seek alternative revenue because of a rule in the club’s constitution. At 65 years of age, members with 20 years of service pay half the annual sub. At age 70 and 30 years of service, the sub is equivalent to the non-playing fee of $100. The veteran membership category comprises 60 members of whom 40 play three days a week. The rule was introduced about 35 years when there were no electric carts and before advances in prescription medicine. (Just recently a 97-year-old member had a hole-in-one.)
Of course, many clubs don’t have the amenities to cater for weddings or a top-class course to take advantage of corporate golf. Second-tier clubs often tend to rely on income from green fees to break even. While they need rounds ticking over, they also need to be wise about how they chase the green-fee dollar.
The proliferation of discount coupons has made it increasingly difficult for clubs to make a buck given that golfers are less inclined to pay the rack rate. We’ve all heard about the detrimental effect of discounting on retail fashion. So the danger is that if the discounting war continues, the golf industry will cannibalise itself.
Another challenge facing clubs is that it’s possible to obtain and maintain a Golf Australia-endorsed handicap for $95. Jump online and away you go. It was designed with the well-intentioned objective of increasing participation and providing a pathway to club membership. But if you can compete in Open competitions around the city, where is the incentive to join a second or third-tier club?
It’s worth asking what percentage of golfers in your club is aged over 55? Common sense tells us that percentage of the club’s current revenue is going to disappear in the next 15 years. So where is that next generation of income coming from? Hence, financially challenged clubs will continue to face an uncertain future if they don’t come up with a whole bunch of alternative ways to utilise their golf course and its facilities.
“The top-tier clubs can head down the golf-only path whereas the other ones need to look outside the square,” Manly’s Gibson says.
From his past experience as a PGA professional and president of a small AFL club, Gibson thinks golf clubs need to become a bit of a local sporting hub and tap into sporting groups around them. For example, soccer clubs don’t necessarily have a clubhouse but they need somewhere to socialise and make post-match presentations. The same goes for cricket, netball and other team sports.
But for one reason or another, there has been a reluctance of golf clubs to embrace other sporting organisations in the same way as leagues clubs, RSLs and even pubs. You can probably attribute it to the good ol’ days when the Great White Shark ruled the world and golf clubs didn’t need to open their arms to outsiders.
On that point, service is an area where most golf clubs can improve. They need to welcome visitors rather than look down upon them because they’re not ‘a member’. The golf shop is very important because it’s usually the first port of call for a visitor. The bar and dining areas are crucial since the clubhouse experience can leave a lasting impression.
Golf clubs occupy a beautiful landscape for people to enjoy recreational activities. Yet most clubhouses would be lucky to be filled to capacity once a week. Why can’t they hold denim-pizza night on Tuesday evenings? Or why can’t they have a tradies’ afternoon?
One of the biggest issues in society is the lack of affordable childcare facilities. Many suburban golf clubs have the land, the space for car parking and the location (but perhaps not the inclination). Why couldn’t a golf club become the local childcare centre during the week when the place is empty? Replace the locker room with a crèche. Couldn’t most members store their clubs at home or in the boot of the car?
Increasingly, golf will have to justify its value to the wider community. As urban Australia accommodates higher density residential development, it stands to reason there will be competition for green space. Councils and other landlords aren’t obliged to set aside recreational space for golf.
The sport must offer benefits to the wider community. That could be in the form of walking paths or cycling tracks around the perimeter of the course (with appropriate safety screening). Or it could be through introducing a new activity, such as FootGolf with local soccer clubs.
Golf courses are a more suitable location for mobile phone towers considering the World Health Organisation classifies non-ionizing radiofrequency radiation as a potential carcinogen. Already, some proactive golf facilities (such as Portsea Golf Club) have recognised that accommodating phone towers on their course can generate some additional revenue.
BUILDING A PRACTICAL GOLF ASSET
Apart from living within their means, golf clubs need to accept their course’s limitations. Consider that just 11 courses have staged the men’s Australian Open in the past 40 years.
Since it’s unlikely that 99.3 per cent of the 1,600 courses around the country will host an Australian Open any time soon, why do we have an abundance of clubs seeking a championship-length course of 6,000-plus metres and a par approaching 72?
Most courses would be better off if they sacrificed quantity for quality. I’m convinced you could lop four strokes from the par of just about any course in Australia – from par 70 to 66 or par 66 to 62 – and utilise the reclaimed land to create a better golf experience.
Shortening the par by four shots would open up the equivalent of six football fields (600-800 metres) for superior golf, better practice facilities and/or improved clubhouse amenities. Besides that, it would result in quicker rounds. And would it really matter if a reduction in par resulted in three or four consecutive par 3s?
Clubs must do more to enhance the golf experience and a simple way to achieve this is by creating adequate practice facilities. One of the simplest pleasures is to arrive at a course and see a driving range lined with balls stacked in pyramid formation and a nicely mown putting green with flagsticks evenly spread. As a golfer, you’ve been given every chance to warm up and prepare for the round.
Yet the lack of adequate practice facilities is a major blight on most suburban courses. But an even greater disappointment appears to be that clubs have little appreciation for how practice facilities can enhance the golf experience. It’s almost as if some clubs regard a practice putting green as an inconvenience.
They would be well advised to consider the ‘Himalayas’ putting green at St Andrews, which sits to the right of the second tee on The Old Course. This 18-hole course run by the St Andrews Ladies Putting Club is a great example of a fun-filled golf experience to be enjoyed by the beginner through to the accomplished player. Spread over two acres (0.8 hectares), it’s full of humps and bumps, hollows and swales, valleys and pockets that can challenge young children and amuse adults in their 80s.
Sustainable course maintenance seems lost on most clubs. Recent travels have taken me back to some of the public-access courses I used to play as a teenager. What disappointed me the most was the deterioration in course maintenance. In all probability, maintenance budgets had been slashed and the number of greenstaff cut to a bare minimum.
But time and again, I’ve seen holes destroyed by the canopy of a tree that interferes with the line of play. All too often, trees have been planted within 60 metres of green complexes. Not only can this reduce the amount of sunlight required for good putting surfaces, the turf around the greens is often bare because water is sucked away by tree roots. How do board directors and members not realise there’s a problem?
Many golfers tend to rate courses on aesthetics, scenery and conditioning. So wouldn’t it make sense if clubs rearranged their course to accommodate 19, even 20 holes? Take one hole out of play every day/week so maintenance can be carried out.
Twilight golf is becoming increasingly popular. Could club life during spring and summer revolve around twilight golf? Protect the traditional Saturday timeslot, but rearrange Thursday, Friday and Sunday around twilight golf.
More novel formats should be introduced at the expense of Stroke, Stableford and Par. Everyone has heard of a game played at another club where golfers have a huge amount of fun with a peculiar twist.
Golf clubs have to focus on the ‘experience’. The top-tier clubs will never change because they don’t need to change since there is an ongoing stream of aspirational golfers wanting to join.
Those less fashionable have to build a better golf experience. Fail, and they could face the prospect of merger – or worse, the very real prospect of extinction.