THE IMPACT OF DOING NOTHING… Stewart Darling Non-Executive Director
The golfing landscape is a challenging one… The golfing landscape is a challenging one…
Membership Decline Full Golf Members - Actual 230 220 210 200 190 Members 000’s 180 170 160 Amalgamation 150 140 Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Despite a boost from the 2014 Ryder Cup - club membership in Scotland has been in decline for 10 years
If this trend continues the number of club members (full) will fall by 26,000 (15%) in the next 5 years - and by 51,000 (29%) by 2027 Full Golf Members - Actual and Projected 240 220 200 Members 180 000’s 160 140 120 100 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Year
Membership Numbers Drop > Fees Increase 2017 2022 2027 Full Members 173,000 147,000 122,000 Average Club Members 302 255 210 % Decline 15% 29% Average Member Fee £478 £640 £880 % Increase (Inc. Inflation) 34% 84% Fees will need to rise substantially to maintain club revenue at current levels if clubs are unable to recruit new members or establish alternative income streams Includes Inflation Assumption @ 2.5%
What factors are driving the decline?
Factors 1. An ageing demographic - older generation leaving membership combined with low levels of retention and recruitment of younger members 2. Emergence of a time poor ‘Squeezed Middle’ questioning the value for money of club membership 3. A market saturated with courses combined with greater course accessibility and the low cost of a visitor round has made membership unnecessary
We have an ageing demographic - and as the older generation leave the game they are not being replaced by new younger members Demographic by Age 57,500 33.07 44,500 25.5 33,000 19 17,300 11,300 9.94 6,000 4,500 6.49 3.44 2.56 0-17 18-24 25-34 35-44 45-54 55-64 OVER 65
Club pricing strategies have in many cases also led to a certain club members paying higher fees 57,500 FULL FEE 33.07 44,500 25.5 DISCOUNTED 33,000 FEE DISCOUNTED FEE 19 17,300 11,300 9.94 6,000 6.49 4,500 3.44 2.56 0-17 18-24 25-34 35-44 45-54 55-64 OVER 65
Has this pricing created a ‘Squeezed Middle’ paying the highest fees but with greatest family and time pressures - membership is a value for money judgement SQUEEZED MIDDLE 57,500 33.07 44,500 25.5 INSPIRATIONAL STALWARTS 33,000 UP & COMING FUTURE 19 17,300 11,300 9.94 6,000 4,500 6.49 3.44 2.56 0-17 18-24 25-34 35-44 45-54 55-64 OVER 65
In a game with many characteristics that should be attractive to women - golf has simply not adapted well enough to what women want Gender Split % 86.65 MALE FEMALE 13.35 Our working population by gender is now split 50/50 - but have golf clubs adapted to this shift in working dynamics to attract new women members - e.g. weekend availability
To broaden revenue opportunities clubs must consider how best to attract some obvious groups that emerge from these demographics and lifestyles 1. Working parents with young families - seeking more friendly environments where golf is not a guilty pursuit due to time spent away from the family 2. Women - but we have to create the right environment in a game that women perceive as being dominated by older males and not welcoming 3. Young People - the future of our clubs and our game - create the right environment and get them hooked on the game for the long term 4. Older People - to enjoy the health benefits, companionship, fun and social opportunity that makes golf unique
Feedback also suggests that over the last 10 years membership fees have increased whilst visitor fees have flatlined or even decreased Membership Fees versus Visitor Round 1.6 1.4 1.2 Price 1 Index 0.8 0.6 0.4 Membership Fee Visitor Round 0.2 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 12% of clubs in Scotland receive 82% of visitor revenue!
Using a real example of a community club that has invested heavily - membership fees have outstripped inflation whereas green fees have lagged inflation Subs v Green Fees - Real Life Example 300 60 50 250 40 30 Subs Cost Green Fee 200 20 10 Year 150 - 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Subs Inflation Subs Actual Green Fee Actual Green Fee Inflation Actual 2007 Inflation 2016 Actual 2016 Subs £210 £267 £290 Green fees £38 £48 £30
So what does this mean for club membership? In 2007, the cost of a visitor round relative to the membership fee meant that on average a golf club member had to play 20 rounds of golf to justify their membership In 2017, on average a golf club member now needs to play in excess of 40 rounds
It is equally difficult to contend that competitive golf is the reason many people maintain a club membership 1. Only 53% of all members played in a formal golf competition this year 2. Only 47% of members submitted cards with 3 or more qualifying scores to gain or retain a handicap 3. If those without a handicap are social golfers (or not formally competitive) it is easy to understand why: i. A combination of this and low round pricing could compel current members to become pay as you go nomadic golfers ii. Value for money becomes an issue if busy club fixture calendars make social golf more difficult to access at peak weekend times
Has a combination of all these factors driven an increase in those questioning membership value and the rise of the nomadic golfer? 1. How sustainable is visitor round pricing relative to membership fees if it is driving people out of membership ? 2. How can we seek a greater contribution from nomadic golfers to the maintenance of our courses and clubs - and the development of our game ? 3. Is club membership or pay as you go the best way forward - is there an optimal future club structure that can accommodate both ? 4. Have clubs got the competitive versus social golf balance right particularly at weekends - or are we simply driving social golfers out of membership - what do we mean by social golf ? 5. With less than 50% of members having an official handicap - how are the other 50% of members getting value for membership if the cannot play in formal competitions ?
What do members and non-members want from a golf club?
Friends and family are a key source of inspiration and encouragement to get non-golfers playing the game - and there are compelling health reasons
Feeling that you need to play to a certain standard before you can join a club is the biggest barrier after cost
A great course, conveniently located, with good facilities including opportunities to socialise are key motivators for joining a club
Fresh air, fun, friends and fitness are key motivators to play golf – in the chaotic world we live in competitive golf is much less of a motivator
Recruiting more families and women to the game will be tough as clubs are not generally perceived to be welcoming to women & children
Once members, what do golfers want and value from their membership on and off the course
Combining all of the research what does the ideal golf club look like and what must it excel at offering
In addressing the challenges facing the game there is no time to waste and certainly no room for complacency
Brilliantly executing what golf club members value in their membership is absolutely critical for clubs - and they will simply go elsewhere if it isn’t Importance Satisfaction Condition of the golf course 8.93 8.24 Governance and Management of the club 8.35 7.32 Great customer service 8.26 7.59 A sense of membership satisfaction/value 7.94 7.75 A welcoming Clubhouse 7.92 7.22 Good Food Quality 7.43 6.62 Member Services/belonging to club 6.86 7.09 Beverage 6.78 7.31 Provision of competitions 6.71 6.65 Professional / Retail 6.18 6.26 Social events 4.4 5.31
Regularly surveying members (customers) is a great habit • However this provides little insight into the external factors which are rapidly transforming consumer behaviour and disrupting the landscape in which golf and golf clubs operate. • We have no control over these external factors and they will continue to evolve at an unrelenting pace. • All of this combined will subject our clubs and our game to increasingly strong headwinds if we cannot successfully adapt.
It’s not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change - Charles Darwin
Our game has struggled to respond successfully to generational, economic, and technological change - more is on the way and it will take no prisoners Generational Diversity Brexit Uncertainty Complex Legislation Big Data and Insight Rising Input Costs Connectivity - Social Media
For example new GDPR laws will increase individual privacy and give the authorities greater powers to take action against those that breach the law
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