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Publication Date: Tue, 11 Jul 2010 04:00:00 GMT
The Golf Column: Down and Out at the Club
With an economy deep in the tank, fewer people have money to spend on luxuries such as golf and country club memberships. The real estate collapse, followed by the collapse of stock prices (and dividends) of companies like Bear Sterns, Merril-Lynch, Wachovia cut into the security and income of the nations' upper and upper-middle in 2009. The Ponzi Scheme of Bernie Madoff defrauded thousands of investors of billions of dollars in late 2008 and early 2009. any of those folks have folded and declared bankruptcy.
Many of those effected by recent financial disasters were members of private golf and country clubs throughout the United States. Last month, the National Golf Foundation (NGF) reported that most of the 4,400 private golf clubs in the U.S. have seen a drop in membership and rounds played. The average membership numbers are down around 13 percent. Up to 15 percent of the private clubs are categorized as 'seriously challenged.'
Hardest hit are, and will be, the newer clubs that sprung up during the real estate boom of the late 80s and early 90s. An example in the Carolinas is Firethorne Country Club of Charlotte, who recently failed to make payments on millions of dollars of loans, turning into a messy public legal battle with its lender.
Older main-line clubs, such as those founded before the 1940s, usually have little debt except for recent course clubhouse renovation. Most of these are in the 'safe' category - for now. However, one story got to us about an old-line private club that held a recent membership drive, reducing their initiation fees by 90%. When the Board of Directors reviewed the applications of six potential new members, they elected to decline to admit any of them, saying they would rather close than admit the 'wrong kind of people.' You can bet those quarterly dues at that club will be increasing beginning January 2011!
A related problem is the number of people playing golf. The Carolinas Golf Association (CGA) tells us the number of golfers in North and South Carolina - traditionally one of the largest assemblages of golfers in the nation - dropped by more than 5,000 between 2008 and 2009. This correlates with another, frightening, number from the National Golf Foundation showing rounds played in North Carolina in December 2009 were down almost 40 percent from the year before.
The number of golfers nationwide was down 3 percent in 2008, at just under 29 million. The Carolinas has seen its decline in membership, dropping almost 10% between 2001 and 2009, with just over 175,000 Carolina golfers in 2009.
Along with financial problems and a simple lack of funds, lower private club memberships are a result of a change in peoples' lifestyles. Younger, potential members, do not feel they have time to follow a round of golf with an hour or two session of cocktails and dinner at the club. Dress codes such as collared shirts in the bar and prohibition of cell phone use on the course and in the dining room don't fit with their Internet-connected lifestyles.
The NGF and the CGA reported the number of private clubs in the U.S. peaked at 4,898 in 1988, and has dropping steadily since the mid-1990s. The average age of a golfers at private clubs is 55 with an average household income $124,000, eight years older than public clubs. The average country club member spends $2,057 a year on golf.
The number of golfers nationwide fell 3 percent in 2008, to about 28.6 million. In the Carolinas, there were about 176,400 golfers last year, compared with 193,000 in 2001. About 20 percent of existing club members are 'on the fence' about whether they will be members in five years.
On a positive note, many private clubs are initiating 'membership drives' and are reducing hefty initiation fees - even to the point of waiving them alltogehter. For their cash flow, it is good business to have an additional 20 members paying $500 per month in dues. If you are in the market for joining a private club, call their membership office. You might be pleasantly surprised to find they have reduced or eliminated their initiation fees.
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