1. Chapter 20 Golf and Club Management

2. Introduction
Within the last decade, close to 30 million Americans played golf on nearly 16,000 courses
During the last quarter of the 20th century, number of golfers increased four times faster than nation’s population, from 10 million to 30 million golfers
Courses either public or private
Private outnumbered Public until the 1960s
Development of more public courses created periods of rapid growth
Now in mature phase of life cycle

3. History
The country club originated about 120 years ago and was conceived by affluent Americans
The American economic and political climate of the nineteenth century respected individualism and eschewed inherited nobility and the caste system of Europe
As America had arrived as the world banking center, this created moneyed class of individuals who sought to spend time with people of their own kind, away from average citizens of modest means

4. History: The Game of Golf and Golf Course and Club Development
Game of Golf originated with the Royal and Ancient Golf Club of St. Andrews, Scotland
First introduced to US in Yonkers, NY with Apple Tree Gang
USGA formed in 1895
Four major periods of golf course construction
: concentrated in golf club villages
After WWI: included Augusta in 1932
1950s and 1960s: increased leisure time and affluence
1970s: Palmer and Nicklaus spurred growth

5. History: Country Club Concept
Founded in 1882, The Country Club of Brookline, located near Boston, Massachusetts, is considered to be the first country club in the United States
The rules of sportsmanship were established in the 1880s at Yale
Country Club: place located in a country-like setting with open areas and lots of green space that has a standard meeting facility: clubhouse
Members go to enjoy sports and sportsmanship, engage in activities for pursuit of happiness, develop friendships, co-mingle with friends and like-minded others

6. What is a Club? Public club – open to public
Private club – restricts membership, may either be private for-profit entity or private non-profit entity
Place not open to public
Member or individual must be accepted by rest of membership before he or she can join
Has a standard meeting place
Place where co-mingling of social, recreational, or educational purposes
Private exclusive club – restrict membership to only those who are invited to join

7. What is a Club? (cont.)
People join private clubs for a variety of reasons
Exclusive atmosphere
Statement of social position
Recreational facilities
Convenient for their types of interests
Close by their neighborhood
Club’s dining facilities
Don’t have to schedule in advance
Get ahead in business
Legacy member
Built for variety of reasons
Social reasons, help sell homes, attract visitors

8. Ownership and Types of Clubs Equity Clubs
Member-owned clubs
Typically have a private, non-profit status, not open to the public
501c7 club – IRS designation, tax exempt
Must be a club and organized for club purposes
Organized for pleasure, recreation and other non-profit purposes
Substantially all of the club’s activities must be for pleasure, recreation and other non-profit purposes
No inumment (no net earning may benefit owners)
Must not discriminate on the basis of race, color or religion

9. Ownership and Types of Clubs Non-equity Clubs
Non-member-owned clubs
Typically have a private, for-profit status
Typically owned by real estate developers, corporations, individuals or investment firms
Operated to earn a profit for owners/investors
Income is taxable

10. Club Organizational Structure
Non-equity and public golf course
Managed and directed by club’s general manager, who follows owner’s policies instead of club members’
Some club have an advisory board (no policy making authority, power or direct authority)
Equity Club
Club members elect those from its membership to serve on its board of directors (establish club policy, hire management team, including general manager)
General manager performs day-to-day operational aspects of the club

11. Club Organizational Structure (cont.)
Board of Directors
Responsibilities include establishing general operating policies, overseeing financial stability, voting on new members, handling discipline, hiring general manager
Executive Committee
Usually composed of club’s officers
Acts in lieu of full board between meetings
Other Club Committees
Standing committees - permanent committees that help the club conduct ongoing activities
Ad Hoc committees – formed for special purpose

12. Market Drivers Participation
Number of courses and types of courses available to the playing public and private club members
Condition of the course and the playing experience
Demand for quality experiences and services, restricted to high-end or unique courses

13. Market Drivers (cont.) Price to play a round of golf
Available time to play a full 18-hole round of golf
Seasonal play and weather patterns
Turf grass conditions

14. Market Segmentation
Average golfer is 37 years old
75% of golfer are men
Participation directly related to income levels
Highest rate with income >$150,00 (30%)
Steady base of approximately 5-6 million frequent golfers who play golf more than 40 days per year

15. Market Segmentation Product Types
Public (38.5% of market)
Attract individual golfers who play on an occasional basis
Private golf courses (34.1%
Yearly memberships available
Also open to public
Private exclusive country clubs (27.4%)
More full service and higher quality

16. Course Locations and Participation Levels
Over the years, the bulk of new golf course and club construction has moved both south and west
Southeastern region holds the highest percentage level of revenue
Larger number of golf courses and country clubs
Increase in the golf playing population
More golfing vacation days or visits to the region
Older and aging population and longer term residents who migrated from the northern climates who have increased leisure time availability

17. Golf and Country Club Firms
There are no dominant players in the golf course and country club industry
ClubCorp (2.5% market share), American Golf Corporation (1.2%), Century Golf Partners (1.0%), Troon Golf (1.0%), Palmer Golf (<1.0%)
Level of market share not likely to change
High fragmentation, geographic challenges in achieving economies of scale, operations not standardized, high investment costs, high development costs

18. Cost Factor Benchmarks
This sector observes a relative poor level of growing profitability
Economic downturn plus large number of non-profits
Profits largely based on achieving membership goals, maintaining or increasing attendance at various functions, and maintaining or increasing participation (use) benchmarks
Major cost factors are direct purchases (fertilizer, plants, food, beverages, golf equipment) and labor costs

19. Basis of Competition in the Marketplace
Success of golf and country club operations rely on:
Ability to attract new members, retain existing members, sell club’s amenities, maintain or increase usage
Private exclusives clubs not permitted to advertise and must seek members through referrals, incentives and other means
Geographic location of the facility may be a major influence when choosing a golf course to play
Competition can also be based on the skill level of particular players

20. Professional Staff Positions in a Private Golf Club
Management team of a golf club is made up of a group of highly skilled and trained professionals
General Manager – official executive management position (carry out policies set by the board)
Golf Professional – in charge of all activities related to the club’s golf program (certified through PGA, trained in golf instruction and management)
Tennis Professional – manage club’s tennis program (certified by USTA)

21. Professional Staff Positions in a Private Golf Club (cont.)
Golf course superintendent – in charge of maintaining golf course’s green environment and playing areas in an ideal playing condition (typically has a degree in turf management or agronomy, usually certified )
Aquatics Director– head swim professional (Red Cross offers training and certification)
Spa Director– rapid development of new day, resort and club spas (National Certification Board offers certification)

22. Professional Staff Positions in a Private Golf Club (cont.)
Club house manager – general manager’s second in command
Controller– develops and oversees policies to control and coordinate accounting, auditing, budgeting and related duties
Executive chef– responsible for all food production
Banquet or event manager – promotes the club’s dining facilities
Membership director – help identify, close and/or introduce and oversee club membership categories and club’s waitlist

23. Strategies for Entering Golf Management and Club Operations
Largely achieved by following the strategy to become a certified club manager (CCM)
Students may accumulate certification points while still in school
Pursue positions as assistant professionals who teach and direct these sports for membership
Success requires combination of club management expertise, sport and food service knowledge and general business skills
Degree programs in club management in a hospitality program, sport management, and exercise science or professional golf management are particularly relevant

24. Strategies for Entering Golf Management and Club Operations
Largely achieved by following the strategy to become a certified club manager (CCM)
Specific knowledge in sport instruction and event planning
Connect with the Club Managers Association of America (CMAA), PGA or USTA
Golf professional may pursue a golf management degree
For turf management, can gain a turf management degree generally in an agronomy, plant, soils, or turf management from an agricultural college or university

25. Pay Scales and Salaries
Club staff and employees often enjoy wages and benefits competitive with or even higher than those of other employees in the hospitality industry
It is not unusual to find club line employees who have worked at their clubs for decades
Private for-profit and public facilities – wages typically lower

26. Entry Level and Mid Management Salary Scales
The two fastest growing positions in clubs are membership manager/director and director of technology
Assistant manager positions are also being expanded in larger clubs to spread the work effort and improve the quality of life for young managers in the profession as well as to prepare them for promotions

27. Professional Executive Management Club Positions
Working conditions in the industry are comparable to those in the hospitality industry and other sport management areas
A number of clubs will have seasonal operational peak period and slow periods
Staffing clubs for managers is a challenge when the open hours for clubs may require up to two or three 40-hour shifts per week
Certification is rewarded

28. Current and Future Issues for Golf and Club Management
Six major trends affecting game
Plateauing of participation
Connected-ness
New power of women
Winner/Loser Society
Child preparation
Health imperative

29. Current and Future Issues for Golf and Club Management (cont.)
Need for better benchmarking
Socio-economic issues
Demography
Diversity
Youth Introduction
Finances
Develop new program to introduce game, develop more consistency, etc.