Declining Club Patronage; How Can Clubs Keep Adding Profit Despite Reducing Club Membership?

Declining Club Patronage; How Can Clubs Keep Adding Profit Despite Reducing Club Membership?

The club patronage has been on a decline in global scale. This has affected the revenue of clubs in several ways. Some major ones are:

  • Reduced club membership fees.
  • Reduced sale of F&B.
  • Increased cost of maintenance per member.
  • Increased cost of services per member.

The Australian Golf Club Survey - 2014 found that food and beverage income accounts for between 35% and 50% of club income across Victoria (excluding gaming and joining fee revenue). The same percentages apply to clubs in North America, evidencing the fact that revenues generated from spending in ancillary areas of golf clubs such as food and beverage are vitally important for golf clubs. Given the added time pressures that seemingly exist in today's society, the heightened awareness of random breath testing, the pressure on membership generally and the fact that people are no longer looking to their golf club to be a key part of their social focus, clubs need to be cautious in attempts they make to change member spending habits. With this caution in mind, some ideas are presented which may be appropriate in addressing this growing concern.

  • Consider a levy. Although not likely to be a popular decision, levies do secure the sale of a certain amount of product.
  • Trial the sale of simple beverages on course. Juniors could be recruited to do this via a golf cart or use a mobile device for collecting orders.
  • Consider including a drink voucher with the daily competition fee.
  • Take advantage of the club's liquor licence and offer good priced take away beverages.

Labour cost should be reduced, but how?

Referring to the increasing cost of service per person, a major part of that is labour. The cost of labour accounts for 35% to 40% of all gold club expenses. Combining this with the fact that the main part of this labour is hired to provide food and drinks to patrons, clubs needs to invest in automated order-taking systems that reduces the need for labour to offer same service. In addition, the portable or mobile automated systems will enable the clubs to consistently provide their services in all ancillary areas to the patrons, which will improve the sales and patrons’ satisfaction.

Such systems will not only reduce the labour cost, they increase the revenue from areas within clubs, which are usually not served well, and unprepared clubs lose revenue from such areas.

Regarding labour costs, there are a number of other potential solutions that should be considered at club level as efficient operations are pursued. They are:

  • Sub-contracting maintenance;
  • Administration cost and equipment sharing;
  • Group buying; and
  • Leasing

In an essence, clubs should consider reducing costs by decreasing direct labour and increase revenue by increasing the availability of their food and beverage orders in all areas within the club.

At a later stage, a part of the profit from the increased revenue should be planned well so that clubs will be able to employ proper marketing activities to attract more membership and club goers.

2 comments

Ali Fard

@Sara Here the idea is that clubs have to utilize those avenues that are less tapped into, to generate more revenue while taking measures to reduce their costs. Then on a later stage, they can partially invest this added revenue in other types of services like you mentioned to even increase more revenue.

Ali Fard
Sara Baleley

Good read. How do you envision clubs expansion in other types of services such as sports tournaments will affect the industry and the patronage?

Sara Baleley

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