Should golf clubs brace themselves for a membership decline?

In October 2020 I wrote a LinkedIn article about 'How the golf industry is changing due to COVID-19'. Many things I wrote in that article are still relevant, although the source of the problem has changed. Now it's not the pandemic itself anymore, but the issues caused by this pandemic. Airports do not have enough skilled staff and the war in Ukraine has increased the cost of living significantly. All this has negatively impacted (golf) tourism, so in essence golf resorts and golf clubs that depended heavily on tourism. Golf destinations relying on golfers going on golf breaks had a difficult time.

COVID-19 was a blessing in disguise for golf participation

However, Northern European golf clubs relying more on club memberships thrived due to the COVID-19 pandemic. Many golfers who had given up their memberships in the years before 2020 were 'forced' to return because they wouldn't be permitted to play as a 'nomad golfer' (a golfer without a home club). COVID-19 also had a positive effect on overall golf participation: people played more locally because they couldn't participate in other sports, go to a restaurant or theatre or attend events in general. COVID-19 also led to a huge influx of new golfers - mainly younger golfers - and people picking up golf again. All these factors mainly benefited golf clubs in the so-called demand countries, so countries where a lot of golfers live and play. Think of countries like Germany, the UK, the Nordics and the Benelux.

Golf memberships might be on the decline, again

But, the war in Ukraine has caused prices to go up dramatically. Gas and electricity prices have soared and with fall and winter just around the corner, this will definitely cause problems, on a golf club level but also for golfers.

On a club level, golf clubs will be faced with a substantial increase in prices for gas and electricity. Due to inflation, other costs will go up as well, especially the costs for their employees. This all can only lead to one thing, and that is a decision to increase the price of a membership for 2023 and probably also 2024.

Quite a few golfers - as indicated before - had to become a member of a golf club in 2020 and 2021 if they wanted to keep playing. If clubs did not onboard these people and make them part of their club, they will hand in their membership at the first price raise they face. They too have been hit hard by the increased cost of living, so they will have to need to make choices.

Top clubs will not have an immediate issue - as many still have a healthy waiting list - but all other clubs will have a problem if golfers decide not to renew their memberships. Quite a number of clubs still have difficulties to survive - although they will not admit this - so if 50 to 100 golfers will churn they will have to cut costs immediately. The first thing they will save on is maintenance (of the course, clubhouse etc) and planned improvements. This will lead to more people leaving, fewer green fee players and a downward spiral that is hard to stop.

Golf clubs relying on memberships need to take action now

When talking to golf clubs in The Netherlands, Germany, France and the UK to help them to become bookable on our platform, we often hear them say that they do not have a real issue right now. And we get their point. But, running a healthy company is mainly about predicting what the (near) future will look like. And the current outlook is dim.

That's why we think clubs should anticipate now. Every member club has timeslots that are less popular, like Saturday morning or Sunday evening or timeslots during dinner time. By connecting to Leading Courses these downtimes can be monetised. Our service is on a no-cure-no-pay basis, so a club only pays a small fee if a golfer actually plays. Ensuring a club has a healthy occupancy rate is critical in a capital-intensive industry like golf.

By connecting to Leading Courses, a golf club will be able to:

• make their normal rate their online rate; golfers will pay upfront and will show up in contrast to people making a 'reservation' by the phone with no strings attached,
• introduce another rate for people who want to make a reservation via the telephone or who walk in, this will become the 'rack rate' (or telephone rate) and will be higher than the online rate.
• invest the money earnt on empty timeslots back into the club (course improvements, maintenance, or by keeping the membership costs at the same level),
• experiment with pricing for green fee players, even by upselling lunch, dinner or drinks, thus increasing the total amount spent per golfer at the golf club,
• attract more golfers without the need of spending any marketing budget yourself; we take care of that,
• convert visiting golfers living nearby into potential members, at least if you make them feel at home at your club,
• make a club less vulnerable to members leaving as it can scale up the number of timeslots made available for green fee players in seconds (this can be easily arranged via your tee sheet software).

Working with us will lead to an upward spiral in pricing, in quality and will ensure that your members will remain members. I know that many club managers disagree with me on this, but in my opinion, allowing green fee players will in the end help you to retain your own members if you do it right. Your club will become healthier, you are able to spend more money on the course and on club events and these green fee players might even help you to understand what could be improved by reading their reviews.

Why not give it a shot? If you keep doing what you've always done, you get what you've always got. And by reading this article, that's not really an option. The world around us is changing rapidly, so it's time to act now.

If you want to give it a try, just reach out to me personally or our sales team via Marc Sleenhoff (Spain & Benelux), Darren Redwood (UK & Ireland) or Stijn Greveling (Portugal, France, Italy, Germany, Morocco and the rest)!