For a Change:  The New Math of Golf Club Membership

     Most of us will never again feel quite as secure about our financial prospects as we did prior to September 2008, when Lehman Brothers filed for bankruptcy.  And this queasiness, of course, infects our spending, especially on the things that are more luxury than necessity -– like golf club membership, for example.

    Twice in my life I felt the irresistible lure to join a golf club.  The first was when I moved to Connecticut in the early 1980s from the New York metro area, where private golf club memberships averaged $15,000 or more.  A terrific private club outside Hartford, Hop Meadow Country Club, was offering a special $1,200 initiation fee, and I leaped at it.  I remained a contented member until I resigned in 2009 because we spent summers away from Connecticut.  I could no longer justify the high per-round cost.

Initiation costs less relevant than dues

    Ten years ago, in preparation for eventual retirement, my wife and I purchased a condo on a “semi-private” golf course in Pawleys Island.  As an inducement to purchase, the developer offered to pay for half the $15,000 initiation fee and included the rest in the cost of the condo.  Again, the deal was impossible to resist.
    Today, though, I would take out a calculator before making either decision.  Hop Meadow now charges an initiation fee of $5,000, still quite reasonable 25 years later.  But monthly dues (assessment included), which were under $300 when I first joined, are now over $600.  Compared with the $75 green fees at excellent daily fee courses, cart included, I would have to play about 100 rounds at Hop Meadow during the seven-month Connecticut golf season to break even.  And within two miles of our Connecticut house, another private club is waiving initiation fees for this year and charging just $3,500 for the golf season.

    At Pawleys Plantation, my club in South Carolina, there really never was a good reason to join a club in the golf loaded Myrtle Beach area -- other than for a sense of belonging.  The Myrtle Beach Passport, a local discount card available to primary and second-home owners, provides incredibly reasonable green fees at more than 80 Grand Strand golf courses, making the break-even point for my $300 monthly dues at Pawleys Plantation about five or six green fees a month at excellent local daily fee courses.  And in a semi-private club –- emphasis on “semi” -- you can’t just walk up and pound one off the first tee box if paying customers are lined up to play.  At least most private clubs can lay claim to that kind of freedom.  For many, that is reason enough to pay the extra tariff for a fully private club. 

Bulking up the portfolio for members

    In the battle to remain competitive, private and semi-private club operators, whether inside or outside the gates of a golf community, are scrambling to find new and different ways of providing value for their existing and prospective members.  The McConnell Golf Group, for example, is signaling the future of private club membership with its aggressive golf course acquisition model.  Led by John McConnell, a former software entrepreneur who sold his business for tens of millions of dollars, the firm has established a portfolio of a half dozen private courses stretching from the Raleigh, NC, area all the way to Litchfield, south of Myrtle Beach.  McConnell members who pay $26,000 to join have full privileges at all the courses.  Compare that to the half dozen courses at The Cliffs Communities, where members also have reciprocal privileges but pay $150,000 in initiation fees. (The Cliffs courses are about 90 minutes from one end to the other; the McConnell courses are four hours from Treyburn in Durham, NC, to The Reserve in SC.)  

    McConnell may be following somewhat a model perfected by the Canongate Group, which provides its members with 26 courses clustered around Atlanta.  Members play free at the Canongate course they join and a few other nearby courses; and they pay modest green fees to play at the remaining Canongate courses (typically no more than $39 per round).  Cost of membership depends on which home course you join, but a $750 initiation fee is typical for full-family golf, with dues of about $2,500 per year.  Golf is year round in Atlanta, making it easy to play at least a round a week, which comes out to about $50 per person ($25 per person if a couple plays a round a week, even less if the family's junior golfer is also using the facilities).

Members-only time at courses open to outsiders

    Other courses that open for outside (non-member) play are nevertheless trying to enhance the existing-member experience as well as entice new members.  For example, each morning at Bay Creek Resort and Club in Cape Charles, VA, which I visited a few weeks ago, the club managers (Billy Casper Golf Management) close one of the two 18-hole courses to outside play, reserving it for members only.  In some communities with multiple semi-private courses, the course operator will restrict to members one course for an entire day (e.g. Kingsmill in Williamsburg, VA).   Such actions provide a nice balance between the need for exclusivity for the members and the members’ interest in the club generating the kind of extra income that helps maintain the grounds and facilities.

    That need for precious extra income is driving private clubs to open their tee sheets to limited outside play.  Boxgroove.com, which has signed agreements with nearly 100 private clubs nationwide, has registered almost 1,000 members who select from among formerly exclusive golf courses.  The clubs can limit frequency of play to times when members don't regularly play, as well as impose other restrictions on Boxgroove access; but as they get used to the extra streams of income, many of the private clubs will loosen up even more.  Their managers and members understand the extra dollars will help keep their private club from starting to look like the municipal course down the street.

    I wrote above that I resigned my membership at Hop Meadow in Simsbury, CT in 2009.  The year I left Hop Meadow, it cost me more than $250 per round on average.   A few months ago, Hop Meadow signed on as Boxgroove’s first course in Connecticut.  As a Boxgroove member, I can now play my old private course for $89, cart included.