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Club Membership - New Math?

TripleF

TripleF

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Littleton, NC
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I just joined an area country club that had a deal that just seems unbelievable!

First, the course is a very good local course that has a good history. In the 1980s it was the location for the ACC golf championship for a number of years. For several years the course just about went under, changed ownership numerous times, etc. But over the last two yours the new owners have really brought the course back to very, very nice condition.

Here was the deal: pay $59 annually for 3 years up-front. Cart rentals are $12 per 18 holes. If I walk . . . no charge. I understand they have signed up about 600 new members.

I signed up . . . but now I'm wondering how they can make any money doing this.
  • These dues yield $35,400 annually.
  • I'm not sure what they would make from a cart rental after lease costs and gas but guessing maybe 1/2 of the $12 fee and probably 85% will rent a cart and optimistically will play weekly. That would provide $159,120 revenue.


No way they can pay maintenance staff, pro, chemicals, taxes, etc. and still make a profit!

Is this just some sort of "last gasp" effort? Or am I missing something?
 
TripleF said:
I just joined an area country club that had a deal that just seems unbelievable!

First, the course is a very good local course that has a good history. In the 1980s it was the location for the ACC golf championship for a number of years. For several years the course just about went under, changed ownership numerous times, etc. But over the last two yours the new owners have really brought the course back to very, very nice condition.

Here was the deal: pay $59 annually for 3 years up-front. Cart rentals are $12 per 18 holes. If I walk . . . no charge. I understand they have signed up about 600 new members.

I signed up . . . but now I'm wondering how they can make any money doing this.
  • These dues yield $35,400 annually.
  • I'm not sure what they would make from a cart rental after lease costs and gas but guessing maybe 1/2 of the $12 fee and probably 85% will rent a cart and optimistically will play weekly. That would provide $159,120 revenue.


No way they can pay maintenance staff, pro, chemicals, taxes, etc. and still make a profit!

Is this just some sort of "last gasp" effort? Or am I missing something?
Click to expand...

$59 annually for 3 years? So you paid $157 up front? Are there any other costs associated? Many private clubs around here are offering reduced or no initiation fees and reduced dues for prospective members under the age of 50, but they require a certain monthly or quarterly amount be spent in the clubhouse on food/drink.
 
Holy cow that's one heck of a deal, I wonder what they're doing with current members?
 
Something seems fishy here to me. If it sounds too good to be true, it probably is.


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Hmm... not trying to predict anything but the only parallel with similar deals that I'd experienced was a few gyms I belonged to throughout the years. They took the money and ran (I was only hit the 1st time, didn't go for it at the other two places).

Certainly hope it's not the case but it does smell a little funny.

The scam for the gyms was to keep the offer low enough so as to attract lots of individuals while at the same time the relatively low personal loss would dissuade people from pursuing more costly litigation.
 
sounds too good to be true. there's no way they be open for business for long with those rates. I'm thinking those were initiation fees and the monthly dues are about to show up.
 
There has to be some crazy F&B min somewhere that is not obvious.


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azrsx said:
sounds too good to be true. there's no way they be open for business for long with those rates. I'm thinking those were initiation fees and the monthly dues are about to show up.
Click to expand...
Or there about to private/public. Members get preferred tee time deal
 
TripleF said:
I just joined an area country club that had a deal that just seems unbelievable!

First, the course is a very good local course that has a good history. In the 1980s it was the location for the ACC golf championship for a number of years. For several years the course just about went under, changed ownership numerous times, etc. But over the last two yours the new owners have really brought the course back to very, very nice condition.

Here was the deal: pay $59 annually for 3 years up-front. Cart rentals are $12 per 18 holes. If I walk . . . no charge. I understand they have signed up about 600 new members.

I signed up . . . but now I'm wondering how they can make any money doing this.
  • These dues yield $35,400 annually.
  • I'm not sure what they would make from a cart rental after lease costs and gas but guessing maybe 1/2 of the $12 fee and probably 85% will rent a cart and optimistically will play weekly. That would provide $159,120 revenue.


No way they can pay maintenance staff, pro, chemicals, taxes, etc. and still make a profit!

Is this just some sort of "last gasp" effort? Or am I missing something?
Click to expand...

One of the courses near here does something similar. $59 for 3 years but then it's $25 a round, walking or riding. It's probably something similar where there is a walking fee as well.
 
No F&B . . . they do sell beer, soft drinks and snacks. No cost to walk. No monthly or quarterly dues. Sounds like I (and about 599 others) may be loosing some money . . . but not very much. Too good to be true but I'm taking the risk!! Hahaha!
 
Might be trying to get people in the door with some quick cash. Certainly that deal won't last long. Maybe they're just really focused on year 4 and beyond, and have the cash to sustain 3 bad years.
 
A couple of public courses in my area did the same thing as a way to raise quick cash. The special ran for a limited time and then they went back to regular membership rates.
 
600 members? No thanks. Hope you get to play enough while it's in good shape to make it worth the small investment. But that can't be sustainable


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not sure how that can work, and that's a lot of members for a single course... but hey, the risk isnt that high, I'd take it if the course is decent
 
I don't understand it but enjoy it while it lasts!
 
A local course did this around me and some guy from the south came up with it. The idea is to get at least 600 members for that price and if after 3 years you get 20% back at full price you're back in the black. There's a formula to it and I'm fairly certain you want at least 600 members and the goal is to get 20% of those members to stay at full membership cost (whatever it may be) after the 3 years.

I know the local course around me got about 2100 members signed up with that deal and they charge $13 per cart and the course was basically a dump before the membership drive and now I hear it's actually pretty nice and damn near impossible to play on the weekends because of how many people are going.
 
We have something similar called Great Life. It's 59 a month though not annually. It is also for I believe 16 courses now within an hours drive(10 are playable). Kansas City had the same thing and the membership works there as well
 
It's a quick way to build membership so that when they put out future marketing materials, they can tout a 600 member club. The deal was probably for the first 600 (or whatever number). Most of those 600 will probably still pay for a cart. And, hopefully, those 600 will invite others to play who will become repeat customers. Maybe they needed a quick cash infusion for something. It does sound a little fishy. Just get 6-10 rounds in as soon as you can so that can at least feel like you got your money's worth, in case the up and lock the gate one day w/o telling anyone.
 
600 new members? The finances must be hurting because how would existing members not go nuts. Availability is going to be a real problem. Then again, forthat money if you get a few rounds played you will still be ahead.
 
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