The Offshore Owner Blues
The Challenge: Built by a developer to anchor an 800 home, gated community in a southwestern resort area, this club was sold to an off-shore management group that struggled to connect with the local community. Unable to sustain the membership level necessary to maintain the club, the new owners began to cut expenses severely and the facility began to deteriorate. Before long, the club was unable to compete successfully, and this caused the owners to discount their pricing, putting even more pressure on the club's finances. Eventually the second owners were forced to sell.
The third owners faced a rundown facility, an unworkable pricing structure, and a frustrated, belligerent membership. The members were very unhappy with the conditions at the club but refused to support any price increases.
The Solution: Working closely with a newly formed Member Advisory Board and the club's management team, we designed a "semi-private" model that guaranteed preferential treatment for the members, while allowing the club to generate enough supplemental golf revenue to allow us bring the club back to the high standards the members expected. As service levels improved, the club garnered 325 members who received "private club" levels of service at below market pricing. The club's owners achieved financial viability and were able to restore the golf course and remodel the clubhouse.
Too Much of a Good Thing
The Challenge: This exclusive, very high-end private social club was a victim of its own success at opening. Interest in the club was so great that the club was overrun during peak periods. Members were often unable to get reservations, service was substandard, and the menu offerings didn't meet their expectations. In an attempt to rectify the situation, existing management added more staff and halted sales of new memberships. These actions combined to threaten the club's economic viability. In the face of all of this, the club manager became overwhelmed and confused by the contradictory advice he was receiving from his committees and board. The tension level among the department heads was high, and their communication was marred by friction.
The Solution: We conducted a thorough review of the member complaints, the club's original positioning, its competition, financial statements, staffing plans and daily operations. We held productive meetings with the staff, the board, the committee heads, and the landlord.
Armed with this information, we devised a comprehensive turnaround strategy. To improve both service levels and staff efficiency, our team prepared a "zero based" staffing model, in which new job descriptions and daily work schedules were drafted to ensure accountability. We formalized service training and quickly reduced staff turnover. We created member recognition systems and a database of member preferences. We conducted Informal focus group research with the members and made visits to the member's favorite dining venues. We updated the menu to improve offerings and revamped the kitchen line to improve quality and consistency and to speed up food preparation during peak periods. The house maintenance schedules were revamped to improve coverage and service during peak periods, and special "housemen" were hired and trained to reset dining rooms. This improved efficiency, reduced damage, and lowered worker compensation claims.
While achieving these dramatic improvements in service levels, we worked with the finance committee to develop new fee structures and membership levels that insured the club's financial viability and attractiveness in the market place.
Aging Not So Gracefully
The Challenge: A large, multi course club in Texas experienced significant attrition over the years, and was struggling with an outdated and deteriorating infrastructure. Membership sales and club usage were declining and a new, modern competitor was opening in the market. The club was caught in a "Catch 22" in that it could not attract the new members it needed to fund the improvements it needed to attract new members. Over the years, a number of different approaches had been tried, some causing more problems than they cured: consolidating membership categories, cutbacks in services and operating hours, and radical reductions in membership fees. The bottom line: the club looked and felt tired, the members were no longer proud of the club, usage was declining, and the club was no longer able to meet the needs of the local community. If the financial trends continued to decline, the club's very existence would be in jeopardy.
When we completed our analysis of the club's membership history, one trend jumped off the page. Most of the attrition was occurring among those who had been members for less than two years. The club wasn't providing sufficient value to keep the members it was able to attract through severely reduced initiation fees.
The Solution: Our comprehensive market study disclosed that of the more than 80,000 people in the immediate market, almost 25% were children under 15. The average age of the club members was much higher than the parent demographic, and this trend had been missed. Armed with this data and substantiation from focus research gathered from club members, club staff, and community members, we were able work with the club's management team to devise a strategy for repositioning the club. It was important that in achieving this, we did not alienate the existing members.
To meet the needs of the young family market, the first phase included the development of a new fitness center and tennis complex and the replacement of the antiquated pool area with a modern water park. By "selling the future", the club staff was able generate enough membership commitments to "trigger construction" of this exciting new amenity. Because it was a multi-course club, the staff was able to devise a "family friendly" golf program which wouldn't interfere with serious golfers. Our team developed new social programming especially for families, including activities and camps for kids and a new kids' clubhouse. Plans were developed for separate dining areas designed specifically for families or for adults.
The reaction was terrific and membership sales improved dramatically. The revenue generated allowed for the phased remodeling of the main clubhouse and much appreciated upgrades to the practice area, player development center, and golf courses. Each phase was triggered by achieving preapproved membership levels. The club buzzed with activity and gained a new lease on life!
Good Intentions Gone Wrong
The Challenge: Located in the scenic gold country of Northern California, this club had all the ingredients for a successful golf club: a pleasant, affluent membership, a spectacular signature golf course, and a charming, well-appointed clubhouse. The designer had done a masterful job of maximizing the natural beauty of the site, and the course was one of the top rated in the state. Every effort had been made be ensure that the club would be as environmentally unobtrusive as possible.
When we first visited the club, however, all was not well in paradise. The course was in poor condition, with large bald spots in the fairways, fungus problems on the greens, and major algae blooms in the lakes. The landscaping around the clubhouse was overgrown and unruly. The members and the owners had grown very frustrated and wanted the situation rectified quickly.
We learned that the agronomist, who was hardworking and well intended, was trying to maintain the course organically. Unfortunately, this was actually accelerating the deterioration of the course.
It was clear that a different approach was needed.
The Solution: The first step was to find a highly regarded course superintendent with a background based more in traditional agronomy. Once that had been accomplished, we worked with the USGA, the course architect, the Army Corps of Engineers, local and county officials, and the Audubon Society to devise a strategy to bring the course to its intended level of excellence without adversely affecting the environment. Within a few short months, the course was in excellent condition and the club obtained Audubon certification.
To ensure that the improvements endured, we developed a long term golf course maintenance plan, with strict guidelines of approved practices and firm schedules for application. To enlist member support, the Superintendent regularly issues updates on course conditions and scheduled maintenance. Tranquility has returned to paradise!
Tennis, Anyone?
The Challenge: Almost thirty years old, this suburban Los Angeles club had long been recognized for having one of the best tennis operations in the market. Unfortunately, membership levels were in decline, and many members protested that the monthly dues were too costly. Member morale was sinking along with the club's financial performance.
In consultation with the club's management team, the tennis committee, and the club's board of directors, we devised a strategy whereby the club agreed to reduce the monthly dues if the members would recommend enough nominees to allow the club to reach a full complement of tennis members. We created and instituted a member-centric recruiting campaign. The result - a re-invigorated tennis program, appropriate pricing, and happy, committed members.
Controlling Their Own Destiny
The Challenge: This spectacular private club hosted an annual stop on the PGA tour and had a national reputation. It had a very affluent membership and was surrounded by million dollar homes. The members were very loyal to the club and were fiercely protective of its image. The club's operating standards were very high and as a result it had a large operating expense budget. The club was substantially below its targeted membership level and struggled to generate enough revenue to cover these expenses.
At some point in the past, it had been decided to allow limited outside play. While this decision solved the revenue problem, it caused a significant level of consternation within the membership.
Some members went so far as checking bag tags and confronting un-accompanied guests. It became a frequently and hotly debated issue at board meetings.
The Solution: After analyzing the club's financials, the patterns of outside play and the financial impact of the guest fees, we met with the club staff and the board. Fortunately, the club's management team was strong and had kept excellent records. While they were reluctant to give up the golf revenue, they respected the member's wishes. The membership was very clear about what they wished for: a truly private club. Working together, we were able to craft a workable solution. If the club would be able to acquire a full complement of members, the outside play would be unnecessary. An approach was initiated that allowed for the elimination of a specific number of outside rounds as each new member was added. When the target was reached, all outside play would be eliminated. To gain the members trust, the number of outside rounds and the number of members added were reviewed at each board meeting.
We developed a membership program to help the members to sponsor new members. The members embraced the program enthusiastically and the club achieved true private club status.
Truly Going Private
The challenge: Following a contracted study and in an effort to increase the tourism infrastructure of one of their renowned beach destinations, a Mexican State government sought the development of an additional 36 holes of championship golf. Site selection and architects both became critical ingredients for the government to accomplish its objective of "attraction" level golf and for the developer to create a viable stand-alone business. A perfect site was identified: 186 hectares overlooking the destination with views of the ocean. However, as with many suburban areas in Mexico, the identified site was "ejido" land.
Ejido land is not private property and no title exists. In an over-simplified explanation, an ejido is a collective group of people that live and work on a determined piece of property as a community whereas the community controls the destiny of the land. Until ejido land is converted to private property, non-ejidos cannot acquire "ownership."
The Solution: Since the constitutional reforms of 1992, ejido land now can be converted into private property and sold to third parties, including foreigners. A formal offer was made to the ejido association, followed by assemblies, meetings, one-on-one discussions, and quite a few BBQs. The Association accepted our offer. The ejido further agreed to enter and complete the following two procedures: PROCEDE or "Program of Certification of Ejido Rights" and "Dominio Pleno."
Six months and three days later we became the first US Corporation to "privatize" then acquire ejido property in this State. Mexico developers from Los Cabos through Puerto Vallarta down to Acapulco sought our expertise after this unique accomplishment.
17-Year Itch
The Challenge: A prominent group of Mexican developers desired to build a golf course and real estate development on a tourism resort destination island located off the mainland of Mexico. The problem was that this area was one of the most environmentally sensitive areas in the world. NO ENVIRONMENTAL PERMITS HAD BEEN ISSUED IN 17-YEARS.
The Solution: A joint effort was organized wherein the architect and construction company worked hand-in-hand with SEMARNAP and the Insitute Nacional de Ecologica (INE) to mitigate the environmental impact of the development (impacto ambiental). The end result was the 1st Environmental Permit issued in 17-years. The permit included 56 conditions, jointly drafted, to assure environmental safeguards. The golf course opened and was immediately inducted into the Audubon Society: The Audubon Society's charter is to conserve and restore natural ecosystems, focusing on birds and other wildlife for the benefit of humanity.
Mission Possible
The Challenge: A major real estate development company was developing a 360-home development in the Dallas/ Ft. Worth metro area. The development included an upper-end golf course as its centerpiece. A traditional management company had been retained to manage the business. After 4-years and a 70% build out, the development company was still subsidizing the golf course approximately $750,000 per year. A change in the company's status and a downturn in the economy brought focus on the golf course as a stand-alone business. The executives of Triumph Golf were contracted to perform an efficiency analysis report.
The Solution: Based on the report, we were contracted to "Consult to Self-Manage" and the existing management company was released. Certain department heads had potential, including the Manager, while one department head had to be replaced: Right People/Right Place. Following the development of a Market Position Statement, we analyzed every cost, reviewed payroll and aligned incentives with desired outcomes. We modified hours of operations and F&B offerings, and amended Green Fee and F&B pricing. We redefined membership categories And implemented new membership programming. Every facet of the club was treated as unique.
The end result was a $500,000 cash improvement during the first 9 months of our involvement, with projections showing positive net cash by year three. Member satisfaction was also on the upswing and member involvement was at a new high.