Some improvement in business conditions for golf clubs: HLB Mann Judd Sydney

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Simon James

Business conditions for golf clubs have improved in some areas compared to the same time last year, but there are still a number of areas of concern, the HLB Mann Judd Sydney survey of local golf clubs shows.

  • Total revenue increased during the year by four percent
  • The average spend per member increased by 12 percent
  • 23 percent of clubs showed an increase in the total number of members.

However, Simon James, compiler of the survey, said that there are still some concerning signs for golf clubs.

Mr James is a corporate advisory partner of accountants and advisers HLB Mann Judd Sydney.

“There has been a significant decline in non-playing members which is suggests that the strategy of many clubs to attract non-playing members to spend money with them is not working,” Mr James said.

“This can largely be attributed to the fact that the requirements for non-playing members to use the bar and catering facilities are being relaxed, which may be something golf clubs will need to review.

“In addition, while almost a quarter of clubs saw an increase in their member numbers, across the board there has been a drop, by three percent, in total membership over the last 12 months, which puts financial pressure on clubs, their committees and management.

“However, the growth in younger members – that is, those under that age of 25, has continued to grow at a rate of seven percent.

“The challenge for clubs is to retain these members during their 30s, when it seems that many club members allow their memberships to lapse.

“Across the board, the average age of members has increased over the last 12 months, from 54 years old to 56 years old.  If this trend continues, we anticipate clubs will continue to see declines in their membership bases and revenue streams,” Mr James said.

He added that there are four main options available to clubs to improve their revenue stream:

  • lifting fees
  • adding more members
  • encouraging members to spend more
  • encouraging non-members spend (corporate golf, functions etc).

“The most profitable clubs are not relying on just one or two of these options but are implementing strategies to improve all four areas,” Mr James said.

“It’s interesting to note that those clubs with a deficit for the year tended to have a higher-than-average number of non-playing members, suggesting that this is an area that needs attention in order to return to profitability.

“Many clubs will also need to find ways to manage costs such as staffing and maintenance improvements.

“Ground maintenance continues to be one of the biggest cost for golf clubs, and 60 percent of clubs reported that they have major maintenance projects scheduled for the year ahead.

“The rising costs of such overheads will continue to be a concern to many in the industry,” said Mr James.

Copies of the HLB Sydney Golf Survey 2013 can be downloaded here.

HLB Mann Judd Sydney is a firm of accountants and business and financial advisers, and part of the HLB Mann Judd Australasian Association.

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For more information please contact:

Simon James – Phone: 02 9020 4212

18 July 2013