More than a third of golf clubs have cash flow issues despite current boom

Alistair Dunsmuir
By Alistair Dunsmuir August 12, 2020 07:19

A new survey of UK private members’ golf clubs finds 37 percent have cash flow issues despite the recent boom in demand to play the game, and some may close down in 2021 as a result.

Part of the problem for them is that, according to the GGA Partners research, 43 percent of members of UK golf clubs expect their disposable income to decline over the next 12 months, while 58 percent believe their overall consumer spending will also decline.

The survey finds that eight percent of clubs in the UK and Ireland classify their current cash position as ‘critical’ and a further 29 percent as ‘concerning’.

GGA Partners’ Rob Hill said the full economic impact of Covid-19 will not hit the UK golf industry until the winter, as the government’s furlough scheme has helped spread the damage of a major recession out as much as possible.

Rob Hill

Hill also referred to a study carried out by the English Golf Union as it then was in 2008, which identified in the first year of that recession, almost one half of all golf clubs experienced a decline in membership numbers with “the most significant decrease in the 22 to 44 age group”.

The survey has some positive news for golf clubs as it also finds that 11 percent of golf club members have not returned to their club yet. Most of them said they will when the club has been operational ‘without issues’ for a trial period, although some said they won’t go back until a vaccine is available. The majority of people that fell into this category were aged 70 and over.

GGA Partners’ Rob Hill said: “By all means enjoy re-opening, celebrate the new demand and interest in the game and membership, but remember what you’re experiencing now isn’t the new normal. That’s coming this winter and it is the responsibility of club leaders to prepare their organisations for the next cycle now.

“This means addressing any governance weaknesses that may hinder nimble and difficult decision-making. Following proven guiding principles to protect the club’s overall financial health. Protecting the condition of club assets and exploring opportunities for investing in enhancements which will broaden relevance and appeal. Investing in people and their education to deliver efficient and outstanding member and visitor experiences. Investing in a membership retention plan with an emphasis on value, NPS, socialisation and safety, and investing in an appropriate brand management strategy so that values are communicated effectively to both internal and external audiences.”

 

Alistair Dunsmuir
By Alistair Dunsmuir August 12, 2020 07:19
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8 Comments

  1. Jon D August 17, 11:28

    Personally I think club managers and club pros need to look at strategies now. Planning needs to be in place with clear objectives to see them out through the winter.

    Reply to this comment
  2. Sam B August 13, 16:41

    Is there data to support this trend continues outside of the UK?

    Reply to this comment
  3. Ted August 13, 11:31

    Increased rounds (and memberships) do not necessarily translate positively to the bottom line. Business models need to be adjusted to create a sustainable business – regardless of the business. The positives from all of this is that golf is proving to be a great outlet for people. Now, how to make this cash flow positive.

    Reply to this comment
  4. Peter August 12, 16:11

    Typical ! Clubs that were tight on cash before the pandemic are now into a busy season !! Vendor payables and things like property taxes don’t simply go away ! Bank lines get tougher ! The good news ? Hopefully, some owners still have capital to contribute, at least finding a rosier picture than past years ! Cash flow must be addressed, not avoided ! You have to stop the bleeding !

    Reply to this comment
  5. Eddie August 12, 12:28

    the whole business model around clubs and their structure needs to change, new members are papering over the cracks!

    Reply to this comment
  6. Adrian C August 12, 12:08

    A spike in growth will not resolve underlying issues that clubs had before C19

    Reply to this comment
  7. Stuart C August 12, 12:00

    Btexits round the corner tooo

    A boom year I can see but a couple of months naw

    Reply to this comment
  8. Keith H August 12, 10:16

    Unfortunately, I agree that a number of golf clubs could be in for a really difficult winter period and over their next renewals. The positive surge in memberships and demand for tee times has been great and hopefully given clubs an opportunity to develop plans for the tough times, but the economic impact of the recession, job losses etc is going to be difficult on all walks of life and it tends to hit leisure and disposable income. Clubs are going to have to work doubly hard to retain the increased members and continue to modernise their approach to managing their business, and services they provide.

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