PRIVATE MEMBERS CLUBS - Turning away business!!

[Shiney1983]

Hi Ger147, it baffles me that you think a golf club would lose out in the long run if they worked with and had good relationships with golf agencies. Only ever paying money out on money coming in, I am not sure I have ever heard of a business doing poorly on that business model. Please don't take my original post as aimed at every club in the UK. I am very aware that there are clubs out there who can survive on their membership fees alone, however this is a very small percentage. However, I am sure a lot of golf clubs during the recession would disagree with your opening statement and they found out very quickly that they became a business and had to find ways to survive, so it could exist as a members club.

 

[CMAC]

what was the size of party that was paying £4000?
what day of the week?
what level of course? ie prestige resort, Open venue, top 50 course, small member course, hotel chain etc etc
Do your clients pay anything to you for your companies organisation skills or do you make all your money from commissions?

just trying to 'understand' more before giving a more detailed opinion...

 

[DCB]

The difference is golfers can simply call most club themselves and make a booking, cutting you out and saving money.

Exactly, even on the business front, a couple of calls or an email enquiry to a venue will usually reap rewards. Different if you're looking for a company to front the day for you, do all the organisation and logistics. Surely their charge to the client covers all their overheads etc ?

 

[Shiney1983]

Hi DCB, Did you claim your nectar points like you do every week with your shop. Or have you saved up enough points to pay for a full weeks shop now? See where I am going with this.... Sainsburys, good business model, smart people give something back to keep shoppers coming in.....

 

[Shiney1983]

Hi CMAC, 40 golfers and a nice golf club based in London, package price £135.00pp. Not an open venue or top 50 course. Private Members course. As a business we offer a venue finding service which is totally free of charge and if they want us to run an event on the day for them as well, then yes we charge an organisation fee. Midweek, Tuesday

 

[ger147]

Hi Ger147, it baffles me that you think a golf club would lose out in the long run if they worked with and had good relationships with golf agencies. Only ever paying money out on money coming in, I am not sure I have ever heard of a business doing poorly on that business model. Please don't take my original post as aimed at every club in the UK. I am very aware that there are clubs out there who can survive on their membership fees alone, however this is a very small percentage. However, I am sure a lot of golf clubs during the recession would disagree with your opening statement and they found out very quickly that they became a business and had to find ways to survive, so it could exist as a members club.

According to your original post it was 100%.

So it's not 100% now???

And I'm not sure why it's so baffling:

1) A business exists solely to make a profit for its owners/shareholders. That is clearly NOT the objective of the vast majority of private members golf clubs. You seem to be confused on this critical point.
2) If members can't get on to the course due to visitors they leave and the club suffers.
3) If there are so many visitors that the condition of the course suffers, the members leave and the club suffers.
4) As was pointed out by another poster, if revenue from visitors reaches a certain level, the club may actually be WORSE off due to the potential VAT liability on ALL of their income.

 

[Shiney1983]

Hi DCB, companies like ours exist, because you have people tasked with organising golf days for their companies who know nothing about golf and where to start. This is where we come in and this is where a good relationship or agreement with a venue benefits all involved. I think I can happily say that none of the venues we do work with and do pay our commissions are anything but happy with working with us and its amazing when they do have free space in their dairy how a call to us can soon fill that spot. There is no right or wrong in my original statement, it just simply amazes me from a business point of view how quick some clubs are to shut the door.

 

[SwingsitlikeHogan]

Private members clubs first duty is to the members, who like to be able to turn up and play when ever they want. They pay a bit for the ability to do this. If they can't get a game when they want, they leave.

Booking societies is then a balancing act. I guess once they think they have the ratio right, they don't take more bookings.

Not sure I'd want my club to give away 10% either.

This is my feeling. Big societies OK in moderation during the week - but would absolutely oppose at weekends other than for such as major charities or fundraising - and then again only so often through the year.

With my selfish private members club member hat on I, want to be able to play relativbeoly unhindered any evening during the week and at weekends at any time outside of club competition times. That's what I pay a lot of money for - maximum freedom to choose how much I play, when I play and how many holes I play.

Utopian dream? Well perhaps in today's financial climate - but that is how it is today and I will fight tooth and claw to keep it that way - accepting that I will have to come to compromises on that position from time to time.

Noter - we were signed up with PGA City Golf - it didn't work for the members one little bit. Once bitten twice shy.

 

[chrisd]

I am a member of a private members club and, believe me, lot of members don't want bookings of groups and societies, indeed many would happily pay a higher annual sub if they could be stopped. Having said that, we do have societies a couple of days a week and generally everyone is happy.

The point is though that we wouldn't be trying to run a business model in the way you suggest. We budget for our outside income and membership revenue and pretty much survive financially pretty well, so, we aren't in need of employing someone on a commission to generate business and by targeting our own advertising we can attract business from were we choose, I believe, that to be better for the members and the visitors alike and often attracts people to join our club.

Also, by handling bookings ourselves we save paying commission, don't get told what to do, or threatened, by a company if and when the groups interest and those of the club members vary, and are controlling our own members interests in the way that they want. If the club/manager says no its because, I would think, the club members don't want what you offer.

 

[CheltenhamHacker]

So the price you're charging the guest is the normal greenfee they would get if they rang up themselves? And you make all of your money based on the Golf Course giving you a discount effectively?

If the Golf Course thought the fees needed to be 10% less, they would charge that. Otherwise surely the next group of 40 golfers (who arrange it themselves) can ring up and expect 10% off? This confuses me. I recently went on a three day trip to West Wales. I don't know what the company paid to each golf course, but I paid slightly above the value of the three rounds, and the hotel booking, purely so that I didn't have the hassle of having to book each one myself. Why not charge the golfers slightly above the green fee price, and make your money that way. Any discount the golf course gives you is a bonus then!

 

[Shiney1983]

Hi Ger147, cant see in my original statement that I said my post was relevant to every private members club in the uk?? in response to your points I agree the golf club is not focused on maximising profit as a business, but in general, can a golf club ever really have TO MUCH MONEY sitting in their bank account? Your other points are off track to my original post, I can see you are a head pro, so if a member comes in to your shop and says I have seen that driver for £25 less at Direct golf, do you tell them to go to Direct golf or do you match the price and make the sale? Regards the VAT I think the threshold for becoming VAT liable is only something like £60k so the majority of golf clubs in the UK are VAT liable.

 

[BoadieBroadus]

Hi Boadie, how would you feel if your insurance broker, mortgage broker, etc..... turned round to you and said, thanks for using me, here is my invoice for £x? It just doesn't work that way. Its the end product supplier, business and biggest earner that needs to be flexible in the ways it generates more business.

in every instance that i use a broker, yes they do charge me. it's why i don't use them for the items you mention. i suppose i only use them for ticket purchases, in which case yes i am charged a booking commission every time. it does just work that way...

 

[Shiney1983]

Hi, let me guess you had to sign up with PGA city, pay an upfront fee in hope that business would come your way, but it didn't? This is where agencies like us are different. You only pay money out on bookings that have happened and paid for.

 

[SwingsitlikeHogan]

Not quite sure why you wouldn't just negotiate a price with the supplier (the golf club); add your margin to that cost price, and sell it at that price to the 'society'.

You approach a number of clubs put together your price for each club according to the deal - if any - they offer you, and the society chooses.

 

[ger147]

Hi Ger147, cant see in my original statement that I said my post was relevant to every private members club in the uk?? in response to your points I agree the golf club is not focused on maximising profit as a business, but in general, can a golf club ever really have TO MUCH MONEY sitting in their bank account? Your other points are off track to my original post, I can see you are a head pro, so if a member comes in to your shop and says I have seen that driver for £25 less at Direct golf, do you tell them to go to Direct golf or do you match the price and make the sale? Regards the VAT I think the threshold for becoming VAT liable is only something like £60k so the majority of golf clubs in the UK are VAT liable.

Glad we finally got the issue of golf clubs not being business cleared up. With that point clarified, the rest of your original post becomes irrelevant as they are not business and therefore not about solely maximising revenues and profits. Many golf clubs are not in the position where they have to and to keep their members happy are better off in the long run refusing a booking such as the one you tried to make. If you don't believe me, that's fine you don't have to - you're free to be wrong.

As for the point about me being a pro - now that I've had time to wipe the tears from my eyes, as your a newbie I'll cut you some slack and explain that my description is a forum software feature. As you make more posts your status changes. You are a newbie because you've just joined. I'm a Club Pro because I've been here a bit longer and made some posts.

I'm glad it wasn't a Major Champion reply to your posts.

 

[SwingsitlikeHogan]

Hi, let me guess you had to sign up with PGA city, pay an upfront fee in hope that business would come your way, but it didn't? This is where agencies like us are different. You only pay money out on bookings that have happened and paid for.

On our PGA City experience - as I understand it PGA City paid the club for so many 4 balls (or were supposed to pay) - we didn't pay PGA City anything. Problerm was that members didn't like PGA City members (and I know there are a few on here - or at least ex-PGA City members) playing at weekend and evening times when the course was normally quiet - times that such as I like to roll-up on an ad-hoc basis to have a few holes.

If the members of a private members club are happy to pay commission to a company such as yours to bring it business - the members can debate it and vote to sanction it - or not.

 

[JustOne]

Hi Patricks148, I think you have totally missed the point here. They are more than happy to take the booking with out paying the commission, but do not want to pay the commission. If your yearly subs went up next year due to a drop in visitor revenue and then you found out your secretary turned away a £4k booking for the sake of £400, knowing that booking was still worth probably about £k profit for the club, would you be happy?

I'm 100% on your side. Good original post too.

Some clubs are more 'jobsworth' than others. It's just how it is and you really can't legislate for what one club is going to be like compared to another.

I can name a few clubs that will reduce your green fee if you just ask (because they'd rather get SOMETHING in the till) whereas others will simply tell you where to go. Life mate,... just like here,... you'll get some agreeing with you... and some not. :thup:

 

[Deleted member 17920]

I have to say I am with you on this one Shiney. I cant understand why clubs are not snapping your hand off for a 10% cut for that kind of deal. They are getting 40 golfers paying then on top of that drinks and spends in the shop for the pro etc and they don't have to organise anything. Good value for all concerned. As for everyone else who thinks 10% is too much how much do you think Golfbreak, Your golf travel, tee off times, direct tee times and travelzoo and groupon make from these deals. Its more than 10%. Brokers are a pain in most businesses but they seem to do OK in the golf industry. Oh and welcome to the forum.

 

[SwingsitlikeHogan]

...but in general, can a golf club ever really have TO MUCH MONEY sitting in their bank account?

Would you be surprised to learn that the answer to this question couild be YES - if accumulation of that nice healthy balance was achieved through means detrimental to the playing enjoyment of the members.

All the above said though - I am a bit surprised that clubs won't cut you a deal and give you a 10% reduction in the green fee - because that is in fact all it is you are asking for - and you charge the full green fee to the society to make your margin - or you pass on whatever part of that reduction you so choose to do. That's between yourself and the society.

 

[Shiney1983]

Thanks Lincoln, Glad to hear that there is someone who understand the industry. ;-)