A club that is still well regarded felt the impact of recent global economic with membership levels reaching historic lows and operating capital dwindling. Attrition at the staff level and insufficient participation on the part of the board of directors was leading to a general breakdown in the quality, service and amenities the club had to offer. This further contributed to worsening conditions in most every aspect of the club.
As if things couldn’t get worse, the club closed for renovations, among other reasons, for more than a year, during which time membership dropped precipitously. Upon reopening there was a great deal of work to be done, including the installation of a new management team, a new course superintendent and a new food and beverage program.
The new management team was able to increase membership significantly through marketing, advertising and concessions in initiation fees. However, the newest members had a much lower median age than the club previously experienced. Many of these young professionals had tastes in food and beverage that were much more sophisticated than the existing food and beverage staff could satisfy. It became a very nasty situation, with members resigning rather than spend their required $50 F&B minimum each month. RVA Advisors was called at the suggestion of the club’s former president who was familiar with our ability to turn around even the most beleaguered organizations.
A member survey was conducted to gather more information on member opinions, wants and needs. Interviews were conducted with staffers and management as well as members of the board of directors. A thorough analysis of club financials was completed. This information was compiled by RVA Advisors into a report and recommendation to the board and General Manager.
It was clear that members felt the menu was outdated, the service slow, the beverage program lackluster, the catering fare uninspiring… the list went on. To make matters worse, the chef lacked the skills to create a suitable menu and the F&B manager lacked the work ethic to implement the change that was needed.
In such a situation, there is only one option… to clean house. RVA Advisors assisted in replacing the chef and F&B director, designing a new menu, hiring a service director to focus purely on front-of-house matters, and improving the cocktail and craft beer programs.
The results were convincing. Whereas less than 50% of members were spending their F&B minimums before this engagement, the number was up to 95% just six months after the new menu and staff debuted. Moreover, the F&B department set new sales records in the 19th Hole café as well as in banquet business YTD in 2015. Food costs are a solid 35% (pretty good for a member-owned club) and attrition is down, yielding a more engaging member experience. As of the most recent member survey more than 90% of members are at least “satisfied” with the F&B program (vs. less than half in early 2014).
Member-supported clubs are in many ways quite different from open market businesses, though member-customers still expect a product of similar quality to the best on the open market. As the quality of service and amenities on the open market improves so too must private clubs increase the quality and scope of their services. It’s for this reason that clubs, and not-for-profit entities in general, must begin to approach their operations more like businesses or face obsolescence.