Private Golf Clubs Reconsider Business Model

Victoria Golf Club | BCBusiness
The beautiful Victoria Golf Club.

With the public’s disposable income on the wane, private golf clubs in B.C. have had to reconsider how they do business

Unquestionably, B.C. is home to some of the most notable private golf clubs in the country. Capilano, Royal Colwood, Shaughnessy and the Victoria Golf Club immediately come to mind. With the golfing landscape in the midst of rapid demographic change, however, these storied clubs are realizing they must adapt in order to stay healthy and viable in the future.

In total, there are 15 private golf clubs in B.C. Nine are located in the Greater Vancouver area, three in Victoria and three in the Thompson Okanagan region. Obviously, there are many more semi-private facilities in the province that also offer memberships and a somewhat “private” experience, albeit to varying degrees.

While most of the private clubs have been around for decades, Sagebrush, located in the Nicola Valley near Merritt, is a relatively new offering. Designed by lauded architect Rod Whitman and opened in 2009, the course has certainly gone through its fair share of challenges. It’s not the only private course, however, that has experienced difficulties. Indeed, the “private” golf landscape—in B.C. and beyond—has certainly taken a hit since the glory days of the 1990s and early 2000s.

“Since 2008, when the economic conditions changed dramatically in North America, the private golf clubs have been playing a different game,” says Ron Pauls, the chief operating officer at Marine Drive Golf Club in Vancouver. “Obviously golf is dependent on people’s disposable income. And, quite frankly, when times are tougher, the golf industry, and certainly the private clubs, need to adapt to these changes.”

Boasting perhaps the youngest and most active membership base in the country, the Marine Drive Golf Club hasn’t rested on its laurels. In 2008 the board began an aggressive campaign to attract even more young people, spouses and additional family members who were not yet affiliated. “We felt it was critical that our members were on board with a plan that would secure our long-term goals and viability for the future,” says Pauls. “In 2011 we hit it out of the park and added 160 new members. We’re bucking the trend. But for us it’s not about cash for the present, it’s about maintaining a fun, vibrant, healthy and sustainable club for years to come.”

Not surprisingly, the other storied clubs in ideal urban locations—Shaughnessy, Point Grey, Capilano and the Vancouver Golf Club, for example—are also, seemingly, nowhere near hard times. “Our status in terms of our waiting list, which is three or four years, has remained steady over the years,” says Capilano general manager Brad Burgart. Designed by Stanley Thompson and opened in 1938, the Capilano Golf and Country Club is, by some accounts, the most prestigious, most sought-after membership in B.C. “The absolute best golf courses in any given region, regardless of whether they are public, private or semi-private, have a definite advantage,” adds Burgart. “Yes, demand has gone down somewhat and the number of rounds played is a concern. And, since 2008 we’ve noticed a decline in terms of our food and beverage and pro shop sales. However, the golfing community is always going to be drawn to the best that’s out there. It’s always been that way. It’s the middle-tier facilities that seem to have the toughest road today.”

Outside of the larger markets and the wealthiest neighbourhoods, where locations aren’t ideal or there is more competition, a chink in the armour of the private-club model becomes evident. In areas like Pitt Meadows and Richmond in Greater Vancouver, a picture begins to emerge that isn’t all that rosy.

“The market is dwindling,” says Dave Wood, the general manager at Richmond Country Club. “We’re fortunate here in that we’re a family club with other offerings like tennis, swimming and so on. But the culture is changing. Young men are not so inclined to leave their families for the majority of the day and meet the boys for golf and dinner. Plus the competition with other, more adventurous sports and other cheaper forms of recreation is hurting golf, and the private golf club industry especially,” he says.

“There’s a shift out there that is concerning and, in some ways, the golf industry is limited in terms of what we can do. So can you join here tomorrow? Absolutely. Most of the private clubs are in the same boat as us.”

Down the road at Richmond’s Quilchena Golf & Country Club things are especially tough. “We haven’t been on a waiting list since the early ’90s,” says Kim Leclercq, membership director at Quilchena. “It’s been a challenge.” The club, which at one time cost $30,000 to join, has seen that drop to as low as $6,250 during a one-off winter special, with the rate today sitting at $12,500. “We’re looking at offering short-term memberships, flex memberships, memberships that can be re-assigned and so on. It’s a buyer’s market. And forget thinking outside the box. We’ve got to kick the box out of the room.”

The executive team also appears to be in “fight mode” at Pitt Meadows Golf Club, a private club that faces plenty of competition from nearby semi-private courses. “We’ve got 50 open spots right now,” says Mike Pierce, the club’s general manager. “What concerns me—and many of the other clubs—is the attrition rate we’re seeing. In the past we would lose 15 to 25 members per year. Now that number is significantly higher. It’s not a good sign.”

[pagebreak]Sagebrush Golf & Sporting Club is opening a new clubhouse and cottages.

The battle continues at Sagebrush Golf & Sporting Club in the Nicola Valley community of Quilchena, B.C. The club, which currently has fi lled approximately half of its 125 total membership positions, is forging ahead in spite of slower than anticipated growth. Although there has been much speculation regarding the health of the ‘boutique’ private club, especially since founder Dick Zokol departed last year, the ownership group insists it’s all systems go.

“We are fully committed to the project,” says Calvin Payne, one of four principal owners. Although a busy day at the course is 40 golfers (they consider the place packed with 60), the fact that it’s opening up a massive putting course, has new luxurious on-site cottages and is breaking ground for a new clubhouse is certainly evidence that the club is not going anywhere anytime soon.

Clearly, it’s up to every private club to assess its current models and invoke change where necessary. “As an industry, we’ve got to make changes across the board,” says Leclercq. “Asking for long-term commitments from the 25-to-40-year-old set is getting tougher and tougher. The new breed of golfer fi rst needs to ‘sell’ the idea of a membership to a spouse. If there isn’t something in it for the whole family, it’s less likely they’ll commit.”

For the corporate market, that “commitment” is also under fire. While many companies have stopped buying memberships due to costs, lack of use and so on, the marriage between private golf clubs and the business world is still strong.

“My company pays for half of my membership,” says Peter Ratzaff, a longtime member at one of the most popular clubs in Vancouver. “For me, and for many of my peers, it’s a great way to entertain clients and build loyalty. Obviously, the private club scene is tightly integrated with our corporate culture. And I don’t think that’s going to change anytime soon.”