Summer 2014 www.GolfIncMagazine.com 25
Private Club Financials
What makes a
club tick, financially?
A private golf club, as a business model, is
difficult for many to understand. Consultants say that can even be true for many
board members who are accomplished
business leaders in other industries.
Most private clubs have two main revenue streams: dues and food and beverage
Club Benchmarking — a Boston-based
firm that compares revenue and expenses
for private clubs — found that dues make
up 50 percent and food and beverage is at
a seemingly potent 30 percent.
So, if a private club wants to help its
bottom line — but doesn’t want to raise
dues — it should focus on increasing food
and beverage sales, right? Host more weddings, maybe? Raise the price of a Manhattan?
For most clubs, food and beverage is the
least profitable part of the business model.
Here’s why: A private club’s restaurants
and bars are not open to the public. The
club has a finite number of customers —
the club members and their families. Yet
the club still has to provide the staffing
and menu options as if it were running,
say, an Applebee’s.
See the problem?
Indeed, Club Benchmarking — which
has data from about 1,000 clubs — found
that about 75 percent of private clubs either break even or lose money when it
comes to food and beverage.
The numbers are worse when you look
at “available cash,” a term Club Bench-
Dues are the primary economic driver, but other factors
play key roles in revenue health by Mike Stetz
Private clubs with less than $6 million in revenue for 2013
Private clubs with more than $6 million revenue for 2013
Sports & Recreation: 1%
Sports and Recreation: 3% Rooms 1%
Source: Club Benchmarking