Pellucid Perspective - March 2013 - (Page 2)

GOLF CLUB MANAGEMENT 3rd party management barriers falling at private clubs? Some see a ‘sea change’ in equity club reluctance to employ outside management By Jim Dunlap board typically hires a general manager to oversee the daily details of running the club, but it’s understood that the club’s board makes the major decisions regarding expenditures, programming, operations, membership and the long-term prospects for the club. Member-owned clubs, and their management teams, have traditionally been reluctant to invite third party management companies through the Members Only gates for a variety of reasons, but that may be changing, albeit slowly. Two of the golf industry’s largest third party management O companies, Troon Golf and KemperSports, have divisions within their corporate structure specifically devoted to private club management. (Other management companies, including ClubCorp, Century Golf Partners/Arnold Palmer, Billy Casper Golf, Sequoia/Canongate, Honours Golf and others, either own or manage private clubs, but don’t necessarily administer those contracts under a separate, private-only division). One reason for those private club divisions is that the recent struggles which private clubs have shared with the rest of the golf industry appear to have lessened the resistance to bringing in “outsiders” to help right the ship. “Tere’s a lot more activity in terms of private clubs being open to discussion than there was two or three years ago,” said Jim McLaughlin, head of Troon’s Privé private club division. “Equity clubs is where it is changing - developers or private owners have always been open to it. We’re seeing a sea change in the industry in that regard.” Privé has the portfolio to prove it, with nearly 50 private 18-hole equivalents under management in the U.S. and abroad, including 19 member-owned clubs. KemperSports formed its Kemper Private Collection divi- sion, headed by Barrett Eiselman, relatively recently, but already has 15 clubs in the fold. “For years, [private clubs] wouldn’t think of it,” said Kemper- ne of the hallmarks of private golf clubs, particularly member-owned, or equity, clubs, is the concept of club governance by a board composed of club members. Te Sports CEO Steve Skinner, “but now they’re starting to look for someone who can drive revenue and provide professional management of the various areas within the club. A lot of clubs have prided themselves on running by committee, but that’s not always the best way to run a business. Our job is to give them best practices and advice. Equity clubs take a little more hand-holding because of the number of board members involved in the decision process, but that goes with the territory, and that’s OK.” Te common perception, which may be true, is that the two most common barriers to bringing a third party management company into an equity club are a somewhat understandable paranoia on behalf of the club members and their boards that “outsiders” will tell them how to run their club, and the existing general manager’s fear that he will be replaced or take a cut in pay. Defusing those concerns is a major hurdle for any third party management suitor. “A big part of our approach is breaking down myths and bar- riers,” McLaughlin said. “Part of it is making sure that we are branding the Troon Privé division and understand the private club business, but that we’re not coming in to tell them how to run their business. As far as the GM is concerned, it’s more typical that the club is in a crisis of some kind, and they’re either going to replace the GM or they already have, but that’s not always the case. In some cases, the GM is doing a good job with the resources he or she has to work with. Other times, we tell them that they’re hiring a [new] GM with a management company behind him. Usually, when the GM is doing well, there’s no need to have the discussion [with us].” While the issue is obviously a concern for the existing club GM, both Skinner and McLaughlin said the value of outside professional management extends beyond the GM. “One thing a lot of clubs struggle with is what the strategy for the future of the club should be,” Skinner said. “It’s generally more about the culture of the club than the facilities, and that’s what we try to help them figure out.” “For years, [private clubs] wouldn’t think of it, but now they’re starting to look for someone who can drive revenue and provide professional management of the various areas within the club.” STEVE SKINNER, CEO, KEMPERSPORTS 2 THE PELLUCID PERSPECTIVE MARCH 2013

Table of Contents for the Digital Edition of Pellucid Perspective - March 2013

Pellucid Perspective - March 2013
Contents
3rd party management barriers falling at private clubs?
A need for technology restraint in golf
Course lures golf ’s missing generation
Picking the ‘low-hanging fruit’
February weather golf impact: No surprise...down
Portland golf has slight edge on Nike neighbor
Court approves sale of Paulson-owned resorts to Government of Singapore fund
Readers respond to ‘part-time golf ’
Casey at the bat

Pellucid Perspective - March 2013