Boston, MA (May 18, 2020)
Club Benchmarking, the leading provider of business intelligence and data-driven insight for private clubs, has released the first view of COVID-19 impact on the private club industry.
The Club Benchmarking Strategic Monthly Dashboard (SMD) is a free business intelligence service for the private club industry that makes it possible to systematically measure monthly trends in Membership, Cost of Belonging, Initiation Fee and Joining, and Finances. More than 250 clubs in 38 states and four Canadian provinces are currently using the service, and participation is growing rapidly in response to the economic shutdown that began in mid-March. Analysis of year-over-year data from March 2020 versus March 2019 provides the first assessment of the financial impact of COVID-19 shutdown on the private club industry.
"As a club board member during the 2008-2009 economic meltdown, I was stunned to discover the club industry had no reliable source of benchmark data to guide the decision-making process. We built our annual benchmarking platform in 2009 to fill that gap." said company Founder Ray Cronin. "Over time, use of data became recognized as a best practice and clubs started asking for appropriate monthly KPIs for senior staff and board. Our Strategic Monthly Dashboard addresses the industry's need for accurate market trend data that allows clubs to navigate both up and down market cycles with clarity."
As expected, in March the greatest impact was on non-dues revenue, a proxy for member activity, which saw a year-over-year decline of 34.6% at the median. The average club saw non-dues revenue drop from $384,463 in March 2019 to $249,586 in March 2020. In aggregate, for all clubs participating in the service, non-dues revenue declined from $96.5 Million to $62.6 Million.
Like many other businesses, private clubs began shutting down on March 16th meaning activity for at least half of the month of March was relatively normal. Many clubs pivoted quickly to engage members with take-out dining which appears to have muted the decline in non-dues revenue. For clubs without golf i.e. yacht clubs and city/athletic clubs, non-dues revenue declined more severely than it did for clubs with golf — 39.2% versus 33.2%.
Year-over-year membership counts held steady across the industry, up marginally at .3% in March 2020. The median club without golf reported a total member count of 808 at the end of March 2020, while the median club with golf tallied 667 members.
In March 2020, the median initiation fee was $35,500 to join a club with golf and $10,000 in clubs without golf. Tracking year-over-year changes in initiation fees for March, 69% of clubs had no change, 5% decreased their initiation fee and 26% increased the initiation fee.
March reporting also showed that 24% of clubs had a wait list and 24% had a sell list meaning there are members waiting to receive equity back from the club after leaving. Of the clubs with a wait list, the median number of prospective members on the list was 16. The median number of members on the sell list was 18.
In clubs with golf reporting March 2020 data, the total cost of belonging was $11,793 at the median, up 3.7% year over year. In clubs without golf, the median was $4,652 which is an increase of 2.9% year over year.
Dues Revenue, the primary source of money to fund club operations, increased 3.7% at the median year over year for clubs with golf and 3.6% for clubs without golf.
Among all clubs, debt decreased 5.3% at the median year over year, while capital investment declined 14.6% in March 2020 from the prior year.
Club Benchmarking will continue to monitor and report on how the COVID-19 shutdowns are affecting private clubs. To learn more about how your club can get access to the Strategic Monthly Dashboard, visit www.clubbenchmarking.com/monthly
About Club Benchmarking: The concept for Club Benchmarking originated in the boardroom of a private club in response to an urgent need for facts to guide the decision-making process in the wake of the 2008-2009 economic meltdown. The company has developed a full suite of data-centric tools and services specifically for private clubs which serves the full spectrum of club industry stakeholders - club staff, general managers, boards, committees, members, owners and industry constituents including associations.
Teri Finan - Director of Communications