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Private golf clubs struggle amid economic downturn

Private golf clubs struggle amid economic downturn

In the popular 1980 movie comedy “Caddyshack,” private and elite Bushwood Country Club is besieged b

In the popular 1980 movie comedy “Caddyshack,” private and elite Bushwood Country Club is besieged by gophers and the intrusion of zany real estate tycoon Al Czervik, played by the late Rodney Dangerfield.

Wacky assistant greens superintendent Carl Spackler, played by Bill Murray, never conquers the wily gophers, and he blows up much of the club trying to exterminate them.

These days, private golf clubs all across the country, including the Capital Region, are struggling for survival, and gophers are the least of their problems. They don’t have the economic muscle of Bushwood’s Ty Webb (Chevy Chase) or Judge Smalls (Ted Knight).

“I’ve heard it from Buffalo right down the Thruway corridor. Almost every club I’ve talked to has lost 40 to 50 members,” said Bill Moore, executive director of the New York State Golf Association. “The good thing is that I haven’t heard of any clubs closing. Some clubs are in trouble, but I think they can fight their way out of it. Clubs are definitely looking at their expenses, though.”

The greater Capital Region is loaded with private clubs, including Mohawk Golf Club in Niskayuna, The Edison Club in Rexford, Shaker Ridge Country Club in Loudonville, Albany Country Club and Colonie Golf & Country Club in Voorheesville, Wolferts Roost Country Club in Albany, the Country Club of Troy in Brunswick and Pinehaven Country Club in Guilderland, just to name a few. Nearly all of them have lost at least 50 members in the past year or so.

“I think it’s a cyclical thing,” said Bill Frutchy, a 26-year member of The Edison Club and a three-time winner of the Gazette County Amateur championship. “I think it will bounce back. Here, we had a membership of about 490 two years ago, and I hear we’re down to about 400 right now.”

Pricey proposition

“Golf club membership is just a microcosm of the economy,” said Country Club of Troy’s Matt Clarke, a former New York State Mid-Amateur champion who is also a financial consultant. “The real cash crunch for the private clubs started with a downhill slide when they took away tax deductions for dues about 15 years ago. Secondly, there was a fundamental change in the way families spent their leisure time. You’ve got soccer and hockey programs now. With a family membership before, you left your kids at the club and they played golf, tennis or swam.

“Finally, with the recent economic problems, costs are rising steadily, and it’s getting more difficult to maintain clubs. Remember, it’s a short season in the Northeast, yet you have a 12-month deal at the country club. I think all the clubs are going to have to find a better business model. They will have to be more competitive to survive.”

The cost of belonging to a private club goes well beyond just playing golf. Often, there are initiation fees of $5,000 or more. Annual dues can be as much as another $5,000 to $6,000, and then there are “assessments” for club improvements that often run as much as $250 a month or more.

In order to attract new members, Shaker Ridge Country Club is offering to waive its initiation fee. Other clubs are creating new types of family and/or single memberships that cost less than the old memberships.

subpar spending

Nationally, between 10 to 15 percent of all private clubs in the country are defined as “at risk,” with memberships down 29 percent and the amount of golf rounds played down 22 percent. More than half of these clubs are operating in the red, according to James R. Kass of the National Golf Foundation.

Although public courses greatly outnumber private courses, golf in the United States began in the private-club sector in 1888 at St. Andrews Golf Club in Yonkers. Six years later, the United States Golf Association, the sport’s chief governing body, was formed by five of the top private clubs in that era.

Of the estimated 15,970 golf courses in the U.S., 4,415 are private clubs, with a membership of 2.1 million. The number of private clubs hasn’t changed much in the past 80 years.

Based on the National Golf Foundation’s latest survey, which was in 2008 and based on the 2007 season, 29.5 million rounds of golf were played and golfers spent $24.3 million on both greens fees and equipment. But even before the most recent economic turndown, the sport was losing its momentum. Golf Datatech reported a decline of 1.6 percent in the number of golf rounds played in its latest survey last November. Most experts are expecting a much larger reduction this season, and most experts feel that the Capital Region will be no exception.

“It’s not just golf club membership or the amount of rounds played. Golf equipment is down all across the country,” said Schenectady club maker Dick Bogdan, who makes many of his clubs for private-club members. “I talk to club makers all over the country and they say people are not buying clubs anymore. They are keeping their old clubs and getting them fixed. It’s a sign of the times we’re in.”

Budget-minded

One local organization that monitors the health of the game is the Northeastern New York PGA. All of the private clubs have head pros, who belong to the NENYPGA, and they often have several assistant pros who also belong.

“I would definitely agree that there are a number of private facilities that are struggling a little bit in terms of losing memberships,” said NENYPGA executive director Tracie Heighes. “There’s no question that during tough economic times, families are looking very carefully at their own personal budgets. It’s all about the discretionary dollar. We are in the entertainment and recreation business, and those are line items that are taken out when times are tough. When a family looks at their budget, they may see that one spouse has lost a job or taken a pay cut. Something has to be cut out of the budget, and it’s the discretionary dollar that takes a hit.”

Several private clubs have either changed general managers or head pros recently in an effort to save money or go in a different direction. Clubs have also trimmed their staffs, including cutting an assistant pro or two.

“We have about 180 members in the NENYPGA, and we historically lose one or two pros and then gain one or two pros back every year,” said Heighes. “We’ve also stayed relatively consistent with our apprentices or assistant pros, but there are many facilities which are cutting their second or third apprentice as a cost-cutting measure. Also, there are fewer golf professionals coming into the business. In some areas, there is actually a shortage of assistant professionals.”

Less private, more profit

Besides waiving initiation fees, slicing annual dues and creating different types of memberships, another way private clubs are dealing with their economic troubles is to allow public play. In the past several years, both Ballston Spa Country Club and Rolling Hills at Antlers became semi-private clubs, which allow public play at various times during the week. Colonie Golf & Club has also experimented with public play. Most private clubs also entertain public golf outings on Mondays to bring in added revenue.

“We couldn’t get enough members to keep it fully private, so they had to try to derive some extra income,” said Dan Russo of Rolling Hills at Antlers, located in Fort Johnson, near Amsterdam. “That’s the only way to do it. Last year, [the public golfer] could play pretty much all the time except weekends, during some mornings or on men’s night. The clubs have to do something to survive. Even the strongest clubs can’t survive on just their own memberships. We had 200 members, and all of a sudden, it’s down to 150. You don’t make up that kind of revenue. I’ve heard some of the private clubs in the area have lost 50 members or more. That’s $250,000 or more in lost revenue.

“In the old days, there used to be a lot of golfers at the private clubs. Now, there are a lot of people who play golf,” said Russo, one of the region’s premier players. “Times are different. Husbands and wives both work, and with the economic troubles, there isn’t enough money for some people to play golf.”

“We’ve got 820 private and public courses in New York state, though, and people are always going to play golf somewhere,” said Moore. “They might not be able to go to Saratoga National in this economy, but they might go to Capital Hills at Albany.”

Heighes agreed that golfers will still play the game somewhere.

“It is obviously more of a challenge now, but even members who are leaving the private clubs still have interest in the game,” she said. “Those individuals who may cut private memberships will still play the game. There’s no question about it. Financially, they might go to a daily fee course, but they will still be a part of the game.”

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