It never ceases to amaze me when people faced with a problem, or a daunting situation, just implement the same old failed solutions. I don't know if it is the hubris of management, laziness of thought or just simple incompetence, but the same repeated attempts, always seem to be accompanied by the feeling "This time, it's different."
When the inevitable failure occurs, it is always accompanied by excessive amounts of finger pointing, and good old "pass the buck".
We have seen it with our courses. With much fanfare, back in September 2021, a management team was put in place and a year later they were removed. What did they do? Implemented the same business model that failed previously and prompted the bailout by the HOA.
Then the next management duo were appointed on October 4th 2022 and lasted until June 2023. What was their strategy? The same business model that failed twice previously. The third team were put in place July 1, 2023 and the President just resigned effective June 30, 2024. What was their business model and strategy? The same one we have seen fail over and over again.
So obviously, the Green Fees and Membership Dues model does not work. With so many alternatives, to compete on price is only going to drive us out of business. Already there is such a dichotomy between Revenue Per Round and Cost Per Round, it is embarrassing. Given our costs, our operation looses more per round than what we gain in Total Revenue. Maybe like the movies, we can find sponsors and make money selling popcorn. Sorry. Bad joke.
It is time to get innovative.
1. First and foremost, golfers have to pay for their own play. No longer can the community subsidize the cost of a round of golf.
2. Second, it appears membership is lacking, reflecting an aversion to price increases, demand is highly elastic. We will not survive a price war.
3. Third, golfers have to manage themselves. They need to be responsible else, if we have to bail them out again, we shut it down, and dissolve it.
Lets look what the HOA did to RV Park Users. The RV Park needed a new gate and despite providing over $50,000 in fees annually to the HOA, the Board made RV Park Users pay a surcharge to pay for the gate. What the HOA Board has demonstrated is that if residents want something, they must pay for it. RV Park users wanted a new gate, they were required to pay for it.
This is good. Let's apply this to the golf courses. As the HOA has stated, if golfers want something they have to pay for it. The $1.3 million dollar bridges -- golfers need to pay for it.
So how do we structure membership so that members pay equally and fairly all the costs associated with playing golf?
Here's my plan:
Do away with voluntary memberships. Make memberships compulsory. If a resident wants to play golf, they must be a member. The courses are "Members Only". Members pay an initiation fee, for example $1,500 or $2,500. This provides working capital for the next quarter.
Green Fees must be paid and are set at whatever level members want. Perhaps there is a management committee, a vote, whatever. But golfers set it at whatever price they are willing to pay,
At the end of each and every calendar quarter, within two weeks after the quarter ends, a Profit and Loss is prepared. Any loss is dividend up among the members, and each member is billed their share. This ensures the courses experience break-even each quarter. The member has 15 days to pay their surcharge. If a member does not pay their surcharge then they cannot play and are excluded from using the courses and clubhouse for at least a year.
If there is a profit, members decide what to do with it.
If members want low daily green fees, then members can expect a large surcharge at the end of the quarter.
If members agree to pay a fair price for a tee time, then members can expect a small quarterly surcharge.
Members can decide how outside play is priced, and what days it is allowed but given the bills will be paid by members, outside play becomes unimportant.
If there is a maintenance expenditure, such as the replacement of the Bridges, members will be surcharged. As with the RV Park, if the golfers use it, then they have to pay for it.
This is the only way, that the courses will be successful. Golfers have to learn that they must be responsible for the cost of their own recreation.
Thank you.
Keep the faith. Keep your head down, eye on the ball and your knees together.
With homes tanking will plantation homes hit rock bottom due ti the debt caused by the golf courses ??