We have been talking about the decline in membership over the last few years. One item slowing down any recovery in the club industry is the difficulty in getting new members and keeping the existing ones. We had hope that as the economy recovered more people would consider joining a club. However, the uncertainty generated by the debt ceiling debate, the downgrade of the S&P rating and the volatility of the stock market has put a damper on any recovery. In discussions with managers around the country, most felt that 2011 would be a better, but not great, year. That response is now up for debate. It will be interesting to see what happens the rest of the year.
What is interesting, however, is how interconnected all this news is. Monday’s stock market drop was based on underlying problems surrounding the final rise in the debt limit and ultimate downgrade of the US bonds. After a partial recovery on Tuesday, Wednesday’s drop reflected the uncertainty of the financial position in Europe. So how does this impact clubs. Joining or remaining a member of a club is dependent on consumer confidence. It is a discretionary expense and are members willing to take the step? In many cases, clubs are finding it difficult to remain relevant to the local community and uncertainty in the economy adds to the pressure. No one is sure what is going to happen next other than the recovery will be slower in the economy as a whole and in housing in particular. What are your thoughts on how you see the economic upheaval impacting your club and its business for the rest of the year?
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