By Todd Swisher, CPA

It’s been more than two years since COVID wreaked havoc on the hospitality industry. Lockdowns, social distancing, indoor dining restrictions, and the evaporation of business travel left golf and tennis among the “last activities standing” in 2020.

As we now know, private clubs were able to strategically regroup by quickly innovating to ensure members felt safe as clubs expanded offerings like outdoor dining, food to go, virtual fitness classes, etc.

Between 2020 and 2023, country clubs have been experiencing some of their best years. But will the industry be able to maintain this momentum into 2024?

After all, clubs are at the mercy of discretionary income. When the economy slows and consumers must decide where to spend their money, a club membership can quickly find its way to the budgetary chopping block.

Plus, it wasn’t long ago that country clubs struggled to remain relevant. Changing demographics, overdevelopment, and a declining interest in golf were to blame and could plague the industry again in the future.

The country club that understands where the economy is heading and strategically plans to provide a one-of-a-kind experience for its members will be the club that remains relevant going forward. That’s why the team at PBMares created this article that explores the economic outlook for 2024 and the relevant challenges and solutions for club controllers, general managers, CFOs, and board members to consider.

Overall Economic Outlook for 2024

The U.S. economy overcame fears about a recession in 2023 and generated stronger than expected GDP growth.

As the labor market continues to rebalance itself, a report from Goldman Sachs expects GDP to grow approximately two percent in 2024 and real disposable income to grow nearly three percent.

The overall 2024 outlook emphasizes the importance of clubs embracing change, whether through modernizing facilities, revamping membership structures, or diversifying offerings.

Outlook for the Private Club Industry Remains Strong

For private clubs, this above outlook is bolstered by strong data surrounding membership demand and the persistence of waiting lists.

In addition, members are joining clubs at a younger average age that are trending toward higher utilization rates.

Clubs have been demonstrating strong financial health, including:

  • Annual dues and entrance fee growth remain strong
  • Increased funding from traditional sources
  • Operational health has enabled most clubs to maintain or improve service levels
  • Aggressive strategies for capital improvements in the short-term

Emerging Trends in the Industry

The trend of private clubs expanding their offerings to include comprehensive wellness programs, from state-of-the-art fitness facilities to holistic health services, will likely continue into the foreseeable future.

As members seek experiences that contribute to both physical and mental well-being, many clubs are collaborating with wellness experts and incorporating mindfulness practices into their offerings.

There is also a growing emphasis on curating a holistic lifestyle experience. Some clubs are establishing partnerships with luxury brands, hosting exclusive events, and offering bespoke services that cater to the evolving tastes and unique preferences of their membership base.

Some clubs are adding exciting elements that cater to a younger generation by creating cost-effective and strategic partnerships with:

  • Renowned chefs
  • Artists
  • Social media influencers

These partnerships enhance the exclusive feel of the club and provide members with unique experiences that are likely to create buzz through word of mouth and posts on members’ social media accounts.

Clubs are also creating these partnerships with one another. Reciprocal agreements elevate the value proposition for potential members and enable existing members to access a network of clubs on a global scale.

Challenges Continue to Persist

Although the outlook for the private club industry continues to look strong, ongoing challenges in human resources continue to be a tricky issue:

  • Increasing wages are a concern, particularly for the people-intensive nature of so many of a club’s amenities.
  • Cost savings are important but must not compromise member experience or service standards.
  • Clubs face a constant challenge to retain talented workers and hire new people with the requisite dedication to offering members the high-end service they’ve come to expect.

Clubs must develop creative strategies that sustain capital investment initiatives. Even if inflation eases in 2024, the existing impacts on budgets continue to present a challenge.

Private clubs have long been bastions of exclusivity that provide members a curated experience not easily found in traditional social spaces. But as it becomes more and more expensive to maintain that high level of service, developing and deploying innovative solutions remains critical.

Innovative Solutions for Private Clubs in 2024

Clubs that understand the best practices landscape and where gaps exist for their particular establishment can take action to bridge those gaps. That action can include:

Exploring funding sources and strategies. Interest rate caps and other derivative instruments can provide consistent cash flow. Private clubs that explore funding sources  and the various avenues for capital investment will thrive in 2024 and beyond.

Considering how your club can adopt and deploy new technology. By leveraging emerging technology and AI, your country club can minimize expenses and streamline daily operations. When it comes to emerging tech and AI, there are many pieces of “low-hanging fruit” that private clubs can easily deploy.

Learn More

PBMares’ private club clients receive industry-leading expertise and support with a complete range of customized services. Contact our team today.