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Current Trends Survey Results Your Club Past, Present & Future

reid consulting services, inc. a new generation of club management www.consultingrcs.com \

(623) 322-0773

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ď‚— Respondent Overview

Current Industry Trends Reid Consulting Services, Inc. conducts a comprehensive survey annually to evaluate the Club industry and inform hospitality professionals as to current trends and shared opportunities for improvement and growth. The following pages will present and discuss survey results.

ď‚Ą

Clubs from 15 states and one European country participated in this survey:

Arizona

California

Virginia

Idaho

Maryland

Massachusetts

Montana

Minnesota

North Carolina

Nevada

Washington

Oklahoma

Colorado

South Carolina

Florida

United Kingdom

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Club Information Type of Club

Number of Members 38%

City Club 8% 2% 4%

Country Club

14%

Private Residence Club 72%

Public Golf Club

12%12%12% 10% 4%

4%

6%

0%

Other, please specify operations management \ strategic planning \ executive recruiting \ crisis management \ training


Management Type 2% 14%

Board of Directors Developer

84%

Partnership/Private Owner

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Money Magazine: April 2010 TEE OFF FOR LESS By Beth Braverman “The deal: With membership shrinking, many golf clubs are trying to lure new members or retain current ones by reducing dues or initiation fees, and waiving extra charges to use the pool and other amenities. How to nab it: Call the club you‟d like to join and ask if discounts are available, since may deals aren‟t advertised. Sample savings: The Marlborough Club Country Club in Marlborough, Mass., recently dropped its $4,000 initiation fee and instead introduced a $1,000 commitment fee, which will be applied toward your dues in 2011 and 2012 if you remain a member.” operations management \ strategic planning \ executive recruiting \ crisis management \ training


Initiation Fees 2009 •11% Increased •57% Remained the

Same

An average of 58.6% of decision makers found that their choice to increase, decrease or maintain initiation fees met expectations.

•30% Decreased •2% Waived

100% of Clubs that waived initiation fees felt the decision fell short of expectations.

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Membership Dues 2009 •64% Increased •28% Remained the

Same •9% Decreased •0% Waived

67% of Clubs that decreased their membership dues indicated the decision fell short of expectations. An average of 69.5% of Clubs that increased or maintained membership dues found the choice to have met expectations.

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Do you offer Reciprocal Memberships? Yes

37%

No

63%

Do you offer Junior Memberships? Yes

55%

No

45%

Do you offer a Member for a Day Opportunity? Yes No

15% 85%

Do you offer Annual and/or Guest Memberships? Yes

15%

No 85% Of those that responded yes, 50% charge an initiation and 50% do not. Of the respondents who require initiation fees, an average of $8,500/annual membership and $500/guest membership is assessed. These memberships allow for Golf and Dining. (Usage parameters/restrictions were not identified.)

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Are you out of touch with your membership?  Do you know?     

Average age of your membership Top 3 zip codes your members reside in Needs of changing demographics Where your members frequent when they are not at the club Usage and spending trends

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What has been the preferred dining experience within your Club operation for lunch? • Respondents indicated a dining preference of the Grill

(71.7%) for lunch followed by Fast, Casual Dining (34.8%). • Family Style Dining and Upscale Bar Foods (6.5%) were noted as the least popular service styles for lunch. • OTHER • Daily Buffet • Multiple Outlets

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What has been the preferred dining experience within your Club operation for dinner? • Respondents indicated Upscale, Informal dining (54.3%) as • • • •

the preferred dining experience for dinner Both the Grill and Weekly Dinner Specials (34.8%) were indicated as the secondary dining preference for dinner Clubs with more than 600 members appear to have a more significant demand for Formal Dining than those with less Clubs with more than 400 members appear to have a more significant demand for Family Style Dining OTHER • Bar Dining

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Dining Trends from 2008  Results from the 2008, RCS Current Trends Survey

indicated the following:  40% increase in casual dining  62% decrease in formal dining  60% decrease in catered events  50% decrease and 21% unchanged social entertaining

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The majority of respondents indicated that choices made regarding food and beverage minimums either met or exceeded expectations. Food and Beverage Minimum

Unused Minimums

• 4% Newly Instituted

• 25% Increase

• 9% Increased

• 39% Remained the Same

• 46% Remained the Same

• 32% Decrease

• 2% Decreased

• 4% Not Applicable

• 0% Waived • 39% Not Applicable

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F&B Minimum Trend from 2008 ď‚— Results from the 2008 RCS Current Trends Survey

indicated the following: ď‚Ą

70% of respondents indicated that they did not have a food and beverage minimum in place in 2008.

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Membership Satisfaction  Membership’s overall

satisfaction level with Club operations to date.  27% Extremely Satisfied  60% Very Satisfied  11% Satisfied  2% Neither Satisfied nor Dissatisfied  0% Dissatisfied  0% Very Dissatisfied

 Membership's current

satisfaction level compared to 2008 satisfaction levels?  49% More Satisfied  44% Equally Satisfied  7% Less Satisfied

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Membership Satisfaction ď‚— 75% of Members who are currently extremely

satisfied are more satisfied than they were in 2008. ď‚— Members who are very satisfied or satisfied are more or equally satisfied than in 2008. ď‚— Members who are currently neither satisfied nor dissatisfied were equally satisfied in 2008.

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Membership Satisfaction Respondent Comments  Currently building new clubhouse.  Just finished golf course renovation and practice center renovation.  Satisfaction levels indicated are my personal opinion. A

  

   

comprehensive survey is expected this year that will give us factual results. They are always happy to be here. Affected by recession. In spite of the economic condition we have not sacrificed on quality of products and service we provide to our members therefore the satisfaction level stays high. Ever since October of 2008 members have been far more critical and demanding. Management changes were made to increase operational satisfaction. We were successful 154 on waitlist and F&B revenue on the rise. Our survey shows that our very satisfied members comment did increased by 5%. operations management \ strategic planning \ executive recruiting \ crisis management \ training


Usage Patterns in 2009 How has your membership’s usage changed over the past year? % Change

80% 70% 60% 50% 40% 30% 20%

10% 0%

Beverage Sales Increase 49% Decrease 33% No Change 18% N/A 0%

Fitness 44% 2% 24% 29%

Tennis Usage 22% 13% 31% 33%

Pool Usage 40% 13% 22% 24%

Spa Services 13% 4% 13% 69%

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Usage Patterns in 2009

% Change

How has your membership’s usage changed over the past year? 70% 60% 50% 40% 30% 20% 10% 0%

Increase Decrease No Change N/A

Golf Rounds

Guest Usage

Family Usage

22% 36% 29% 13%

29% 47% 22% 2%

62% 7% 24% 7%

Overall Overall Spending Club Part. Habits 51% 29% 31% 47% 18% 24% 0% 0%

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Usage Patterns Comparison 2008

2009

 40% decrease in overall spending

 47% decrease in overall spending

 55% no change in guest usage

 47% decrease in guest usage

 75% no change in children‟s

 36% decrease and 29% no

activities  42% no change in golf rounds

change in golf rounds

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Overall Spending vs. Membership Dues • 77% of Clubs that saw an overall increase in spending increased Club dues in 2009. • 68% of Clubs that saw an overall decrease in spending increased their Club dues in 2009. • 100% of Clubs that saw no change to overall spending either increased or maintained Club dues in 2009.

Overall Club Participation vs. Membership Dues • 63% of Clubs that saw an overall increase in participation increased Club dues in 2009. • 93% of Clubs that saw an overall decrease in participation increased their Club dues in 2009. • 63% of Clubs that saw no change to overall participation maintained Club dues in 2009.

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operations management \ strategic planning \ executive recruiting \ crisis management \ training


Decrease in guest usage, as a percentage of revenue, influence on the overall revenue for golf at the Club. 5% or less 6-10% 11-20% 5%

45%

50% 45% 5% 5% or less

50%

6-10%

Did the decrease in guest usage impact F&B revenue? Yes

51%

No

20%

Not Applicable

29%

77% of Clubs that indicated an increase in Guest Usage also indicated an increase in Club dues in 2009. 73% of Clubs that indicated an decrease in Guest Usage indicated an increase in Club dues in 2009.

11-20% operations management \ strategic planning \ executive recruiting \ crisis management \ training


Club Snap Shot: Your Club Today Cleanliness and Upkeep of Club Facilities Club Communications Competitiveness within the Local Market 36%

43% 38% 40%

31%

17%

26% 21% 21% 12% 10% 0%

Exceptional Excellent

Very Good

Good

0%

2%

0%

Fair

0% 0%

2%

Donâ€&#x;t Know

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Club Snap Shot: Your Club Today Service Standards

Staff Knowledge

Value Received

52% 43% 38% 29% 24%

26% 24% 24%

17%

12% 5%

Exceptional Excellent

Very Good

5%

Good

0% 0% 2%

0% 0% 0%

Fair

Donâ€&#x;t Know

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Negative Influences To what degree have the following negatively impacted the financial stability of your Club?

Not at All

Somewhat

A Great Deal 76%

62% 33%

2% 2%

45% 43%

Extremely 71%

71%

50% 26% 19%

7% 5% 5%

19% 5% 0%

12%

17% 0%

24% 5%

Member Satisfaction

Member Resignation

Club Management

Changes to Economy

Changing Demographics

Aging Facilities

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0%


Primary Reasons for Membership Resignation 2% 2%

Personal Finances

14%

26%

Other, please specify Member Moved 56%

Club Finances Job Change

OTHER Attrition

Relocation

“Old guard� dying off as club ages

Dues increases and perceived value

Lack of usage

Lifestyle changes

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Member Resignations Do you conduct a formal member exit interview? Yes No

45% 55%

The following were indicated as the person or group who conduct the interview. Membership Director 50% Membership Committee 33% General Manager

ď‚— According to research

conducted by Club Essentials over the past ten years the majority of members at risk of resignation have been part of the Club for 5-10 years.

17%

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Club Member Prospecting

Do you have a waitlist to resign membership at the Club?

Average

32% 68%

On Target

Yes No

7%

Highly Effective & Aggressive

Do you have a waitlist to join the Club?

31% 2%

14%

Not Prospecting

40% 60%

Stale

Yes No

45%

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Member Recruitment & Retention ď‚— “The private club experience can include great golf

and great food combined with personalized service but must also have great programming activities that promote family unity, business networking, travel and the arts.� -Frank Gore, Chief Marketing Officer of Eagle Golf

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 Method to determine the worth of a

Member Lifetime Value Do you calculate each member’s lifetime value? Yes

17%

No

83%

Member  Not just initiation fee and dues  Multiply these by the average tenure of your membership to consider the value of a single member  Existing members bring in 30-50% of new members

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Identifying Members‟ Needs by Demographic  Diverse demographics represent a cross section of

the current and future membership. These demographics indicate that there is and will continue to be a wide range of needs that each Club will need to address and accommodate. “We all live with the objective of being happy; our lives are all different and yet the same.” -Anne Frank

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29%

29%

Social

Other, please specify

25% 8%

8%

Reciprocal

Junior

Guest

Extended Family‌

57% 43%

29%

17%

Corporate

Yes No

25%

Annual

In an effort to reinvigorate your membership and attract new, younger members would you consider implementing new membership categories?

New Club Membership Categories

OTHER

Trial

Non-property owner

Legacy

Sponsor company events

Senior (over 70) initiation fee at a lesser amount

Sports membership

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66% of respondents have increased and/or added family programming, including camps, family style dining and babysitting to create a draw for new, younger members.  New Tennis/Pool/Fitness             

Facilities Health and Wellness Fitness Activities Renovated pool facility Dedicated Concierge Wine dinners Bar-b-ques and Informal Buffets Tennis and Aquatics Events Ballroom Dance Lessons Cooking Classes Coed Golf “League" Internet Marketing within Membership Increased Social Programs Casual dress

 Baby Sitting  Sundays' Kids Buffet  Numerous Family Events  Build a Children‟s Center  Interclub Junior Golf, Swim     

 

and Tennis Leagues Children's Etiquette Class Kids Camps Family Style Dining Family Participation Strong Junior Golf Program Improved Family Events Fun Events

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Programming today must be easily accessible by a diverse demographic and not compromise brand integrity or legacy.

The following were indicated as the outlets most likely to influence a shift in Club culture through positive change 5%

Events & Club Programming Food & Beverage

20%

Golf

2% 15%

58%

Spa & Fitness Other, please specify

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Dress Code % of Respondents Who Allow Jeans to be Worn in Specific Areas of the Club 63%

59%

56%

41%

37% 27%

Other, please specify

Spa/Fitness Center

Golf Course

Outdoor Patios

2%

Driving Range

Dining Room

Clubhouse

Bar/Lounge

7%

47% of respondents who indicated „other‟ do not allow jeans to be worn.


Dress Code Are sports-coats required in the dining room? Yes 22% No 78% We are a western destination club and do not aspire to a more formal dress code In dress area For bistro dinners only, not lunch In the Formal dining room, not the grill Preferable not mandatory At night it is requested and a tie Optional operations management \ strategic planning \ executive recruiting \ crisis management \ training


National Trends Taking Stage in the Club

56%

59% 66%

Growing/Emerging Dining Concepts

29%

29%

29%

Locally sourced meats and seafood

Bite-size/mini desserts

Nutritionally balanced children's dishes

Gluten-free/foodallergy conscious

Wine dinners

Locally grown produce

Half/smaller portion for a smaller price

Regional ethnic cuisine

Simplicity/back to basics

32% 41% 41%

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National Trends Taking Stage in the Club Growing/Emerging Beverage Concepts 39% 29%

27%

Other, please specify

Private Label Upgrade

Not Applicable

2%

Microdistilled/artisan liquor

Locally produced wine and beer

Culinary cocktails

10%

15%

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National Trends Taking Stage in the Club Growing/Emerging Fitness Concepts 44% 32%

29%

24%

22%

12%

10%

10%

5%

Bikram Yoga

Spin Classes

Yogalates

Dance Based Workouts

Boot-camp

Functional Training

Yoga

Pilates

Sports Performance…

Other, please specify

12%

Martial Arts Based Workouts

15%

Boomer Fitness

17%

67% of respondents who indicated „other‟ have no fitness facilities or programs.


Youth Programming

Do you offer year-round youth programming? Yes

39%

No

61%

Are you creating opportunities for not only parents, but children to spend money at the Club?

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Youth Programming

Areas of the Club that Promote Youth Activities 76%

66%

59%

10%

10%

7%

Equestrian

Other

None

Children's Area

Tennis

Swimming

Golf

32%

Outdoor Recreation

44%

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If the average age of your Club members in five years is 46-55, who are these people today?

Average Member Age in Five Years 2% 12%

What will bring them to the table and ensure that they add long term value to your Club? What will you do differently to address the needs of a membership whoâ€&#x;s average age is 56-65?

47%

39%

46-55 56-65 66-75 >75

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What steps are you taking today to ensure the needs of this demographic are met by the Club in five years? 78% 59%

56%

66%

56%

5%

None

Programming Changes

Menu Changes

Membership Drive

IT Improvements

Capital Improvements

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IT at the Club Membership's Computer Proficiency 0% 3%

Novice 30%

Does your Club offer complimentary wireless internet in any of the dining areas? Yes No

70% 30%

Intermediate Advanced 67%

Expert

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PDAs and Cell Phone Usage Have you felt the need to adjust/relax your policy on cell phone or PDA usage in public areas? Yes 41% No 59% Cell phones on silent mode. Texting OK. No speaking or ringing of phones No longer forbidden, but ask for discretion and not at a dining table Common practice to step out into the hall and use cell phones While we will not allow them in the dining room, we will allow them now on the golf course at the discretion of the personâ€&#x;s playing partners Allow use of PDA but no speaking on the PDA operations management \ strategic planning \ executive recruiting \ crisis management \ training


Social Media

To what degree have you incorporated social media into your member experience? 0%

43% 57%

Not at All Somewhat A Great Deal

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How important to your membership is the incorporation of social media to the Club’s culture? 41%

41% 0%

0%

Very

Extremely

Don't Know

Somewhat

Not at All

19%

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In five years, how important to your membership will the incorporation of social media be? 41% 30% 8%

Don't Know

Very

Somewhat

Not at All

11%

Extremely

11%

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Social Media Today vs. In Five Years  20% of respondents who felt social media was unimportant today

indicated that it would continue to be unimportant in five years.  60% of respondents who indicated social media to be not at all

important today, indicated that it would be somewhat to very important in five years.  Of those who felt it to be somewhat important today 60% felt it

will somewhat to very important in five years.  Of those who indicated it was very important today 86% felt it

would be very to extremely important in five years. operations management \ strategic planning \ executive recruiting \ crisis management \ training


Outside Revenue Opportunities Is limited public play an option at your Club? Yes No

5% 95%

Do you allow outside events such as weddings or golf tournaments? Yes No

75% 25%

 Allowable Outside

Events  

  

Catering only-No golf Projecting wedding revenue to supersede all other food and beverage sales by 10% Only if sponsored by a member National tournaments Only weddings Limited number, 8 per year

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What is the single biggest lesson you learned in 2009 that will fuel your decisions to make changes in 2010?  Take nothing for granted.  We must earn our way everyday in everyway

 Need to upgrade the fitness center  The entire industry has been "reset" and we are at a new starting    

point Watch expenses. Courage to change Understand your Board A changing membership means a changing club so we must continue to work hard in keeping the club culture, history and traditions alive. Members are not amused by financial loss, and cut back accordingly operations management \ strategic planning \ executive recruiting \ crisis management \ training


What is the single biggest lesson you learned in 2009 that will fuel your decisions to make changes in 2010?  Give the members what they want  The culture in a city club is much more structured than country       

clubs Better communication with membership How the economy shakes out the first half of the year Stay ahead of the curve. Be proactive and not reactive Continuously look for new ways to generate revenue Even though less money is coming in, services and amenities must improve Dues increases were a driving force in member resignation Be willing to bargain in the ballroom operations management \ strategic planning \ executive recruiting \ crisis management \ training


What is the single biggest lesson you learned in 2009 that will fuel your decisions to make changes in 2010?  Member feedback from our annual survey for all departments  The business is changing  Membership sales are down and we need to get more prospects     

to fill our roster Do your homework and take your time, rushing a decision is not the answer. Treat the club as a cruise ship and turn it slowly Do what ever you can to keep the flow of members dues coming That change is constant and the economy will not get well soon, therefore we have to do more with less and make less with more! Don't stop creating revenue generating programs.

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Current Industry Trends