Recession Proof Decision Making Survey Results
reid consulting services, inc. a new generation of club management www.consultingrcs.com \ (623) 322-0773 operations management \ strategic planning \ executive recruiting \ crisis management \ training
Recession Proof Decision Making? Reid Consulting Services conducted a brief survey to evaluate current trends in operations management relative to the changing economic climate. The question posed…as discretionary income continues to decline and priorities, lifestyles, and spending patterns shift what are you doing to secure your organization`s long term financial viability and deliver a high quality guest experience?
43% of respondents indicated that they are part of the Country Club industry Those that selected ‘other’ indicated that they worked at a private golf course or a resort golf course
Additional Club Industry Information
Board of Directors
Partnership Private Owner
Respondent Overview Cont.
Food & Beverage Minimum Yes 30% No 70%
Average Age of Members
Do you have a large family component? Yes 61% No 39%
Respondent Overview Continued
Does your property include a golf course? Yes 85% No 15% 100% of respondents indicated that their property features 18 HOLES Additional Amenities Offered 79% of respondents indicated that they have BANQUET/MEETING SERVICES 63% of respondents indicated that they have SPA/FITNESS FACILITIES 58% of respondents indicated that they have TENNIS COURTS 26% of respondents indicated that they have OTHER Salon Indoor/outdoor pools Piano lounge/nightclub Multiple Restaurants Skiing Marina
Have you made changes to your operation due to the economic climate?
Did you BOD, management company or owner dictate budget cuts? Yes No
Comments on dictated changes • We are watching for the
warning signs and proceeding from there • We are still in development
mode with construction on going. We curtailed our biggest construction project (The Member Lodge) and restructured our Security Department and downsized that part of our operation. Layoffs were made in all areas consistent with the impact issues. Operational expenses were reduced by 25% overall.
Change vendors or suppliers
Reduction in management
Eliminate positions to save salary amount Restructure operation
Line item cuts by percentage or dollar
Set operating expense cut by percentage or dollar
Set labor cut by percentage or dollar
Eliminate complimentary items/meals/events
Change hours of operation
33% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
If you decided on the cuts unilaterally, what did you do? Comments:
Change vendors or suppliers
• We have had a $1500 assessment
over the last six months. Members are cutting back and are disgruntled about the additional expenditures. • Manage bottom line of all
• We are primarily managing staff
levels based on rounds level and making purchases based on "need" vs. "want" or "budgeted“ • Basically just kept operational
budget flat to last year with option to reduce any discretionary spending if sales slide • Drove member value free guest
fees and many others
• Inviting staff to add input as to
how to reduce cost and increase revenue
Reduction in management
Mass layoffs Eliminate positions to save salary amount
Line item cuts by percentage or dollar
Set operating expense cut by percentage or dollar Set labor cut by percentage or dollar
Eliminate complimentary items/meals/events Change hours of operation
10% 20% 30% 40% 50% 60% 70% 80%
Comments • Hired an additional Banquet
salesperson. • We are making this the safe
haven for the membership their home away from home • Expand menus to include lower
price items raise guest fees and offer more club activities • We revised menus to better
accommodate twice a week dining vs. once a week...created Grill Room menu with lower prices and smaller portions. Trained servers more effectively for the up-selling of apps, desserts and wines. • You know me call and I will
88% of respondents have made changes to their MENU to increase revenues %50 of respondents have ADDED SOCIAL ACTIVITIES to increase revenues %25 of respondents selected OTHER Lowered IF to maintain sales pace and dues line Cooking classes, Wine tastings, pasta night Lodging fees were increased. Offered several different membership buy-in levels
Communication Did you communicate changes to your members/patrons?
78% No 22%
Overall member satisfaction is high. 69% of respondents indicated that the members and patrons are HAPPY with the OVERALL OPERATION. Members seem to be most UNHAPPY with STAFFING as indicated by 17% of respondents.
Overall staff/employee moral appears to be high. 67% of respondents indicated that the staff are HAPPY with the OVERALL OPERATION. According to the results the staff is least happy with the HOURS OF OPERATION as indicated by 21% of respondents.
Overall the BODs, Developers, Management Companies and/or Owners are SATISFIED to HAPPY. 19% of respondents indicated that the governing bodies are UNHAPPY with REVENUES.
Did the changes made to your operation result in the expected outcome? Yes No
As a result of changes made what is your operation's average monthly savings? • $5K • $25,000 • $12 to $15,000 per month.,
mostly labor • 21% • $100K • 15%
Comments on the expected outcome The changes are allowing the Club to achieve this years budget, which was aggressive We do not open until May 1st so lots of these I can not answer Trying to save our way into profit. We have saved significantly in labor and expenses verses 2008 Dues revenue lower than projected, but all other areas on budget. not sure yet To date we have been pleased with our members on-going commitment to the Club. The staff has rallied in support of our decision-making as we have gone to great lengths to keep them abreast of the situation Labor costs has been reduced We projected increased revenue with a lower percentage of labor to revenue. All this occurred with enhanced profitability, staff made money and members were pleased. $600,000 reduction in operating expenses. increase in member value. no dues increase or assessments for 2009. Uncertain
Knowing what you know would you make the same decisions? Yes 93% No 7%
Please comment on your decisions No, I think we should have lowered prices, focused more on value, had more soft dollar events and worked on satisfaction vs. profit. We continue to make decisions and modify our thinking and approach. We are a seasonal operation and it allows us to pause and redesign our thinking and our approach seasonally. this is a big advantage for us at this time. We were over staffed in management and some line staff we are working more effectively
Please identify current trends that you have seen in your operation
Catered event/function requests 50%
Social entertaining 29%
Participation in family activities 38%
Participation in adult activities 0%
Participation in children's activities 17%
Spa usage 36%
Guest rounds 25%
Golf rounds 62%
Formal dining covers 47%
Casual dining covers 40%
Dining room check average 0%
What is your best advice to BOD, management companies, owners, and managers during this difficult economic time? •
Outsource to save payroll(and related) if possible; put more eﬀort, money and personnel into sales eﬀorts; get as many members as possible involved in the process of deciding what changes are to be made.
Can't say....we are not open yet....though parties look good for the season
Pay close attention to segments of business that are oﬀered based on expedience verses eﬃciency so you can make adjustments. focus on oﬀering what the patrons believe is most important and look to eliminate expenses on items that do not create enhanced value or perception
Keep member satisfaction up and show added value whenever possible.
Stay the course and continue to provide consistent service and food
Make sure that each member receives your best eﬀort each time they are at the club to keep them from thinking that it is not worth the price to belong
Each story line is unique and personal. this is the time when transparency, genuineness and on‐going communication is absolutely critical. be careful not to compromise the future with today's decision making. take care of the member and the employee for they are where the future lies. remain consistent and fair in all decision‐making!
Drive value, introduce a business plan verses a budget, teach department heads about running a business, communicate to your membership on what your doing. Keep member satisfaction up and show added value whenever possible.
Don’t give the impression or action of cutting back without dues reduction
Be creative in developing revenue enhancement. keep the front line staﬀ involved and engaged in revenue enhancing ideas as well as constantly looking for ways to save money. we ask "is this purchase really necessary to enhance the member enjoyment?" "is this a must have or a want?" this has worked well for us.
Come up with creative dues payment plans that will enable members on the edge to continue their membership in your club
We are in the most unique economic times since the great depression and drastic changes create more confusion. the reality is we are all diving into shallow water.
SUMMARY Demographic Summary: Majority of respondents are general managers from private country clubs (62%), while there were also respondents from yacht clubs, city clubs, and luxury hotels/resorts (1% each category). Forty-two percent (42%) of respondents have dues over $600 per month; Forty-seven percent (47%) of respondents have monthly dues less than $400. The remainder of the respondents’ dues was $401 $599 (11%). There was a strong number of respondents from the west (44%); however, there were also good amounts of managers throughout the country who responded: Southeast 11%, Midwest 11%, Southwest 28%, International 6%. Forty-three percent (43%) of the Clubs have a board of directors; nineteen percent (19%) have a management company; twenty-nine percent (29%) are developer or privately owned and 10% reported themselves as ‘other’. Seventy percent (70%) of respondents reported having a food and beverage minimum. Eighty-five percent (85%) of respondents have golf courses; 18 holes. All respondents have multiple amenities:
Spa/fitness facilities 63% Tennis courts 58% Children’s center/programming 21% Sports Courts 16% Outdoor Recreation 37% Equestrian Facility 11% Banquet/Meeting Services 79% Other (restaurants, bars, other) 26%
46-55 is the average age of 53% of the respondents’ clubs; 56-65 was the next average age group (21%) with 11% reporting an average age of 36-45.
SUMMARY CONT. Operational Changes: 89% have made changes to the operation due to the economic climate. 58% directed the changes as managers; 42% had changed dictated to them by owners or BOD. Percentage of respondents reported the following as top areas dictated by owners or BOD for their operation:
Cut operating expenses by a percentage or dollar amount (78% of respondents) 67% of respondents made line item cuts in expenses by percentage or dollar; (i.e. cut cleaning supplies by 3%) 67% also reported position eliminations 56% of respondents restructured their operation 44% eliminated complimentary meals/items/events 44% also cut labor by a set percentage or dollar amount
Of those managers who made the decisions on their own, the following were reported:
67% implemented programs to drive revenues 60% cut operating expenses by percentage or dollar amount 40% restructured operations 40% eliminated positions 33% changed vendors or supplies 33% made line items cuts by percentage or dollar
SUMMARY CONT. Communication: 78% of respondents communicated the changes to their members. 64% used email as the mode of communication; while 36% used a website posting and 29% sent a formal letter. Others used print media and messages in member statements. Member Satisfaction: 69% of respondents reported that the members were happy with the overall changes. Interestingly, many made changes to their menus and programming as part of their operational changes and reported their members as being either indifferent (25%) or happy (67%) with the changes. 50% reported the members were indifferent to the staffing changes made and 33% reported the members were happy about the staffing changes. Employee Satisfaction: 67% reported their employees being satisfied with the overall changes. Note: less than 30% of the respondents reported mass layoffs as a change made to the operation, while almost all reported some change in management structure or positions. Outcome: 85% reported results as expected to their operation due to the changes made. 93% reported that knowing what they know now, they would still make the same decisions.
SUMMARY CONT. Current trends: Dining room check averages are unchanged (33%) or decreasing (40%). All restaurant covers are slightly down with the largest change seen in formal dining (62%). Golf rounds are flat or slightly higher, and guest rounds have remain unchanged (55%) or decreased slightly (36%). Spa usage remains unchanged (67%) or increasing (17%).
Children’s activities remain unchanged (67%); while many reported an increase in family usage at the clubs (36%). Social entertaining is declining (50%), as are catered events (60%). However, one respondent did note they have hired a catering person in an effort to drive revenues. This respondent is located in a strong event region of the country
operations management \ strategic planning \ executive recruiting \ crisis management \ training
Recession Proof Decision Making