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Recession Proof Decision Making Survey Results

reid
consulting
services,
inc.
 a
new
generation
of
club
management
 www.consultingrcs.com
\ (623) 322-0773
 operations
management
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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?

  Respondent Overview  

 

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


Region

%

Northeast

0

Southeast

11

Midwest

11

Southwest

28

West

44

International

6

Management Type

%

Board of Directors

43

Developer

29

Partnership Private Owner

0

Management Company

19

Other:

10

  Respondent Overview Cont.  

Food & Beverage Minimum   Yes 30%   No 70%

Minimums $150.00

$1100.00

$50.00

$150.00

$185.00

$100.00

 

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?

YES NO

89% 11%


Did you BOD, management company or owner dictate budget cuts? Yes No

42% 58%

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.

Other

0%

Change vendors or suppliers

33%

Reduction in management

33%

Mass layoffs

11% 67%

Eliminate positions to save salary amount Restructure operation

56%

Line item cuts by percentage or dollar

67%

Set operating expense cut by percentage or dollar

78%

Set labor cut by percentage or dollar

44%

Eliminate complimentary items/meals/events

44%

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:

Other

0%

Drive revenues

67% 33%

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

departments aggressively

• 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

27% 13%

Mass layoffs Eliminate positions to save salary amount

40%

Restructure operation

40% 33%

Line item cuts by percentage or dollar

60%

Set operating expense cut by percentage or dollar Set labor cut by percentage or dollar

27% 7%

Eliminate complimentary items/meals/events Change hours of operation

40% 0%

10% 20% 30% 40% 50% 60% 70% 80%


Budget Cuts


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

share.

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?

Yes

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

85% 15%

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


Reflection  

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

60%

13%

27%

Catered event/function requests 50%

29%

21%

Social entertaining 29%

36%

36%

Participation in family activities 38%

23%

38%

Participation in adult activities 0%

25%

75%

Participation in children's activities 17%

17%

67%

Spa usage 36%

9%

55%

Guest rounds 25%

33%

42%

Golf rounds 62%

0%

38%

Formal dining covers 47%

40%

13%

Casual dining covers 40%

27%

33%

Dining room check average 0%

10%

20% Decreased

30%

40%

Increased

50% Unchanged

60%

70%

80%

90%

100%


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


RCS Complete Survey Results  

Recession Proof Decision Making

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