While the focus of clubs has always been on members, many functioned using outside events to subsidize operations. COVID forced clubs to be more member-centric, as private events and large gatherings were canceled. Even though many clubs lost significant revenue from the lack of banquets and private events in 2020 and 2021, the silver lining was clubs discovered that the key to success is a member-centric experience and member-centric budget. In other words, they found other ways to support club operations without outside events. Today many clubs have transitioned to a new model where they do not hold private events, or hold very few.
According to the Club Leadership Alliance, clubs thriving today reset their financial model by stepping away from outside banquets and golf events and no longer need revenues from those sources to balance their budgets. “If you must have outside events to make your budget work, it could mean that your members are allowing their dues to be subsidized by outside events (nonmembers). As stewards of the club, you must build a member-centric financial model that ensures dues cover your cost of operations. It’s the only way to be sustainable,” Tom Wallace, a partner in the Club Leadership Alliance, explained.
Should clubs start turning down all private events? Well, not exactly. The alliance agrees that hosting certain milestone events for members (such as a wedding for a member’s child or member’s funeral reception) should remain an active part of a club’s operating plan as private parties play an important social role and are a significant member benefit. “We recognize that clubs might not be able to cut events out overnight. But the key is to not make events a commercial venture where the club is chasing events to generate revenue to subsidize the membership experience.” Frank Vain of the Club Leadership Alliance concluded.
Private Club Advisor – May 2022