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June 2020 Industry Report

As we all know, private golf clubs and golf resorts took a financial hit in late March.

According to Club Benchmarking, during the month of March, non-dues revenue dropped at private clubs from $96.5 million to $62.6 million – or a 34 percent drop. The month wasn’t evenly weighted. The first two weeks of March were strong before the “floor fell out.”

Interestingly, dues revenue increased 3.7 percent year over year. The median initiation fee (in 2019) was $35,500 to join a private golf club and 24 percent of clubs had a wait list while an equal 24 percent had a sell list.

The total annual cost of belonging to a “typical” private golf club last year was $11,793.

Words of wisdom

I thought these three business tips from Warren Buffett ring true more than ever:

(1) Hire women – “Diverse perspectives are valuable in changing times.”

(2) Delight your customers – “If you’ve been treated well and honestly, if you’ve been delighted by the person you’re doing business with, you’re going to return to that person. You also have to treat the people who work with you well, because they’re your intermediaries many times to that customer. You want them to feel that same way.”

(3) Have some fun – “Find your passion. Find the job that you would hold if you didn’t need to have a job, so that every day is fun. Because if you’re having as much fun as I’m having at 89, and I hope you do, there’s nothing like it.”

Threading the needle

As America reopens, we face challenges of educating customers on new cleaning requirements without adding angst.

I would like to share an example of what I’ve experienced at two of our local grocery stores in Southern California – Ralphs (mid-priced) and Gelson’s (high-end).

Both stores have implemented similar mitigations efforts we are all familiar with: masks, gloves, social distancing, and protective plexiglass cashier barriers.

How do they differ? While both sanitize grocery carts, they do so in very different ways.

Ralphs collects carts in the parking lot and before pushing the “conga line” of carts back to the store, they hose them down in the parking lot with sanitizer.

Gelson’s process is different. The carts are lined up by the front entranceway, but aren’t accessible. As you enter the front door, a store attendant sprays down the cart in front of you. You are able to see firsthand the cleaning job.

My guess is labor/cost between the two differing systems is similar.

Yet, I can’t help but think Gelson’s has a much better system. It gives you peace of mind that the cart is clean and ready to go. Where at Ralphs, it’s easy to be uncertain if it received a thorough cleaning or was cleaned at all!

The lesson learned? As you analyze changes to your operations, remember there are multiple ways to attack issues. I believe any system that allows a member/guest to SEE the process, versus being TOLD about behind-the-scene changes, is best. When you SEE with your own eyes a surface has been sanitized, you likely feel much more comfortable than being TOLD it was “deep cleaned” by a third party.

Marketing in the Covid-19 world

As we confront marketing in the “new world,” here are thoughts to consider:

(1) Staying sensitive: COVID-19 has impacted individuals on a personal level world-wide, so the risk of inadvertently coming off as insensitive or even exploitative is higher than ever right now. With social media communication at a peak, one small mistake could mean far-reaching and long-term consequences for you.

(2) Better too serious than sorry: While it’s normally common and effective for brands to keep a conversational tone, it’s best to steer clear of using humor or wit to accomplish now. Even being overly casual can be off-putting. Your content may not be as colorful or aligned with your brand personality, but it’s far better to be more serious than you want to be than to be more sorry than you can express. Keep a positive, inspirational, and helpful tone. Avoid being humorous, witty, or casual.

(3) Ease up on urgency: “Call now” or “book now” buttons on social media are fine; but excitement or scarcity driven copywriting, like “don’t miss out” or “grab your spot before it’s too late” is not going to resonate with consumers or businesses. Nothing is as urgent as COVID-19, and this type of tone is more likely to cause you to come off as unaware or ignorant.

(4) There’s a right way to make light of the situation: Being more serious doesn’t mean somber. You can still stress the bright side; just know the difference between positivity and humor, and between being uplifting vs dismissive of the situation.

(5) Check for insensitive words: You know not to use overt puns, but keep in mind that there are several words and phrases that prior to COVID-19 were completely harmless. For example: “killer deals” or “laughter that’s infectious.”

(6) Employ proper grammar: Your marketing team may have been reduced. Checking for grammar is a no-brainer when it comes to copywriting, but it’s especially important when it comes to COVID-19. Improper grammar can undermine the validity of your facts, and even alter your message. For example, “the governor put a shelter in place for the city” actually means a shelter was put into place and even implies a gathering. Small details matter.

Operational tip of the month

Most private clubs and resorts have a manned gatehouse – usually with two entry lanes: (1) the “outside” lane is for residents and guests with placards/transponders and (2) the “inside” lane is for vendors and first time guests who must have their ID checked. Consider having your gate staff check IDs and take the temperature (with an external forehead thermometer) of all vendors and new guests. This provides some peace of mind for others already on property that the community/resort has added an extra layer of vigilance without requiring regular members and guests to have their temperature taken every time they re-enter the property through the “outside” lane. Interestingly, many members are choosing to stop at the “inside” lane and have their temperature taken since it’s so easy and gives them confidence with a quick health checkup.

As golf reopens for business, all of us will be “doing our part” against the virus. Bandon Dunes Golf Resort is again welcoming guests. Their 15-page COVID-19 manual highlights changes—big and small—they are making. Many come with an economic toll on revenue. Since they are considered a posterchild of destination golf with on-site accommodations and restaurants, I thought you would find of interest some changes to their modus operandi…

– Protective shields in golf shop and shuttle buses providing a barrier between staff and guest.

– Guests will handle their own luggage and golf travel bags.

– The resort’s business center, hot tub/sauna, fitness center, massage center, and outdoor fire pits remain temporarily closed.

– Staff will not ride in elevators with guests.

– Guest linen and towels will be delivered and removed from guest rooms in single use sealed bags.

– Standard in-room beverage service has been replaced with poly-wrapped, single-use products.

– Single-use menus offered.

– Self-serve coffee stand will be now attended by staff.

– Retail items purchased from online store can be delivered to guest rooms.

– Pre-bagged scorecard, tees, pencil, and ball marker will be provided.

– Rakes removed from course, flag sticks remain with foam bumpers.

– Before a round, caddie and guest will discuss/agree on handling of golf clubs during the round (will the caddie hand, clean, and replace clubs in the bag or have a no-touch policy).

– All cancellation fees for room and tee time reservations are waived, including group reservations, with arrival before December 31, 2020, provided the resort is notified at least seven days prior to arrival.

In summary, I think the key for success is balance. While you want to promote mitigation efforts, be careful the new experience isn’t so different that patronage drops.

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