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“Don’t call them seniors. “Don’t call them matures. “And above all, don’t call them old!” That’s the declaration from Dr. Bonnie Knutson. “In this case, the ‘them’ are your members who are among those who start hitting the big 60 this year. They join President George W. Bush and First Lady Laura Bush, former President Bill Clinton, Cher, Jimmy Buffett, Connie Chung, Ben Vereen, Sally Field, Linda Ronstadt, Pat Sajak, and Sylvester “Rocky” Stallone in celebrating this milestone birthday. “They are also the leading edge of the 78 million in the Baby Boomer generation,” exclaims Knutson, professor in the School of Hospitality Business, Broad College of Business, Michigan State University Unquestionably, the Boomers are going to impact the private club industry. “While the average age of private club members has dropped over the past decade, it is still about 53 years of age (excluding some of the clubs in the Sunbelt retirement areas that have older averages),” she added. “And while many clubs struggle with trying to balance the needs of younger and older members, the basic fact is that the bulk of club membership is comprised of Boomers. In other words, while every board must think about every member when making decisions about the direction of their clubs, the driving force in club membership for the foreseeable future will be the Boomer generation. As the old axiom states: Ya dance with the one that brung ya!” So look into the crystal ball? What will the private club be in five years…in 10 years? Who will be members? What amenities will clubs offer? Will they be tradition-based? And just as important, who decides? The private club industry has encountered many and significant challenges in recent years, some of which are viewed as threats to a valued traditional way of life. Some certainly can be viewed as opportunities. The effects have been many and varied…the fluctuating economy, 9/11, the rise of competing interests, including daily fee golf clubs, and the fact that because so many people simply live very busy lives, there just isn’t time for everything. And of course, there are the demographics of private clubs – country clubs, city clubs, yacht clubs, golf clubs or other specialty clubs. Changing demographics, which will continue to change. It’s been on the horizon for years. However, the average age is considerably lower than 10 years ago. So what do the changing demographics mean for private clubs? What challenges does this put on the plates of industry leaders, and club leaders, both volunteer and paid management. What will they do about it? First of all, it’s important that private clubs and their leaders acknowledge the challenge so they can prepare to do something about it. “Several things are taking place,” suggests Tarun Kapoor, managing director and CEO of Kapoor and Kapoor Hospitality Consultants, Inc. of Pomona, CA. “Since members are getting younger so are their families and as a result the needs of and from the club are changing. There is a greater need for family centric clubs. “The club is the new neighborhood. It’s replacing the residential cul de sac as the safe playground for school kids. Families in metropolitan market places are reluctant to let their kids play outside. “Younger families are pressed for time. With all the activities their children are involved in, time for the adults to play at the club is limited. “Clubs,” Kapoor opines, “should realize that discretionary time is almost more important than money. And today’s families spend a lot more time together as a unit.” Clubs must understand and confront these facts when considering the future. It’s important to know your demographics because “being able to identify a club’s individual market is a key to growing and sustaining memberships,” commented Robert A Yaggi, CCM, and general manager of Bel-Wood Country Club in Morrow, OH. “Few clubs are fortunate enough not to have to aggressively solicit members. Those who do need to be aware of what the next generation of members is expecting a private club to provide.” For example: What are the challenges facing clubs when the average age of a board member is older than the average age of members? Being current and being emphatic, Yaggi argues. “Listening to my grandson explain downloading his I-Pod while I was wondering what happened to my Duran Duran albums. It’s critical to keep these board members current and up to date so that their thought process is ‘today’ as opposed to 25 years ago. “These board members must be convinced that the future of their club lies in the attraction of the next generation. This attraction no doubt will be in services and activities that formally were not needed or offered by their club.” Kapoor agrees. These kinds of age-based challenges “create need-based conflict. Older members want the traditional clubs and younger members want the family club, the casual club.” John Bryan, vice president, marketing and business development for U.S. Kids Golf contends that as “in any business, knowing your customers, and their needs are key to providing the products and services they desire. As changes occur in demographics, the club must modify its offerings to meet members’ needs. “Older members are less inclined to want to invest in capital improvements as their ‘window’ as an active club member can be much shorter than a younger member. It’s important for the club’s leadership to adopt a long-term, strategic plan to ensure that it is able to meet future needs.” Ryan Yakel, AIA, executive vice president and CEO of the architectural firm, Chris Consultants Inc. (CCI) of Irving, Texas, contends there are other reasons influencing the drop in the average age of club members. “Two factors have influenced the average age of members over the last 10 years. The first is the ‘Tiger Woods Phenomenon,’ which introduced younger prospective members to the game of golf and club life and the second is the emergence of the Baby Boomer generation out of their 40’s and into their 50’s to 60’s. Of course a third element is the nation’s good economy over the last 10 years – if you discount the post 9/11 slump. Good economic times mean more discernible income to be spread around on recreational activities,” he added. And tomorrow’s older Boomers will not be the same as yesterday’s older members, Knutson contends. “They will have different needs and different wants. They will not be content to ride into their retirement on a rocking chair or a golf cart as their parents might have done. As children, Boomers grew up questioning authority, reworking politics, family values, and cultural expectations. The same is true now as they begin thinking about how they will spend their coming years. “Boomers are characterized by individuality,” Knutson exclaimed. “They celebrate youth, are idealistic, and see worth defined by external goods. For them the future is now. (In fact, more Boomers believe in UFOs that in Social Security!) “They work hard; they play hard; they believe that rewards are deserved. And, predictably, Boomers, all the way from the leading edge to the trailers, reject the notion of a Boomer label. As one Boomer club member recently quipped to me, ‘I don’t feel like I’m part of some demographic ocean wave.’ It’s not surprising, then, that actual members of this demographic group, which has always done things its own way, refuses to be defined by it.” All the same, labels or not, the Boomers will be major part of the demographic ocean wave sweeping through the private club industry. Frank Vain, president, McMahon Group, Inc., the St. Louis, MO-based consulting firm, thinks this just might be a harbinger of opportunity for private clubs. “We have likely reached the bottom of the decline in the age of club members,” he predicted. “This will begin to go back up now that the mid-point of the Baby Boom generation is passing age 50. The number of people in the Gen X generation – sandwiched between the Boomers (currently ages 42 to 60) and their children, Echo Boomers – is about half the size of the Baby Boom generation. “Therefore, the average age of the membership has to go up over the course of the next decade. Just because the average age is going up, however, does not mean clubs are going to get ‘older’ in style or taste. While the Boomers are increased in age, they are getting “old” later than their parents did,” Vain suggested. Club Trends 2006 and Beyond: The Age Wave “The oldest Baby Boomers will turn 60 this year. While that may be a bit of a personal crisis for them, this could be a harbinger of opportunity for private clubs,” Vain contends. “Over the past decade most private clubs have been struggling to balance the desires of the pre-World War II generation members with those of the up and coming Baby Boomers. “Over the next several years the Boomers will move from the ranks of the new and younger members to become the bulk of the membership in most clubs. With the typical age profile at country clubs (see chart), about one-half of a club’s membership typically will be between ages 46 and 65, which is roughly the age of the Boomer generation,” Vain suggested. Typical Percentage of Members by Age Category Percent of Members Under 45 24% 46 to 65 49% 66 and Over 26% Ryan Yakel also reminds us that “one major importance when looking at the club’s demographics is to look at who is using the club’s facilities and who is spending money at the club – these are not always interchangeable. “Many times the most frequent people who use the facilities are the older members who are retired and play three to four rounds a week. Typically they may be paying reduced dues because of their senior status and they are not entertaining business clients or hosting their daughter’s wedding at the club – this comes from the mid-range age members, who play less golf but utilize the club more for business or family needs. “Typically, when we design capital improvement programs,” Yakel explained, “we remind the boards that a membership’s reluctance to pay capital dues or assessments is much like a bell curve with younger members – who have their initiation fee to pay, home mortgages, cars, kids in school, etc., - more reluctant to pay. “The mid-range age members are more likely to be comfortable paying since they utilize the club, children are out of college, businesses are established and doing well, and they will see the benefits of a capital improvement plan during their remaining 20-30 years at the club. “Older members are the most reluctant since they tend to be on fixed incomes and feel they have already paid their way and don’t expect to utilize the club for a long time to come. We cater our capital improvement plans to fit each group with assessments broken into, say five smaller payments over five years, which equals the full assessment (younger members) or one time payments (mid-range members) or a capital dues hit monthly, which drops when they leave the club (older members). “This has been very successful over the years in obtaining positive votes for our building improvement programs from each age group,” Yakel commented. The CCI vice president, also suggests the board membership his company encounters typically reflects the membership make-up of the club – mid-range members and older members. “This is helpful in order for the board to make decisions, which reflect the needs of the membership as a whole,” Yakel explained. “When a board is comprised of primarily older members – their decisions tend to be more conservative in nature. They need guidance from club managers or consultants to voice the opinions of the younger members and their needs. However, some of my best boards have been comprised of forward thinking older members – you need to remember, there is a wealth of knowledge in the older members. They have already made the mistakes that might be ‘lying in the future.’ It is always great to know what works or did not work in the past and why.” Publisher’s Final Thoughts No question, the private club industry is facing the much-anticipated aging of the Boomer generation, the largest single segment of people (78 million) in our history. So how do private clubs meet the demands of the Boomer generation, and a fluctuating marketplace? What do members really want…and who decides? Stay tuned, we’ll have some answers in Part II. BR John G. Fornaro, publisher If you have questions or comments, John can be reached at: johnf@apcd.com |