When Country Club Close Their Gates: Golf Industry Suffers

by Mr Business Golf on May 12, 2011

Closed It is hard to image what $195 Billion really looks like, but four years ago that was the impact the Golf Industry had on America’s economy.  I am sure it has gone up since.  If you look at the economy as a whole, the Golf Industry impacts is more than the Motion Picture Industry.  That probably is surprising to many people who go to the movies,  but how does Golf impact you and your local economy?

Country Club

The local golf economy is driven mostly by golf facilities..i.e. golf courses, driving ranges.  The places where golfers play golf drive the spending on golf equipment to the retail level.  However, have you ever thought of all the non-golf related industries golfers touch when they go to play golf?

The businesses that facilitate the playing of golf sit in the mainstream of the local golf economy. However, Country Club’s, especially private golf clubs, impact more than just the golf economy.

Country Clubs as a facility also develop into social centers for the communities they reside.  Sometimes this is by design and naturally would have a internal social aspect its members bring to the club.  Fortunately, there is more going on at a private golf clubs and Country Clubs than just people playing golf.  Each day at a Country Club anywhere in the nation there are business meetings, local civic group gatherings and family weddings being conducted.  Sometimes the Country Club’s clubhouse is the only meeting place within the community.  All of these functions generate huge amounts of revenue.

Also, these non-golf external services employee hundreds of people from the community who spend their wages in the community.  The outside events held at country clubs are supported by vendors who employee many people of within a community.  This makes theses non-golf events’ financial impact on the local economy tremendous.

So, when you take the fact country clubs employee hundreds of people and support hundreds of vendors combined with the non-golf functions the country club manage, the impact to the local economy is very significant.

When a Country Club Closes

What happens when a Country Club closes for business?  The local economy will feel the blow first.  In places where the Country Club is a major employer the impact to the community will be devastating.  The trickle down of the unemployment of the club’s staff will add to the already troubled national economy.  Generally the people let go by a country club will be forced into moving to another region which will add burden to that community’s unemployment.

The impact on the vendors of a country club is also great.  Sometimes the country club is some vendor’s main account and when the doors to the country club close so does the vendors.  As a result even more people are placed on the unemployment role.

Millions of economic dollars are lost when a county club closes.  It is estimated a private country club that employees 150 or more employees generates over $1 million in sales taxes and another $1m in income taxes to the federal level.  Taking that there are thousands of private country clubs across the nation this quickly adds up to billions of dollars of economic impact.  Since reports are showing that nearly 10% of these clubs will be forced to close due to economic issues the impact would result in hundreds of millions of dollars lost forever from local sales.

Naturally there are going to be country clubs that fail due to bad management and other non-economic related issue.  However, many country clubs running in the red have ways of avoiding the worst case scenarios.  What causes most golf facilities to fail has to do with their resisting change or trying to adapt to something new using old methods.

Since the golf industry will be one of the last industries to improve when the economy improves they need to move quickly to solving their financial issues.  Some of the solutions to country club’s problems will result in major changes needing to be made and old ways of thinking done away with.  This does not necessarily mean country clubs should run out and hire a young staff to manage their club, but a younger mindset of the current management will be needed to make the changes coming in the economy’s recover.

The Golf Industry should be strapped in tightly since the economy still has a lot more jerky adjustments to make to find its new center.  Having a new way of seeing things will help country clubs survive and keep from closing their gates forever.

Let me know how I can help.

Mr Business Golf

Scot Duke, aka Mr Business Golf Located in Addison, Tx, the capital of North Dallas. CEO/President of Innovative Business Golf Solutions Founder of the: -Business Golf Country Club -Business Golf Advisory Group -ClamBake Cafe Author of: How to Play Business Golf

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