It’s a buyer’s market for golf-club memberships according to a recent report by Peter Corbett of the Arizona Republic.
At most of Scottsdale’s country clubs, a lingering recession has cut the number of new members coming in the front door while financially strapped current members are going out the back door, industry officials say.
And potential new members know they are in the driver’s seat, said Matthew McIntee, a vice president for Crown Golf Properties, which owns and operates Golf Club Scottsdale”There are a lot of bargain hunters,” McIntee said. “People are coming in expecting a pretty deep discount.”
Golf Club Scottsdale is trying the hold the line on its $110,000 membership with $800 monthly dues. But other clubs have slashed membership costs, opened their courses to non-resident play and have otherwise gotten creative to lure golfers with deep pockets in their plaid pants.
Golfers, meanwhile, are trading down from luxury golf to more affordable courses, said Tim Eberlein, director of the Golf Academy of America-Phoenix.
Golf Club Scottsdale, the city’s newest Country Club at 122nd Street and Dynamite Boulevard, is about halfway to its limit of 350 members, McIntee said.
The 5-year-old course, which has no homes surrounding it, has seen its sales slow.
To some extent, that is due to a downturn of people relocating to Scottsdale or buying second homes here, McIntee said.
The Country Club at DC Ranch cut its golf membership last year from $135,000 to $75,000 in the wake of the economic downturn. Monthly dues are $950. Clubhouse memberships start at $5,000.
That price cut helped boost sales to 49 new members in 2009, up from 30 the previous year.
The club saw the biggest dropoff in membership in 2008 when the economy first started to tank, said Melanie Halpert, membership director.
The Country Club at DC Ranch has picked up new members from golfers living outside DC Ranch, she said.
Terravita Golf Club has also added non-resident members, said Steve Mallory, Terravita’s golf director.
Now the club southwest of Scottsdale Road and Carefree Highway is offering one-year trial memberships.
“Like other private clubs we’re being creative to attract new golfers to the industry,” Mallory said.
Terravita’s full membership is $40,000 plus monthly fees of $554. A trial membership is $5,000. That up-front fee is applied to a full membership for those who join within the first year.
Terravita’s members can use their own golf carts, which keeps players’ costs down.
Mallory explained Terravita’s strategy of being the smallest house in a wealthy neighborhood, or in this case, a more affordable country club among some very pricey neighbors.
“When the economy takes a downturn, people are watching their disposable income and a golf club may not be their highest priority,” he said.
Terravita differs from many other clubs in that it is not an equity membership. Some clubs allow members to recoup a percentage of their initiation fee when they choose to leave the club.
“But sometimes that refund doesn’t come to fruition as quickly as the seller would hope,” Mallory said.
Members put their name on an exit list and wait their turn to sell their membership. Sometimes the clubs sell three or four of their memberships for every one membership that an exiting member is allowed to sell.
That can lead to a long wait, especially in a recession.
McIntee of Golf Club Scottsdale said his club’s exit list is not as long as he feared it might be, but added that the economy has steamrolled over some of his members.
“The golf business is in a tough spot now,” McIntee said. “But each segment of the market will survive. The challenge is to be one of the best in your segment.”
With that being said, you can see the struggling economy has affected some of the most wealthest of people, those who can afford a pricy golf club members. Maybe that is why we are seeing more people flock to public courses these days.
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It’s A Good Life!
Stephen & Alice Proski
