Despite what you may have read in the media about the national and local area golf industry over the past few years, northern Nevada’s Somersett Golf & Country Club is one of the few in the country that banded together its members, management and local community to create a win-win-win scenario for everyone involved.
Here is our first-hand account:
Somersett Golf & Country Club became an equity/member-owned club in October 2010 when developer Somersett Development handed the club over to the members with no debt. At that point the members were very excited about the future and potential for growth at the club. However, after six months of operations it was clear that the operation was burning through cash. The club’s board and management team were faced with the challenge of decreasing expenses while increasing membership levels and cash flow. Our solution was a three-pronged approach: streamline the expense line, work together with the homeowners to drive resident participation and support and re-structure the current membership offerings to significantly increase enrollments.
Streamlining the expense line was fairly straightforward. We cut anything that was not absolutely necessary or that didn’t generate a return on investment. In fact the biggest cut to the expense line was to cut the general manager position and rely on the management team and board of directors to handle the majority of the general manager duties. Both management and the board responded diligently. For example, Somersett Superintendent Robert DiPietro had his expense and staffing levels cut and continued to provide and exceptional golf course experience. On the board side, many members stepped up and participated in the process including former Club President Rich Oster who took the reins and jumped in as interim general manager.
But, as any business owner knows, we could not cut our way to viability. We needed to increase both our short- and long-term cash flow projections. To cover the short-term challenge, we met with the board and management of the Somersett Owners Association to create an agreement that would increase the amenities at the club for both residents and members as well as generate cash for the club. As part of the agreement the club allowed the residents limited access to the championship 18-hole golf course, built an additional pad for the residents on the driving range, added a new kitchen and residents-and-members-only restaurant, added a fishing pond and two bocce ball courts and have additional amenities planned in the future. In return, the Somersett Owners Association committed to a certain level of financial commitment to cover the cost of these amenities without raising the level of monthly dues to the residents. The result has been a win-win with both the members and residents having additional amenities and enjoyment in their own community and the club increasing its cash flow.
In reviewing our business plan, however, we club knew that our long-term success depended on significant membership growth. The vision of where the club needed to be was clear but the path to get there was still blurred. How could we generate enough members in one of the most economically battered regions in the country without taking advantage of our current membership?
The solution to this challenge derived from the equity members and management team working together to communicate a clear vision of success to both the existing members and the local area golf market. Currently, equity members pay approximately $400 a month in dues and, in turn, retain all voting rights, have two-week advance tee time access, and special events hosted just for equity members throughout the year. However, to generate the high velocity of enrollments needed to achieve its long-term goals, the club offers memberships at both a $300-a-month and $200-a-month dues level. These lower price-point memberships still retain “family” membership aspect but come with fewer privileges than the equity membership such as reduced access to the tee-sheet and to events at the club. The end result of this project has been tremendous success with minimal attrition in the equity membership category and strong interest locally as the club has enrolled over 180 new golf members in the past 16 months.
In a region and industry fraught with major challenges over the past five years, we believe Somersett Golf & Country Club is a working example for any business leader to follow. Whereas, other clubs and businesses have failed around the country due to their inability to evolve, our successes have been attained through clear communication and creative problem solving between ownership, management, current customers and potential customers. The end result: a thriving equity golf club in northern Nevada whose members, management and local area residents are all excited about its future.
Pat Gaskill is the club president and Greg Raleigh is the membership director at Somersett Golf & Country Club. Contact them at 775-787-1800, extension 710.
