Finding new ways to hold the line on labor, supplies, building costs and other operating expenses has become especially critical during challenging times.
The old “80-20 rule” has confronted club and resort managers and department heads in a new way this year. Where in the past it might have applied to the 20% of members, guests or staff who create issues that occupy 80% of managers’ time, it’s now become a much more fiscally oriented formula.
The generally accepted impact of the economic slump on business throughout the club and resort industry has been that revenues, on average, have fallen off about 20%. And that’s put pressure on managers at all properties to operate with budgets that need to be only 80% of what they’ve been in the past.
Or in some cases, even less. “Whatever percentage your revenues are falling off, you have to find ways to reduce expenses by at least that much, and preferably more,” says one club manager in outlining his current strategy for survival.
Properties that have been especially diligent about finding new ways to button down their operations during the downturn—be it through tighter labor scheduling, reductions in materials and supplies, better use of technology, or many other available avenues—have positioned themselves to be more efficient, productive and profitable when prosperous times return. |
The good news is, the falloff in business has shined a bright new spotlight on the value of sound facility management practices and tighter operations through every part of a property. And most managers have found that if they search hard and wide enough, they can find savings in a variety of areas that can collectively add up to enough to help them make it through the downturn without sacrificing quality or service.
Even better, properties that have been especially diligent about finding new ways to button things down are positioning themselves to be much more efficient, productive—and profitable—when more prosperous times return.
C&RB Special Report
“FACILITIES THAT WORK: Making Clubs Work Smarter,” is the third part of a special four-part “Industry in Transition” series being presented by C&RB in 2009.Part One, “GoLF’S FUTURE: How Clubs Can Help Save the Game,” appeared in the January 2009 issue; it highlighted the approaches that all club and resort properties should now take to reverse the trend of declining rounds and not only get more people out to play more golf, but to enjoy it more when they do. Part Two, “FAMILY VALUES: How They Hold the Key to Future Success,” appeared in the May 2009 issue, and provided insights into what’s needed for a property to “walk the talk” of “family-friendliness” by offering real, enduring and across-the-board appeal to members and guests of all ages and interests. The final part of the series, In Part Four of the Industry in Transition series, we’ll highlight some “all-star teams” of talented innovators from a variety of properties who personify what it takes to lead and succeed in today’s—and tomorrow’s—club and resort |
“This certainly hasn’t been a fun time in terms of what we’ve seen in the way of declining membership and [falloffs] in other activities,” says a general manager at a private club. “But I do have to admit it’s had some value in making all of us learn to be even better managers, because of how we’ve been forced to once again sharpen our pencils and learn to do even more with less. And it’s always interesting to see how, even if you think you’ve run things really tightly before, that there are always new things you can find, and can do, to improve. ”
Three-Step Program
Target areas for finding savings and new efficiencies, club managers report, take three general forms:
• People (labor allocation and scheduling);
• Places, Projects and Programs (focusing on overall facilities management, and pursuing initiatives in areas such as energy or water conservation and “green” practices); and
• Prices and Costs (finding ways to save and cut back on needed materials and supplies).
The approaches that can be used where people are concerned will carry the promise of the biggest and most immediate payoffs; after all, when the cost of personnel is computed on a per-square-foot basis for any facility, it always dwarfs the same measure for utilities or supplies, usually by at least a factor of 10. But labor-targeted cost-reduction tactics can also be the stickiest, in terms of their potentially negative repercussions.
“I simply told everyone on my staff, you have to make do with two fewer people in your department, and you have to eliminate overtime,” is how one general manager describes a directive that was typical of those issued at properties throughout the industry this year. “While we of course had to end up bending on that, starting out that way was the only way we could begin to get costs under control, with what we were looking at [in reduced revenues]. But it’s not something you can rely on for the long-term—eventually you’ll burn out your best people and service will start to suffer.”
So while zeroing in on the labor component is essential to putting a big initial dent in the “20% goal,” it can’t be relied on to do the job by itself; cutting back on people needs must be coupled with aggressive expense-reduction pursuits in all other facets of property management.
In a submission to the Idea Fair at this year’s Golf Industry Show, Congressional Country Club of Bethesda, Md. described its efforts to get serious about making lasting reductions in energy use throughout its property. “One of the largest club expenses other than labor is energy, and with economists predicting electrical costs to increase 20-plus percent over the next three years, we needed an energy conservation plan, fast,” Congressional’s management team reported.
To begin to put that plan together, the club hired an outside firm to conduct a full energy audit. Congressional’s electric bills were not itemized to help determine how much power was being drawn by each of the five primary energy-use categories on the property (lighting, refrigeration, air conditioning, “resistive” equipment such as heaters that require controls, and other electrically powered equipment). So the first step in the process was to conduct a physical survey that yielded precise measures, based on wattage load during operation and average use per day, of the average annual kilowatt-hour use and cost that was being incurred in each category.
This inventory of electrical loads was then used to create a plan for integrating systems that would improve power distribution efficiency throughout Congressional’s facilities. The new plan projected a reduction in overall power consumption on the property of just under 13%—equating to annual savings of $87,000.
All-Out Wars on Waste
The side benefit of an effort like Congressional’s is the favorable story it can also tell about what a club is doing to be a better environmental steward. These dual payoffs of conservation and cost reductions can be realized when starting from the “green” end, too. While “green” initiatives aren’t guaranteed to yield savings, and in many cases can actually generate a significant set of new costs, when they are pursued with full vigor the financially “green” results can be quite pleasing, too.
One of the more striking examples of how environmental fervor can also produce substantial savings comes from Vermont’s Stowe Mountain Resort (“A Place for All Seasons, C&RB, February 2009). As it built not only a new lodge and other amenities for the resort, but also residential units as part of the long-range growth plan, ownership and management knew it was critical to be positioned as responsible developers and environmental leaders in an especially environmentally conscious region (Vermont is, after all, known as the Green Mountain State).
To that end, the property’s Landscape Manager, Andre Blais, was given the charge of instituting a waste-stream management program for the resort and extending its reach as fully and as far as possible.
At the beginning of this year, Blais reported that those efforts had already resulted in Stowe Mountain being able to document a “landfill diversion rate” of 84.5%—meaning that only a little more than 15% of all waste materials generated on the property was now being hauled away. Reuse and recycling was now the rule within every part of the resort’s operation, he said, with the food and beverage team becoming the “true superstars” by finding ways to eliminate or reuse, through composting and other efforts, 99% of that department’s waste material that would otherwise have to be hauled away.
“The average [diversion rate] for the state of Vermont is 30%, and nationwide it’s closer to 25%,” Blais said. But, he quickly added, no one at the resort was planning to stop at what they’d already achieved. And the motivation to get as close as possible to 100%, he added, was not just to make sure Stowe Mountain doesn’t contribute to the creation of any new landfill bumps that would clutter Vermont’s natural terrain.
“It costs between $80 and $90 a ton to have anything hauled from the property,” Blais noted. “The remaining [15.5%] still adds up to significant tonnage, so we are now focusing on it. It’s not as easy to capture, but we’ll get it.”
Stowe Mountain Resort’s efforts to slash its waste stream—and related costs—has yielded a “landfill diversion rate” of over three times the national average; its F&B team has led the way by eliminating or reusing all but one percent of what would otherwise be hauled away. |
Gaining Ground
At clubs and resorts of all sizes and types throughout the country, renewed efforts like these that are being made to rethink every aspect of how a property operates are producing similar success stories and helping to soothe the sting of a challenging economic period. Believe it or not, in fact, there are cases that can actually be found of how sound facility management practices have made it possible for clubs to continue to grow during one of the most trying years in memory for the club business.
At Town & Country Club in Saint Paul, Minn., the progress of a long-range master property improvement and expansion plan that began three years ago with the opening of a new pool complex (C&RB, August 2006) continued this year with the completion of a state-of-the-art, 18,500-sq. ft., $2.7 million course maintenance facility (details on the project will be presented in a future issue of C&RB). The club also added an impressive new on-course restroom facility, using its own grounds crew to help hold down construction costs and including room for an ice machine that is now used to more efficiently restock on-course coolers.
Capital spending didn’t come to a screeching halt at Town & Country this year because the club’s management team, led by General Manager Vince Tracy and Turfgrass Director Bill Larson, kept finding new ways to reduce expenses and keep costs under control without adversely affecting operations or service to the membership. Momentum was sustained by combining of a lot of “little things” (see “It’s Amazing What You Can Find”) with hard reassessments of all materials needs (including switching from long-standing suppliers who couldn’t meet new pricing requirements) and drawing on the team’s characteristic resourcefulness (this is the same club that stocked its pool with fish to turn the routine of an end-of-season closing into a popular money-making event—see “Scaling New Heights,” C&RB, April 2008).
This year, that inventiveness has led, among other things, to creating revenue-generating opportunities for the new maintenance facility by renting out its meeting room (which is equipped with a smartboard) for events. In addition, much of what was excavated for the new buildings was recycled to create new landscaping features throughout Town & Country’s 116-year-old golf course and property.
Timely Council
The timing was coincidental, the founders say, as discussions about creating a new organization dedicated to facility management issues related specifically to club properties had been in the works for several years. But given the need created by the economic downturn to revisit all aspects of property operations, there couldn’t have been a better year for the new City & Country Clubs Council of the International Facilities Management Association (IFMA) to make its debut.The group convened for its first meeting earlier this year at the Farmington Country Club in Charlottesville, Va. Presentations were given on Sustainable Facility Management, Cost Reductions/Operational Efficiencies, Alternative Energy Solutions, Safety/Emergency Preparedness, and Professional Development for the Facilities Professionals. Attendees also toured Farmington CC, a property well-known within the industry for finding inventive and resourceful ideas and solutions to common operating challenges. In all, 12 clubs were represented at the first meeting, and the Council has since grown to 29 members. Steven Ballard, Project Manager at The Country Club in Chestnut Hill, Mass., is serving as the Council’s first President, with Wilfredo Arce of Chevy Chase (Md.) Club and James Houpt of Rolling Rock Club in Ligonier, Pa. also serving on the initial Executive Board. Membership in the Council is open to resorts and for-profit properties as well as private clubs, Ballard says. The Council will next convene at a meeting that will be part of IFMA’s World Workplace 2009 Conference & Expo in Orlando, October 7-9. The next separate Council meeting is tentatively scheduled for March 2010 at the Wilmington (Del.) Country Club. For more information on the Council, visit www.ifma-clubs.org |
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