Digital Discussions

Josh LeMaster, Chief Operating Officer of Signature Group in Ponte Vedra Beach, Fla., posed this question to the group:

Knowing that Lifetime Memberships will result in a member’s dues stream coming out of the monthly cash flow, what are the group’s positive and negative
comments on using Lifetime Memberships to fund
long-term capital projects?

“Our club sold 8 lifetime memberships (out of a maximum of 10) last year to help jump-start a course renovation plan. We had two categories, under 50 and 50+ years of age. We priced the products to be about a 10- to 12-year payback on the dues.
It definitely helped us get the improvements started, but losing the $6k in dues a year forever needs to be factored in.
I wouldn’t recommend lifetime memberships for every club, but the funds raised helped put us in a much better competitive position. We invested over $2M into our main asset during the worst economic environment in 70 years, and only had to take on $600k in debt and assess our members $338k.
A larger assessment and increased dues/cap fund would have likely caused infrequent users of the club to leave. As a golf-only club, we needed to bring the course up to 21st-century expectations, and this was the best option we had.
Ask me again in five years, and I may have a different         opinion.”
—John Sobecki, General Manager/COO,
Sewickley (Pa.) Heights Golf Club

“It’s a Siren’s song, a quick-fix narcotic for many. If capital funds are lacking, which this illustrates, will there be an onset of new-member capital and dues operating dollars, to more than supplant those which have been absorbed via your kind offer?”
—Gerard F. Hurley, President, Association Executive
Resources Group, Gaithersburg, Md.

“I’m not in favor of lifetime memberships—there are other and better ways to fund long-term capital projects, providing of course that your club and its members have a true club mentality and are supportive of your plans.
I recall a study where an athletic club charged dues five years in advance and got into trouble—because when members pay dues for that many years in advance, every time they use the club they ask if the club is still providing the benefits they have paid for in advance, and become much more critical.”
—Werner Jayson, CEO,
Asia Pacific Leisure Group Ltd., Guangzhou City, China