A new model that combines golf and fitness memberships at extremely affordable rates is proving to be an especially attractive mix of recreational offers.

Golf, and more recently fitness, are continually championed by country clubs as key components of a great life. So it makes sense that clubs flying the banner of GreatLife Golf & Fitness would be a hit. And when the two amenities are paired for one very affordable price, with no initiation fee, the surprising thing is that the business model hasn’t been tried before—at least to the magnitude that GreatLife CEO Rick Farrant and his team have achieved in such a short period of time.

Throughout 2015, C&RB is presenting a six-part “Growing the Game” series, to highlight successful initiatives for increasing golf participation at club and resort properties through approaches in six key operating and management areas. The first part of the series, “Getting to the Big Leagues,” appeared in the February 2015 issue and focused on how golf participation, rounds and revenues can be increased through a focus on facilities improvements and enhancements. Part two, in this issue, looks at successful approaches to improving profit margins by increasing revenues and reducing operating costs. Remaining installments in the series will look at innovative approaches to growing the game through a focus on: • Staffing (June 2015) • Ongoing golf programs (August 2015) • Instruction (October 2015) • Special events (December 2015)

The Kansas-based GreatLife parent company was essentially dabbling in golf as the owner of three modest 18-hole golf courses in 2000, at the very apex of the last major wave of U.S. golf course development. Shortly thereafter, course owners began to feel the pinch of increased competition from newer and more elaborately amenitized properties.

In 2003, Farrant and his partners acquired their first fitness center, and began thinking that if bought, marketed and priced right, the package deal of golf and fitness could be a perfect way to attract cost-conscious families and individuals to both activities. Today, GreatLife’s corporate entity operates 25 locations, after recently taking the first giant step toward franchising its concept by teaming with Sioux Falls, S.D., entrepreneur Tom Walsh and his partner, Mike Malaska, to form GreatLife Malaska Golf & Fitness. That entity now owns five courses and eight fitness centers in the Sioux Falls region, with over 11,000 members and “affiliate” relationships with another 15 golf courses, where GreatLife members can play for as little as $10.

Farrant and Walsh are now shopping their franchising concept to owners and operators in other parts of the country, utilizing the proven track record of the GreatLife business model, along with the franchising expertise that Walsh developed in developing a portfolio of Burger King locations.

In some cases, GreatLife purchases golf clubs that have an existing fitness facility and improves upon both; in other cases, if a nearby off-site fitness center is available for purchase or lease, GreatLife will incorporate use of that facility into a membership.

Thinking Young Seven years or so ago, the management team at Brookhaven Country Club, ClubCorp’s flagship property in its North Dallas backyard, grew concerned that the club membership’s average age was increasing. And it didn’t take an insurance company actuary to predict what that trend would eventually mean. It also occurred to the management, and the club’s Board, that the price point of Brookhaven’s premium membership categories might be out of reach for much of the younger set. Enter the Young Executive membership category. Brookhaven CC has expanded instruction programs in step with the growth of its Young Executive membership category. “We created a Young Executive pilot program for Brookhaven in 2008,” says Membership Director Steve Woodall, “and later ClubCorp introduced it company-wide. In the first full year of offering it, we added 160 new members, and right now we have over 600 Young Executive golf members. As a result, I would say that the average age of our membership has dropped 10 years.” The Young Executive program comes at a reduced rate from the traditional full golf and social membership, and at Brookhaven, there are some restrictions regarding access to the club’s three 18-hole golf courses before 10 a.m. on weekends and holidays. The club now also offers a Junior Sports Membership for youngsters 17 and under, in either golf or tennis, or both. Junior members (OK, their parents) pay $214 a month for unlimited golf or tennis in off-peak times, in addition to a $100 application fee and signing a one-year contract. Brookhaven’s General Manager, Lisa Neel, says the attrition rate for those Junior Sports members has proven to be a bit lower than other membership categories, at least until the youngsters age out of the category. Brookhaven, which has always had a reputation as a “family club,” leaves no stone unturned in finding ways to involve all members of the family in golf instruction. Director of Instruction Kelli McKandless and her staff conduct clinics spanning the age gap, from a special SNAG Golf program for members’ children in the club’s daycare program, to an Adult Boot Camp that the club recently launched. Brookhaven’s Junior Golf Academy operates year-round, with students using a converted indoor racquetball court in bad weather. The club’s Summer Camps drew 480 kids last summer. Is all that instruction paying off? It certainly is for the club—incremental revenue from lessons, academies and camps has almost doubled in the last three years, McKandless says, and went from $200,000 to $364,000 last year.

In every case, GreatLife buys smart, acquiring courses or fitness centers that are either in bankruptcy or have become available at below-market prices. And whether it’s the golf or the fitness operation that’s struggling (or both), GreatLife has discovered that offering what is essentially a two-for-the-price-of-one proposition creates a much more attractive picture.

Healthy Appeal
By any standard, the price for using GreatLife facilities is reasonable. Individual golf/fitness memberships are available for as little as $30 per month ($40 for a family) at the most affordable locations, Farrant says, with the company’s most expensive location charging a monthly fee of $450. There is no initiation fee, and members pay only a cart fee if they use one when they show up, no matter how often they play.

“People ask us all the time what the catch is,” Farrant says. “The only catch, if you want to call it that, is that the monthly membership fee is pro-rated for an annual year, so people don’t just join for the busy golf months and then drop out.”

Both Farrant and Walsh are committed to utilizing the GreatLife model to promote not only healthy and wholesome family activities, but participation in golf. Both the GreatLife and the GreatLife Malaska courses offer free, or extremely low-cost, golf clinics for families, adults or juniors. With time typically cited as the biggest obstacle to playing more golf—or playing at all—GreatLife members can stop in any time and play only a few holes without feeling obligated to “get their money’s worth” by having to make it through nine holes or a full 18, as they are pre-paid for the year.

The company has the track record to back up its faith in the golf-fitness combination. Farrant points out that “six to eight” of the company’s current locations were either closed or in bankruptcy proceedings when GreatLife acquired them; all are open today. On the fitness side, Farrant said that a YWCA fitness center in the Topeka, Kan., area was losing $15,000 a month when GreatLife brought it into the fold. It now operates in the black—and as Farrant notes, that means it can continue its support of other community programs.

As for Walsh and the GreatLife Malaska entity, since aligning with GreatLife the three courses that Walsh’s group owned or managed in 2014 have registered first-year increases of better than 46 percent in rounds, over 28 percent in revenue, and over 24 percent in food-and-beverage sales.

Holding Their Interest
Including golf in the package also helps to lower the traditionally high attrition rate at many fitness centers, the GreatLife executives contend. “The fitness center turnover or attrition rate nationally is around 40 percent a year,” Farrant says, “so you end up having to turn your membership over every year and a half or so. But if you have golf too, people are less likely to give up their memberships.”

Beyond their success to date, Farrant and Walsh hope to spread the GreatLife gospel to other parts of the country through their franchise program. In addition to the growing appeal of the GreatLife brand and helpful operations and marketing advice from the parent company, the nearly unbroken record of GreatLife success may carry the day to help prospective course buyers secure needed loans.

“Nine times out of 10, it comes down to financing when someone is trying to buy a course,” Farrant says. “One of the big things we bring to the franchise situation is our track record. If a buyer can show his lender what he plans to do, and how he plans to do it, and can then show what we’ve done, there’s a lot better chance that he’ll get the financing he needs.”

Rewarding Loyalty JC Resorts is a golf course and resort ownership and management group based in San Diego. Under the direction of Executive Vice President John McNair, the company offers a substantial menu of loyalty card benefits, golf introduction programming and junior golf incentives, all designed to not only generate immediate revenue for JC’s courses, but also lay the groundwork for future play. The JC Players Card is annually touted in San Diego Union-Tribune Golf Columnist Tod Leonard’s “Christmas Gifts for Golfers” column as “the best deal in San Diego County.” The weekend card (good any day) sells for $329 and includes not only up to seven free plays and ten buckets of range balls and overnight stays at JC Resorts golf properties, but also a host of other discounts and benefits, including pro shop merchandise savings and either free or heavily discounted goods and services at participating partners such as Hooters, Sport Clips and other local businesses. A weekday-only card sells for a bit less—but in either case, the free plays at JC’s seven participating San Diego area courses, which are pricey by national standards, more than pay for the cost of the card. And the incentive is working—there are currently 8,200 JC Cardholders. JC Resorts also successfully operates Intro2Golf, its version of the national, PGA-sponsored Get Golf Ready program. The JC Resorts program features five one-hour small group lessons (with no more than an 8:1 student-to-teacher ratio), and the $99 cost includes buckets of range balls and two late-afternoon rounds for just $10 each. Since the program was introduced in 2009, over 4,900 new or beginning golfers have participated. For juniors, the company offers the JC Junior Players Card for just $40 a year, which features discounts and other benefits at the JC courses. And during summer hours from Memorial Day through Labor Day, juniors age 17 and under can play free after 6 p.m.; accompanying adults, parents or grandparents can join them for just $10.

Cutting Off Turf To Spite Your Place? Strapped golf club and course operators, desperate for ways to improve the bottom lines of their golf operations, frequently cast a first covetous eye at likely the course’s biggest line item, the course maintenance budget. But award-winning Superintendent Sandy Clark of the Barona Creek Golf Course at Barona Valley Ranch Resort & Casino in Lakeside, Calif., says that in many cases, the maintenance-budget turnip has been bled dry. “Turf reduction is a great idea in the long term, but it takes a few years to see the savings, which show up in reduction of fertilizer costs, fuel savings and obviously water savings,” Clark says. “We have seen a direct relationship in the percent of turf reduced with the amount of water we have dedicated to primary play areas, while increasing quality in those areas. “So far, we have been able to reassign some labor to many projects which have slipped behind, but without giving out dollars or water numbers, I can say that we have kept expenses to what we spent four years ago, and we are probably using less water than a coastal course,” Clark adds. The pressure to reduce maintenance expense has been felt at most courses for the past seven or eight years, Clark notes, and by this time, superintendents have essentially trimmed their costs as far as possible without beginning to severely affect the quality of the golf experience. “My suggestion is that courses need to evaluate the entire property,” Clark says. “Golf maintenance doesn’t have anything else to give. We have all adjusted fertilizer and chemical budgets to the point of risking quality. In terms of turf reduction, if courses check with water districts or government agencies in their area, they may find some rebates for removing turf. That really is about the last place a golf course can find savings—but expect it to be long-term, and not tomorrow.”