By Jason Becker
During the summer of 1988, major real estate developers saw conversion rates of “home buyer to golf member” as high as 80 – 85% across the Sun Belt. It was an exciting time for club board of directors as well as a lucrative time for the club’s balance sheet. The “conversion rate” resulted in plenty of revenue for capital improvements, combating depreciation, etc. Today, those projected conversion rates are between 15 – 20%.
However, if clubs know exactly what the future golf member is seeking, they can posture themselves correctly and expand the focus to cater to specific desires and help with the decision process. The secret is to market your club around real estate, both within and outside the gates, because it is a bigger piece to the process than one would think.
Consider these consumer buying trends from a sample size of 16,000 prospective Sun Belt golf members conducted by Golf Life Navigators (a virtual marketplace where consumers can be matched to their ideal private club and / or community):
- 70%plan to combine the search for a perfect golf club with an ideal home.
- Of that 70%, it is an even split of which is more important, the club or home.
- 56% of these prospective members would like to live in a gated golf community.
- 44% of these prospective members are seeking a non-resident membership.
- The average transition time is 13 months.
The main point of these statistics is that the real estate decision process is a major one for todays prospective golf member. Even for the die-hard golf enthusiast who cannot wait to be a member of a Sun Belt club, the home they purchase will play a significant role in what club they decide to join. Moreover, these trends should be playing a key role in how clubs position themselves for prospective members.
As an example, Florida’s Grey Oaks Country Club in Naples is one of the top gated communities in the U.S. In 2017, the real estate market in the 34108-zip code (where Grey Oaks resides) was stagnant. However, after a $36 million capital improvement campaign, the homes in Grey Oaks experienced an average market value increase of 8.5%. To the pleasure of the membership, their decision to invest millions into the club and amenities paid off and significantly increased home values compared to neighboring clubs and homeowners within the same zip code.
In summary, as much as real estate has always been a burden of a conversation in the boardroom, I cannot stress enough the importance of wrapping your arms around it immediately. Consider:
- How does your club market and brand to potential buyers? (the 70% above)
- Does your club have a non-resident membership program? (the 44% above)
- How will the club’s board posture a capital improvement plan to members as a sound investment? (the 8.5% above)
The future golf member is telling us real estate will play a vital role in decisions of where to buy and what club to join. The sooner this fact becomes engrained, the smarter the decision-making process will become on behalf of the club and its membership.