Golf and hospitality industry expert Jim Riscigno offers his views on what operators can do to help them get through the current economic recession. Riscigno, a former Club Corp executive and currently president of ASE Consulting, will be a speaker at the March 30-April Golf Inc. Conference at the World Golf Village.
We are all painfully aware of what has been creating those restless nights and difficult board and staff meetings over the past couple of years.
Our sector of the hospitality industry is in a recession, especially if you are involved with a residential country club that is still developing its membership. Membership enrollments have dramatically declined and the ability to collect high initiation fees and deposits is a thing of the past. Many clubs are scrambling to adjust and offer special membership programs, discounts, financing programs and more.
So what should we expect to see over the next two years?
The current situation will continue (at best) for the next two years. There are no short-term solutions to most of the issues that are causing pain for management and club members. The residential real estate markets may start to slow the decline in sales and prices, but no one is predicting turnaround in this sector over the next 18-24 months. The next area to see softening will be the commercial real estate markets and this will not be good news.
Employment trends are not encouraging and retailers are struggling. It may get worse before it gets better, but it will change. Nothing stays the same and if you can step back and take a deep breath and not panic you can actually benefit from any of these cycles or at least survive.
The first advice is to stay informed of what is happening in the local, regional, national and international markets. Study the past down cycles; if you are not a student of history you are doomed to repeat it.
Don’t panic. You are not alone and there are strategies you and your team can use that will help to position your club for the eventual turnaround.
Make certain you are not cutting muscle as you look to cut the fat from your operations. Let’s define muscle as your most talented staff, the standards that your members expect, the member activities that are traditions, member and staff communications and keeping the integrity of your membership offering positioned to benefit not just the club, but existing members.
The mistakes I see all too often are short-sighted business decisions by managers, owners, and/or boards with no view of the consequences these decisions may have in the long term. Once you cross certain lines you will put yourself and the club in a downward spiral (possibly a death spiral). It will be very difficult to recover from bad short-term decisions when times are better. You must bite the bullet and keep talent, standards, traditions and communications at the appropriate level.
How do you accomplish this? By adopting strategies such as member focus groups, member surveys, strategic plans, staying current with the industry and continuing education meetings, benchmarking successful clubs and other hospitality-related operations, staying current by reading industry publications as well as other appropriate publications and seeking outside help from industry associations, industry experts, consultants and management companies.
You have many options available to you, but the one option you can’t afford is doing nothing and hoping this will all go away. Leadership strengths or weaknesses show clearly during difficult times.