Private clubs saw 65% drop in non-dues revenue in April

A report by Club Benchmarking showed the COVID-19 pandemic led to drops in non-dues revenue in March and April after clubs were forced to close.

April was the cruelest month for private clubs, and it wasn’t just because lilacs were breeding out of the dead land. The COVID-19 pandemic forced the closure of significant club operations and led to drops in non-dues revenue, according to a report by Club Benchmarking.

While membership dues have been constant, clubs first saw non-dues revenue drop in March from $96.5 Million in 2019 to $62.6 Million. But half of that month was relatively normal. Clubs felt the full impact of the pandemic in April, with non-dues revenue dropping from $112.0 Million in 2019 to $37.7 Million. That translated to $150,280 for the average club in April, down from to $446,308 in April 2019 or a 65.4% drop. 

Non-dues revenue from activities such as a la carte dining, golf outings and events disappeared virtually overnight starting in March. But many clubs pivoted quickly to engage members with take-out dining which lessened the revenue drop. For clubs without golf, non-dues revenue declined more severely than it did for clubs with golf — 70.5% versus 64.3%.

Dues Revenue, which is the primary source of funds for private clubs, remained steady. Dues revenue was up 3.5% at the median year over year for clubs with golf. For initiation fees, 72% of clubs had no change, 4% decreased their initiation fee and 24% increased the initiation fee.

Also, 25% of clubs had a wait list in April and 25% had a sell list meaning there are members waiting to receive equity back from the club after leaving. Of clubs with a wait list, the median number of prospective members on the list was 16. The median number of members on the sell list was 17.

Club Benchmarking provides a Strategic Monthly Dashboard, a business intelligence service for the private club industry that makes it possible to systematically measure monthly trends in Membership, Cost of Belonging, Initiation Fee and Joining, and Finances. More than 250 clubs in 38 states and four Canadian provinces use the service, and more than 300 provided date for the most recent analysis. 

Among all clubs, debt decreased 3.5% at the median year over year, while capital investment declined a modest 3% in April 2020 from the prior year.

Club Benchmarking plans to continue to monitor and report on how the COVID-19 crisis is affecting private clubs, with revenue expected to be lower for April and rebounding in May. 

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