BIRMINGHAM COUNTRY CLUBS DELIVER ON RENEWED APPEAL
My Task: This was another enterprise story I wrote. As country clubs file taxes as 501(c)(7) entities, or nonprofits. I sifted through every country club in Birmingham's Form 990 Filings from guidestar in order to trends within the metro. I wanted to see if country clubs have made progress or digressed since the pandemic. I was able to find revenues, membership dues and initiation fees and use these numbers to compel Country Club general managers to speak on the outlook of their club.
Since the pandemic, country club revenue has skyrocketed across the country, and the Birmingham metro club scene is no exception.
A review by The Business Journals of more than 2,000 nonprofit country clubs and the Form 990 documents submitted by those organizations showed a median 24% increase in country club revenue between 2019 and 2022.
The nearly 100-year-old Mountain Brook Club leads the way in the metro area in total revenue. According to its Form 990 filing, the club earned $17.1 million in 2022, a 72% increase from its 2019 revenue of $9.9 million. Other major country clubs that have posted significant revenue increases are Vestavia, Hoover and Riverchase.
Data from The Business Journals shows that of the five major nonprofit country clubs in the Birmingham metro, only one didn’t experience a significant revenue increase over the four-year period from 2019 to 2022: The Country Club of Birmingham.
While it’s been behind the pack in the most recent years, it had a record-high revenue in 2019 of more than $27 million, a near $10 million spike from 2018.
“We had a significant capital project in 2019, which was completed in 2020,” board member John Smith said. “That obviously led to a significant infusion of money or revenue.”
Prior to the pandemic, the BBJ previously reported, the club revealed a $12 million building expansion that included additions to a dining room, children’s room, locker rooms and pool area renovations, contributing to the inflated revenue.
“When that project ended, of course then the revenues went back to what you might call ‘normal,’” he said.
The club’s revenue is on its way back up, he said, increasing 10% from its 2020 revenue totals.
Why the revenue increase?
During the pandemic, golf courses served as an escape for those looking to break free from the confinement of their homes.
“Public golf started having literally six-hour rounds of golf,” said Ronald Banaszak, executive vice president of international business development for BoardRoom Magazine and Distinguished Clubs. “So, on the public side, you couldn’t get on a golf course, and even if you did, it was going to be a long day waiting on the tee box for the group in front of you.”
This heightened interest trickled into the country club scene.
“Clubs that didn’t have a wait list now had a wait list. Clubs that already had a wait list, it was even bigger to get in,” he said.
Every metro area country club saw an increase in its revenue stemming from dues since 2019: Although inflation was at a 40-year high in 2022, metro club membership dues totals have steadily increase since the pandemic, alluding to an increase in membership.
Third-party management
While clubs across the Birmingham metro are succeeding in the traditional country club makeup comprised of in-house management, some clubs source a third party to keep up with trends and modernize management in the industry.
Pine Tree Country Club, located at 5100 Pine Whispers Drive in Birmingham, has been managed by Troon, the world’s largest professional club management company, since 2014.
“Everybody here works for Troon,” Pine Tree Country Club General Manager Andrew T. Smith said. “The owners have one employee, which is Troon, because we handle everything for them.”
Founded in 1990, Troon provides management services for more than 900 locations across the globe, supplying the general manager with a multitude of corporate resources such as a sales and membership tactics specialist, a marketing representative, a food and beverage professional and more.
“Our oversight model is we surround that GM with subject matter experts in all facets of the club,” said Matt Hurley, Troon’s executive vice president of operations.
Although Pine Tree Country Club’s financials are not publicly available, Smith said the club has seen growth since Covid.
“I thought that after Covid when things kind of started settling down that we would level off and maybe go backwards a little bit from a membership standpoint, but that hasn’t been the case at all,” Smith said.
As club popularity increased, Pine Tree began to put membership caps in place for the sake of its members.
“We were trending so much and increasing membership that we said, ‘OK, we need to be cautious of our member experience, we don’t want everybody that wants to play golf not be able to play golf,’” Smith said. “We’re always going to lose members, but we’ve been backfilling those losses to where it’s pretty much maintaining.”
Pine Tree offers three memberships with one-time initiation fees ranging from $5,000 to $15,000, along with dues ranging from $275 to $450 per month.
Modernizing the clubs
Country clubs are always looking to reinvest.
“The clubs who invest and reinvest, they win at the end of the day,” Hurley said. “Clubs should always be, whether it’s a large project or a small project, doing something to invest to make their club and their facilities stay relevant."
“If a club can do it financially and stay up to date on their product and what they offer, at the end of the day they’re going to be in a good position to be in the future.”
Since 2019, Mountain Brook Club has invested more than $3.3 million into its facilities. The club spent more than $2 million remodeling the interior of the club and nearly $1 million in its kitchen renovation.
“We redid the downstairs dining areas to create separate spaces for casual dining,” Mountain Brook Club General Manager Mark Lockridge said. “The other stuff was just an upgrade to all the areas, new paint, new floors and some new furniture.”
Additionally, the club has turned its focus to technology through an app.
“It allows them to utilize the member amenities without having to call and make reservations,” Lockridge said of member’s ability to have electronic access to the facilities.
And that access is fueling greater interest among certain demographics.
Generational divide
Country clubs are attracting younger prospective members, according to a demographic analysis by Placer.ai of communities where country clubs are located. The location tracking firm found that country clubs are attracting visitors from neighborhoods with lower median ages compared to the neighborhoods that fed visits to country clubs in 2019.
“Millennials, a consumer cohort that has historically shown little interest in joining country clubs, seem to be changing course and may be driving some of the visit growth,” Placer.ai said in its report. “This population is increasingly seeking spaces to socialize and network – and in response, many golf clubs are shifting their offerings to appeal to a younger demographic.”
While clubs begin to set their sights onto the next generation, questions of a culture change arise. One of the biggest discussions involves the dress code.
“The club environment still has a ways to go to get super casual and I don’t know that they ever will or should,” Hurley said. “I do believe relaxing some dress codes and being more casual is smart, especially as demographics change within a club.”
Golf brands such as Peter Millar, Travis Mathew and Lululemon have succeeded with their athleisure apparel, filing country club golf shop shelves with their product.
“They’re making collared shirts that are made to be untucked,” Hurley said. “Lots of different hat configuration from stretch fit to trucker-styled hat, not just the same old cap that maybe was in the shop 20 years ago.
“It’s still a good clean professional look, but more casual. Clubs will continue to embrace that, and they should.”
While the change in dress code may rub some the wrong way, Pine Tree doesn’t mind it. Smith said a major draw to the country club is its “relaxed, social, family-oriented” nature.
As the new generation grows into the major players in the country’s economy, preferences change, leaving country clubs at a crossroads.
“Country clubs are either going to evolve and continue to cater to the members and keep their facilities updated or they are going to die out,” said Michael Lewandowski, president of design-build firm L&L Venture in the Pittsburgh, Pennsylvania, area in an earlier interview with The Business Journals. “It’s a constant marketing effort to make sure you are at capacity.”
Marie Leech contributed to this report.
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