Golfers, private clubs retrench during economic downturn
The Spokane Country Club has an unusual spring sale going on.
A few of its golfers are willing to part with their memberships for $2,000. That, and a $6,000 initiation fee, will get the buyer onto one of the Northwest’s oldest private courses, one that hosted the first Women’s U.S. Open in 1948.
General Manager John Stone said the club nestled along the Little Spokane River has 18 members who want to sell their golf course privileges and leave the club entirely, or stay only as social members.
Perhaps 10 members, who can set their own price, would be selling at the bargain rate, which he expects to discontinue May 31, he said.
On the South Hill, the Manito Country Club also has memberships available, but at the more stately price of $7,500, plus a $9,000 initiation fee.
General Manager Dan Veliz said the club sets the membership price, which has been raised only once since 1993. A 2005 increase covered the cost of a new maintenance building, he said.
That either club has memberships to sell is a reversal of fortune that Stone and Veliz said reflects economic pressures, with the screw turned still tighter by weather that for the past two years prevented the courses from opening on their March 1 target dates. Even April has been hit or miss, Veliz said.
December’s weather was a disaster, as families and groups canceled event after event because roads were impassable.
“December should be one of our busiest months,” Veliz said. “Nobody was here.”
He and Stone said the correlation between membership applications and the economy is nothing new.
When the economy was humming along in the 1990s, Stone said, Spokane Country Club had a three-year waiting list should any one of the 370 golf memberships become available. The dot.com blowup and Sept. 11 wiped that list out, he said.
Stone said interest slowly rebounded, and by the summer of 2007 members were asking $8,000 for a share.
Although weather, the season and the economy affect prices, he said the recreational value remains constant. Nobody waits for a tee time, and members can play 18 holes in less than three hours in the afternoon. Or they can play just a few holes and take the kids along with them.
Veliz said it took Manito two years to recover from the 2001 recession. By mid-2004, the club again had a waiting list, and by last summer it had grown to 22 names. Now, of the 400 golf memberships, 13 are for sale.
But Veliz and Stone said their clubs are in no financial hardship, and they do not intend to cut staff. Many other Northwest clubs cannot say as much.
The Club Managers Association of American has chapters based in Boise, which encompasses Spokane, and in the Puget Sound area. The heads of both said a few of their members are under intense financial pressure.
John Thomas heads the Evergreen chapter and runs the Inglewood Golf Club in Kenmore. Of his 41 chapter members, he said, five or six are having trouble with debt loads and members who are walking away because club bylaws do not bind them until their memberships are sold. Others who bought memberships for as much as $50,000 in 2005 and 2006 were unloading them for half that amount, Thomas said.
As many as 80 memberships are available at some clubs, he said, adding, “I don’t think anyone has a waiting list.”
Thomas said interest in golf remains strong, but if families are going to put up $45,000 to join, clubs must offer something for everyone, not just dad.
He said he was unaware of any club that might be facing bankruptcy. “I would say the prognosis is good,” Thomas said.
Chapter President Marc Wilkens said the 25 clubs in Idaho and eastern Oregon and Washington that belong to the Inland Empire chapter have lost members. One in Boise may close the gates, he said.
“We’re all in the dues business,” Wilkens said, and when members can no longer handle $400 or more in monthly assessments, clubs starve.
But if members, where they can, choose to walk away from their memberships, they will get only a small fraction of their share price back.
“Everybody’s waiting right now,” he said.
Stone said the Spokane Country Club is already ahead of budget on wedding and party bookings regardless of the slump in golf memberships.
“It made it through the Depression. We made it through a lot of stuff,” he said.
Painful as it might be for members to hold on until they can sell their memberships, Veliz said Manito has never had a member fail to meet their financial obligations to the club. “That’s never been an issue,” he said.
Despite times that are harder than anything he has experienced since joining Manito in 1976, Veliz said he was cheered last week by the sale of one each golf, social and junior executive memberships, all within three days. And the weather was finally cooperating.
“The sun’s coming out,” he said.