One year after taking control of a struggling upscale golf club in Hanover County, the owners of the Federal Club are trying to sweeten their pitch.
The club just slashed the price of memberships in half to lure in new members and move closer to becoming a fully private club again.
Chris Gilman, who along with his brother and sister bought the club out of bankruptcy in 2010 for $2.6 million, is trying to recruit a few dozen more members and wean the course off revenue from non-members who pay greens fees to play. That’s proven more difficult than he projected.
“I’m sort of cutting my own throat to cut them out,” Gilman said, “but I’m hoping that [the strategy] drives members.”
“You can’t really create a club atmosphere without being private, and having the public offering is a significant incentive not to join.”
The problem for Gilman: More than 50 percent of the rounds being played at the course are by non-members, who pay $100 per golfer to play on the weekends. And that’s a sizable source of revenue for the club, which isn’t breaking even. (In August 2010, Gilman predicted the course would not be breaking in the first year.)
The Arnold Palmer-designed course will eliminate public play on Saturdays and Sundays starting in September and will cut out public play on Thursdays and Fridays beginning in June 2012, Gilman said.
That means the Federal Club will need more members to keep the revenue coming in.
The club has about 160 members and aims to hit 180 as soon as possible. The ultimate goal is 250 members, Gilman said.
He’s lowering the initiation from $4,000 to $2,000 and cutting yearly dues to $2,900 for new members who pay in full. Cart fees are being cut to $10.
The Federal Club is not the only private course lowering rates and upgrading facilities to entice new members. In June, BizSense reported that Jefferson Lakeside Country Club was lowering initiations and dues for members who joined before a million-dollar renovation was completed.
“If people want to join a club, we’ve got a good shot at getting them here if they are in this general quadrant of Richmond,” Gilman said, adding that the decision for his prospective members is often between joining a club or playing public courses, not shopping around for a private club.
Gilman has also upgraded the course and clubhouse area. At this time last year, the bent grass course was losing some of its luster under the bankrupt owners.
Superintendent Trevor Hedgepeth said the Federal Club added 30 percent to its maintenance budget. The club repaired 20 percent of the bunkers, fixed drainage in some fairways and added landscaping around six holes, he said. There are also two tennis courts under construction as well as a pavilion for outings.
Hedgepeth said the club is picking up a lot more business from outside events and tournaments than in previous years.
“We are not cash flowing yet, but we’re the closest the club has ever been,” Hedgepeth said. “It’s relative to what we’ve seen here, when the club was losing $75,000 a month.”
Aaron Kremer is the BizSense Editor and covers the golf industry. Please send news tips to [email protected].
One year after taking control of a struggling upscale golf club in Hanover County, the owners of the Federal Club are trying to sweeten their pitch.
The club just slashed the price of memberships in half to lure in new members and move closer to becoming a fully private club again.
Chris Gilman, who along with his brother and sister bought the club out of bankruptcy in 2010 for $2.6 million, is trying to recruit a few dozen more members and wean the course off revenue from non-members who pay greens fees to play. That’s proven more difficult than he projected.
“I’m sort of cutting my own throat to cut them out,” Gilman said, “but I’m hoping that [the strategy] drives members.”
“You can’t really create a club atmosphere without being private, and having the public offering is a significant incentive not to join.”
The problem for Gilman: More than 50 percent of the rounds being played at the course are by non-members, who pay $100 per golfer to play on the weekends. And that’s a sizable source of revenue for the club, which isn’t breaking even. (In August 2010, Gilman predicted the course would not be breaking in the first year.)
The Arnold Palmer-designed course will eliminate public play on Saturdays and Sundays starting in September and will cut out public play on Thursdays and Fridays beginning in June 2012, Gilman said.
That means the Federal Club will need more members to keep the revenue coming in.
The club has about 160 members and aims to hit 180 as soon as possible. The ultimate goal is 250 members, Gilman said.
He’s lowering the initiation from $4,000 to $2,000 and cutting yearly dues to $2,900 for new members who pay in full. Cart fees are being cut to $10.
The Federal Club is not the only private course lowering rates and upgrading facilities to entice new members. In June, BizSense reported that Jefferson Lakeside Country Club was lowering initiations and dues for members who joined before a million-dollar renovation was completed.
“If people want to join a club, we’ve got a good shot at getting them here if they are in this general quadrant of Richmond,” Gilman said, adding that the decision for his prospective members is often between joining a club or playing public courses, not shopping around for a private club.
Gilman has also upgraded the course and clubhouse area. At this time last year, the bent grass course was losing some of its luster under the bankrupt owners.
Superintendent Trevor Hedgepeth said the Federal Club added 30 percent to its maintenance budget. The club repaired 20 percent of the bunkers, fixed drainage in some fairways and added landscaping around six holes, he said. There are also two tennis courts under construction as well as a pavilion for outings.
Hedgepeth said the club is picking up a lot more business from outside events and tournaments than in previous years.
“We are not cash flowing yet, but we’re the closest the club has ever been,” Hedgepeth said. “It’s relative to what we’ve seen here, when the club was losing $75,000 a month.”
Aaron Kremer is the BizSense Editor and covers the golf industry. Please send news tips to [email protected].
What is “club atmosphere”?
It’s an atmosphere condusive to members using the club as a place to gather and socialize in addition to playing golf. The biggest difference between that and a public course is that the public player typically uses the course and facilities transactionally. They’ll come and play a round, maybe eat in the clubhouse restaurant (if there is one) and then they may come back, they may not. Most public players (me included) like to play different courses so repeat business is not always guaranteed. With a club atmosphere members will often spend more time at the club before/after and in… Read more »
It seems to me that country clubs need to take on a new meaning and design in order for it to survive. It is obvious that the old ways are not attracting new, young members. Plus, Richmond is over-saturated with country clubs anyway.
The private/country club model definitely does need to evolve. While the economy is hurting, country clubs are suffering from long-term trends which are and will continue to reduce demand: 1) social norms are changing — men are choosing to/expected to spend more time with their family, so are spending less weekend time playing golf or hanging with buddies than they used to. 2) the rise of nice daily fee (“country club for a day”) courses means there are a lot of nice options available when they are able to get out to play. The better public courses are now equal… Read more »
The private club atmosphere is a more exclusive yet relaxed feel, a members-only benefit, where staff knows the members by name and knows their preferences, where members develop camaraderie as well as business and social relationships through their repeated use of the golf, pool, tennis and food & beverage facilities together. 250 members is not our long term ultimate goal, it’s our 2012 goal. The Federal Club should eventually have between 350 and 500 members, and we may not be profitable until we reach 300 members. We will continue to produce a truly championship caliber and challenging golf course experience… Read more »
Great course! I haven’t been there for a while, have they built a clubhouse?