Week 3 Article Summary
Club and Golf enterprise leaders are constantly being challenged with sustaining financial strength within the operations they lead. Before reviewing some of these articles which relate specifically to the competencies and financial skills and knowledge necessary to promote strength, consideration first must be given to faculty type and mission.
For example, financial goals for facility types could vary considerably. Let’s spend a little time reviewing how facility types may present different financial goals:
Municipal – courses owned by a city or municipality. These courses offer a low cost recreation experience for their community, typically not focussed on promoting profit but more so promoting service of a recreational experience to their local citizens.
Daily fee – similar to a city or municipality, these courses are open to the public, but are privately owned and operated. Therefore depending on the owner’s mission there could be a greater value placed on a higher end product and service, or a more value based offering. Since privately owned, these type of facilities are generally established for profit generation.
Resort – similar to a daily fee type, profit from this resort amenity can support the overall financial strength of the resort in which it is tied. This facility type generally offers higher priced products and services comparable to daily fee.
Semi-private – a meld between the offerings of both a daily fee and private facility. A guest can choose to pay and play, but may experience restricted periods during the day/week where available to members only. Or a guest may chose to join as a member and be offered privileges like preferred golf reservations, full access to the club without restrictions, and member only events and social activities. In some cases, the resort course may share similar qualities as semi-private, there may be sometimes during the day/week where resort play (guests staying at the property) will have preference to the facility and its offerings over guests not staying on property.
Private – offers access to the club, facilities, and programming to members only. Members pay in some cases an initiation fee and month dues to maintain their membership. These monthly dues help sustain the business of the club’s operations. Depending on need for revenue, some private clubs will use a day of the week (generally on Mondays) to host outside events. Members may invite guests to play golf at the club or enjoy other amenities for a fee. One of the benefits of joining a club is to have access to facilities that would otherwise be crowded, or offer lower service and product standards. The private club is designed for higher service and product standards, and greater levels of access and flexibility, but of course this all comes with a price.
Club financial performance
As with any hospitality enterprise financial results play a significant role in measuring overall performance. This performance is no exception to the club and golf industry. Benchmarks and indicators are necessary to help measure the financial strength and consequentially the ability for the enterprise to invest in resources to meet organizational objectives. This article shares financial benchmarks through the comparison of both top and low performing clubs. This study reveals financial guidance for clubs and golf enterprise leaders to aspire. (2014 Club Financial Performance.pdf. see attached).
Comparison of present and future competencies required for club management
To reinforce the important role budgeting and finance have in the club and golf management industries, review the following article. To no surprise, the two highest rated competencies in both evaluations of present and future is budgeting and finance.
(Comparison of present and future competencies required for club managers.pdf . see attached)
Key managerial and financial accounting skills for private club managers: Comparison to lodging managers
This article shares perspective of an analysis between club and lodging managers comprehensive accounting skills. Findings illustrate the most critical skills for both club and lodging managers are understanding operating budgets, capital budgets, income statements, and analysis of variance. Review the following article to gain further insight on how club and lodging managers value financial skills in their settings.
(Key managerial and financial accounting skills for private club managers Comparison to lodging managers.pdf .see attached)
Management practices of club financial executives
Interested in knowing what the most important individuals and groups financial executives work with? This study reveals that the general manager, accounting staff, and the board of the club are all important constituents financial executive work with to lead clubs to financial strength. For club management specifically, the study revealed that the top three tasks of financial executives were making decisions/solving problems, communicating, and overseeing daily functions to ensure quality. Read the following article to gain further perspective on the management practices of club financial executives.
(Management practices of club financial executives.pdf . see attached.)
Ratio analysis: Financial benchmarks for the club industry
Presented in this article is another effort to share financial benchmarks for the club industry. Ratio analysis is a quick and effective way to assess trends and financial strength of club operations. Some top ratios used by club managers include:
Payroll cost percentage
Cost of food sold percentage
Cost of beverage sold percentage
Current ratio
Debt equity ratio
(Ratio analysis: Financial benchmarks for the club industry. see attached)
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