Golf clubs handicapped by membership declines

Two weeks ago, the attempt to convert Shadow Wood in Estero from a developer-owned golf club to a member-owned and operated course came to a halt after almost a year of negotiations between the developer and residents.

The reason? Too few paying golfers. The club currently has 930 members, club officials said, and the target was 1,050 members for a total of the three courses, two at Shadow Wood and one at nearby Shadow Wood Preserve.

That was just too big a gap, said Dave English, a resident of the community and a golf club member. If The Bonita Bay Group, the developer and present owner of the club, turned it over to the members, they would be responsible for the finances and meeting the budget, a hard thing to do when the club is short 125 members.

The gap between target membership and actual members is not unique to Shadow Wood. Across Lee and Collier counties, golf clubs — developer-owned and member-owned alike — are struggling to find ways to bring in enough golfers willing to pay initiation fees that typically are in the tens of thousands of dollars.

The difficulty in filling membership rosters in one of the country's top golfing destinations comes both from too many clubs competing for too small a market segment and a slowdown in the overall real estate market, say those in the business.

Different clubs are tackling the problem in different ways. Some are dropping the initiation fee, the amount a new member pays to join the club. Others are offering lower cost memberships that are "nonrefundable," meaning members do not get any of the initiation fee back if they leave the club.

Clubs also are pulling members from each other; generally speaking, those with better amenities and lower costs are gaining at the expense of those with higher membership costs.

"There are only two ways to gain customers right now; you either create new ones or you steal from each other," said Manon Passino, membership director for Wildcat Run in Estero.

A member-owned club, Wildcat Run recently dropped its initiation fee from $57,500 to $37,500, plus $7,000 in annual dues.

"It just took one or two clubs to get the ball rolling. You have to sell a certain number of memberships each year to meet budget, and you only have a limited window to sell them," Passino said. "When nothing was happening in January and February, people started dropping prices in March."

She was hoping there was a more creative approach to attracting members, but once some clubs started dropping the fees, others didn't have much option but to follow suit. For many clubs, lowering fees helps attract nonresident members.

Quail Creek off Immokalee Road dropped its $85,000 initiation fee with a 50 percent equity-sharing to $35,000 in 2003. The club sold 181 memberships in less than a year, said Joan Ewing-Bilson, membership director.

"There are too many golf courses trying to attract too few members. You really have to offer the best of everything," Ewing-Bilson said. "We gain people from other more expensive clubs all the time."

About 70 of Quail Creek's 580 members for its two golf courses are nonresidents, she said.

Clubs with higher dues say golfers are willing to pay more to get what they want.

The Club at Pelican Bay has a nonrefundable initiation fee of $100,000 for everyone except the original 444 members out of a total 540 members. For the original members, the initiation fee was $150,000, said Donna Marie Amy, membership director, and the equity return is based on a complex tiered system.

Despite the price tag and a $7,990 annual fee, the club is at full membership, with 80 percent of its members from within the community. There is a waiting list for membership, Amy said.

"It depends on what they are looking for. If it is a lifestyle choice, they are not going to care about the cost or the money return," Amy said. "If they are looking for a deal, they will go somewhere cheap."

But the overall slowdown in the real estate market has affected golf club memberships, she admitted. If fewer homes are being sold and there is less traffic through a community, it is going to affect how many new members sign up.

Tom Noyes, general manager at Wildcat Run, said as more courses are built, the amount of play at individual courses has been decreasing as well.

"I guess the industry forecasted that the growth of the game was going to be more robust than it was and so now we have too many golf courses," Noyes said.

As more courses share the same or only slightly higher numbers of golfers, said Stacy Persinger, membership director for the Forest Country Club, people have more choices — and not everyone chooses to pay the price of convenience.

Persinger said clubs like hers that draw members from several high-density communities near each other tend to do well. Even so, the club dropped its fees from $50,000 for a non-equity membership all the way to $25,000 after the terrorist attacks in 2001. Since then, fees have risen to $37,500, with $6,700 annual dues.

Still, the club has about 540 members and a cap of 600 and she would like the membership to be at least around 575, Persinger said.

The trend of declining membership has also caused developers to take a second look at building golf course communities, said Mike Roeder, a planner for Knott, Consoer, Ebeleni, Hart and Swett. Roeder has been a planner in Lee County for 28 years and worked with a couple dozen golf course communities.

The most recent example was US Home and Lennar deciding not to build a golf course at The Habitat, he said.

"Ultimately, there are only so many people that have the time and inclination to spend four hours hacking around the golf course," Roeder said. "So builders are not building as many courses, clubs are dropping their prices and some have even gone out of business."