Country Club Stats. A Publication of RubinBrown LLP

Transcription

1 Country Club Stats 21 A Publication of RubinBrown LLP

2 Executive Summary Contents 1 Executive Summary 5 General Club & Membership Information 6 Income Per Member 7 Operational Information 8 Golf Operations 1 Food & Beverage Operations 11 Personnel & Other Information 13 RubinBrown s Hospitality & Gaming Services Group RubinBrown is pleased to present our 21 Country Club Statistical Analysis. Our survey results represent responses from 16 St. Louis metropolitan area clubs with fiscal year ends that ranged between September 3, 29 and March 31, 21. General Industry Economic Update In our previous edition of the survey covering St. Louis area clubs we noted that generally, clubs experienced an average decline in total membership from September 28 through June 29 of approximately 5 percent (this was an average net loss of 14 regular members during that period). Membership losses appear to have stabilized by the end of 29. For years ending from September 29 to March 21, the clubs participating in our survey indicated a net gain of one regular member, but with substantial work and effort to fill an average of 25 regular member resignations during the year. Although the attrition has subsided, the membership base for most clubs is below the levels necessary to maintain a balanced budget without continued cost reductions and reduction of headcount. Clubs continue to aggressively battle to increase membership at all levels and increase utilization in all areas by the members and guests. Dues rates increased by an average of 2.5 percent and were often accompanied by an operating assessment to fund deficits incurred during the past year (8 clubs levied operating assessments to the membership). 1 Raise Your Expectations

3 Golf Operations Total rounds of golf declined by approximately 5 percent for the second year in a row due to declining membership levels and less special event activity, with the annual average number of rounds per 18 hole equivalents decreasing from 17,3 as reported last year to approximately 16,4 for the most recent period. golf course maintenance expenses declined very modestly as compared to the previous year. The average golf course maintenance costs on a per hole basis declined from $51,5 to approximately $49,3. Pro Shop Operations Gross profit margins on merchandise continued to slide nearly another percentage point from the previous year to an average of 16.3 percent. Food and Beverage Operations Clubs experienced declining food and beverage revenues as compared to previous year. Ala carte revenues were down approximately 5 percent and banquet/event activities were down an average of 1 percent. food profit margins remained steady at roughly 57 percent. Profit margins for beverages dropped approximately 3/4ths of a percentage point to 65.7 percent. Declining food and beverage revenues drove the total food and beverage labor and fringe benefits as a percentage of total food and beverage revenues upward to an average of 74 percent from the prior year of approximately 7 percent. Moving Forward In order for the club marketplace to rebound, substantial help is needed from the economy along with a continued focus by club management and boards in: Actively and continuously rebuilding membership at all levels Building a family atmosphere for the next generation Increasing membership utilization of services in all areas Aggressively controlling costs and expenses Managing cash flow for debt service, capital improvements and operations Retaining quality employees and providing excellent service Complying with increasingly complex government and tax regulations Thanks to the many area club controllers and general managers who participated in our annual survey. We encourage club managers, controllers, board members and others to use these statistics as one of many tools in evaluating their club s operations. Please keep in mind the wide range in size and diversity in club operations throughout the St. Louis metropolitan area when comparing your financial and operating results to averages contained herein. Clubs reported an average net loss (after all direct costs and labor) from food and beverage operations of approximately $165, for years ending between September 29 and March 21. This average loss increased approximately 35 percent over the prior reporting periods. 2

4 General Club and Membership Information 1. Number of clubs participating in survey 16 clubs 2. Maximum number of regular club members allowed A. Current number of regular club members 31 B. Current number of junior/intermediate members 31 C. Current number of senior members 4 D. Current number of social members 77 E. Current number of other classifications (excluding nonresidents) 46 F. Current number of total members (excluding nonresidents) Number of clubs with a waiting list of prospective members 3 clubs Median 5. A. Number of new members added during the year: Regular Social 8 6 B. Number of members lost during the year: Regular Social C. Net gain in regular members over the prior year 1 6. Number of clubs planning or currently implementing significant capital improvements: Clubhouse Golf course 6 clubs 2 clubs 3 Raise Your Expectations

5 Income Per Member Annual Dues and Assessment Revenue Per Member (A) $6 $5 $4 $3 $2 $1 5,8 4,8 Median Annual Food and Beverage Revenue (including service charges) Per Member (A) $6 $5 $4 $3 $2 $1 4,2 4,6 Median (A) Total members include all categories of membership (except for nonresidents) Annual Sports Activities Revenue Per Regular Member $2 $16 $13 1,71 1,74 $1 $7 $3 Median Sports activities include greens fees, cart rental, locker fees, tennis and swimming (excludes pro shop merchandise sales). This total is divided by total regular members. 4

6 Operational Information Median Revenue Revenue Per Member Per Member 1. Operating revenues per member (all members excluding nonresidents) during the past fiscal year: Dues $5,78 $4,798 Initiation fees (15 clubs) Capital assessments (11 clubs) Operating assessments (7 clubs) Greens fees Cart rental Locker fees Tennis and swimming fees (11 clubs) Pro shop merchandise sales (13 clubs) Restaurant sales 2,329 2,35 Bar sales (15 clubs) Service charges All other income (15 clubs) $13,347 $12, Operating expenses per member (all members, excluding nonresidents): Food and beverage $3,785 $4,292 Golf course and grounds 2,79 2,28 Pro shop 1,73 1,13 General and administrative 1,527 1,338 Depreciation 1,43 1,364 Real estate taxes Insurance Interest (15 clubs) Utilities Clubhouse 1, Other (13 clubs) $12,71 $12, A. Monthly dues, assessments and charges (regular members): monthly membership dues $54 monthly assessments (including capital) (11 clubs) 62 monthly food & beverage minimum (1 clubs) 76 monthly service charge (11 clubs) 56 B. total monthly charges (all clubs) $667 C. increase in dues for regular members over prior year 2.6% Median 4. Initiation fees: A. Initiation fee for regular membership $23,1 $13,75 B. Refundable portion of regular member initiation fee (9 clubs) 65 C. Initiation fee for social membership (1 clubs) 1, 5 5 Raise Your Expectations

7 5. percentage of total revenue derived from outside events (not-for-profit clubs only) (13 clubs) 9.5% 6. Club borrowings and leverage A. bank debt per member (excluding nonresidents) (14 clubs) $6, B. total bank debt (total dollars) (14 clubs) $2,91, C. bank debt to membership equity.6 to 1. D. effective borrowing rate 4.6% (fixed rate: 9 clubs) (floating rate: 6 clubs) Percentage of Outside Event Revenue Generated for Not-for-Profit Clubs 2% 15% 1% % Median High Low 6

8 Golf Operations Peak Season 1. A. guest greens fees for 18 holes (15 clubs): Weekdays $63 Weekends $7 B. golf cart rental rates for two people playing 18 holes (15 clubs) $33 2. A. Maintenance expenses associated with the golf course for the most recent fiscal year (per 18-hole equivalent): Payroll (16 clubs) $48, Payroll taxes and employee benefits (15 clubs) 9, Fertilizer, chemicals, etc. (16 clubs) 9, Fuel (16 clubs) 22, Repairs and maintenance (16 clubs) 39, Sand, seed and sod, etc. (15 clubs) 21, Supplies (16 clubs) 15, Water (Those without water sources) 72, Trees and landscaping (15 clubs) 2, All other golf course expenses (16 clubs) 74, $923, B. water cost per 18 holes for those with some existing $15, water source (8 clubs) 3. A. number of rounds of golf (18-hole equivalents) played 16,4 within the past fiscal year B. number of outside tournaments held by club (13 clubs) 1 Per Hole 4. amount spent on capital improvements for the golf course $7,1 4. during the past fiscal year (11 clubs) 5. amount spent for golf course equipment for the past fiscal year $76, 6. A. Number of clubs leasing golf carts during the year 6 clubs B. annual lease cost per cart (for clubs that lease carts) $875 C. purchase price per cart (for clubs that purchase carts) $3, Number of clubs owning the golf pro shop 12 clubs Median 8. A. Gross profit margin on merchandise for those clubs that own the pro shop (13 clubs) 16.3% 17.1% B. commission paid on pro shop sales (4 clubs) 6.5% Inventory Per Regular Total Member C. pro shop inventory levels (1 clubs): Peak season $16, $55 Off season $112, $39 D. pro shop inventory turnover per year (1 clubs) 2 times 7 Raise Your Expectations

9 Composition of Total Rounds of Golf 1% 8% 6% 77 4% 2% 15 From Members From Guests From Outside Tournaments 8 From Public Total Golf Course Capital Improvements Per Regular Golf Member (11 clubs) $5 $4 $3 425 $2 $1 12 Median Total Golf Course Maintenance Per Regular Golf Member $5 $4 $3 $2 3,45 3,595 $1 Median 8

10 Golf Operations (continued) Combined Golf Course Maintenance and Capital Improvements Per Hole $8, $7, $6, $5, $4, $3, $2, $1, 54,3 46,7 Median Golf Course Maintenance Per Hole $6, $5, $4, $3, $2, $1, 49,3 45,9 Median Golf Course Maintenance Per Mowable Acre $1, $7,5 $5, 6,5 5, $2,5 Median 9 Raise Your Expectations

11 Food and Beverage Operations Median High Low 1. Gross profit margin on food sales (excluding service charge income and mandatory gratuity income) 57.1% 57.% 73.5% 36.5% 2. Gross profit margin on beverage sales (excluding service charge income and mandatory gratuity income) 65.7% 65.9% 73.% 57.8% 3. A. Percentage of food and beverage payroll and fringe benefits to total food and beverage revenues (excluding service charge income and gratuities) 74.8% 75.9% 99% 57.8% B. Percentage of food and beverage payroll and fringes to total food revenues only (excluding service charge income and gratuities) 13.7% 12.1% 139.6% 8.3% 4. service charge on food and beverage: A. Percentage (4 clubs) 19.5% B. Flat monthly charge (1 clubs) $55 5. employee meal allowances as a percentage of total food and beverage revenues 3.1% 6. menu pricing increase for the past fiscal year (9 clubs) 2.5% 7. A. percentage of a la carte food sales to total food sales 56.5% B. annual a la carte food sales per member (total members, excluding nonresidents) $1,3 8. A. food and beverage inventory levels: Peak Season (15 clubs) $92, Off Season (15 clubs) $75, B. Food and beverage inventory per member (total members, excluding nonresidents): Peak Season (15 clubs) $185 Off Season (15 clubs) $ net loss from food and beverage operations (net of all food and beverage expenses including payroll) <$165,> <$122,> 1

12 Personnel and Other Information 1. Annual base salaries for the following positions: Median Course and Grounds Superintendent $16, $18, Executive Chef 9, 92, Food and Beverage Manager 66, 61, Controller (14 clubs) 76, 75,5 Office Manager (4 clubs) 51, 48, Maitre D' (6 clubs) 48, 46, Membership Marketing Director (13 clubs) 44,5 47,8 2. Base salary of golf pro before additional compensation (13 clubs) $85,5 $82,5 3. Health insurance costs (15 clubs): A. percentage of health insurance premiums and costs to total salaries and wages 7% B. increase in health premium cost over previous year 7% C. percentage of premiums paid by club on behalf of employees (percentage of the total premium covered by the club) 7% D. percentage of premiums paid by club on behalf of employees dependents (percentage of the total premium covered by the club) (7 clubs) 65% 4. number of employees utilized in the following areas: Peak Season Off Season Golf course and grounds (15 clubs) 2 1 Restaurant and bar (non-kitchen) (15 clubs) 36 2 Kitchen (15 clubs) Clubhouse (15 clubs) 9 7 Office and administration (15 clubs) 5 5 Pro shop (15 clubs) 15 6 Other (13 clubs) 17 1 Total employees Employee productivity and utilization A. employee total hours worked (11 clubs) Kitchen/restaurant and bar 73,693 Golf course grounds 29,739 Pro shop 14,924 B. annual hours worked per employee (11 clubs) Kitchen/restaurant and bar 1,495 Golf course grounds 1,546 Pro shop 1,314 C. payroll and benefits cost per hour worked (11 clubs) Kitchen/restaurant and bar $18 Golf course grounds $21 11 Raise Your Expectations

13 Notes 14

14 RubinBrown Hospitality & Gaming Services Group RubinBrown s Hospitality and Gaming Services Group offers a full range of assurance, tax, business planning and consulting services to hotels, restaurants, golf courses, country clubs and retail industries. Beyond these traditional services, we also offer specialized knowledge of the industry and familiarity with specific challenges and issues encountered by country clubs and the hotel industry overall. Assurance and Accounting Services Audits, reviews and compilations of financial statements Preparation of comprehensive management letters Agreed-upon procedures concerning policies and procedures Audits of pension and 41(k) plans Adjusted Gross Receipts (AGR) audits Tax Compliance and Consulting Services Tax Compliance Preparation of Forms 99 and 99-T Federal, State and Local Tax preparation Internal Revenue Service examinations Tax Consulting Real Estate and Personal Property Tax Ongoing compliance Asset classification Cost segregation analysis Valuation review and assessment challenge Litigation support Sales & Use Tax Services Compliance and consulting Nexus (filing) requirements Voluntary disclosure negotiation Planning and structuring Sales & use tax refund review Examination representation Employment Taxes Consultation and compliance Policies and procedures development and implementation Tax credits Examination representation Consulting Services Enterprise Risk Management and Internal Audit Risk assessments and internal audits Sarbanes-Oxley compliance Internal control and operational reviews Policy and procedure development and documentation Corporate compliance audits Forensic accounting Information Technology Audit Payment card industry (PCI) data security standards review Information privacy review (Gramm-Leach-Bliley) IT risk assessment/planning IT audit project management General computer control review ERP and application audit System implementation controls design Pre and post implementation review IT security assessment Network and operating system platform specific services IT policy and procedure development and integration Financial Reporting SEC financial reporting IPO assistance Merger and acquisition assistance Business valuation Financial forecasts, projections, and budgeting assistance Cash flow analysis 13 Raise Your Expectations

15 Financing analysis and assistance Lost profit calculation and litigation support Profit improvement and statistical comparison analysis Market feasibility and economic impact studies Miscellaneous Franchise audits and related agreed upon procedures Vote tabulation Inventory controls and procedures analysis Membership, customer and employee surveys Information Technology Consulting Services MAS9 and Great Plains implementation, support and training Significant experience with POS and retail operating experiences Retail and Pro Shop inventory management system implementation System procedures and controls consulting Integration with other operating systems and general ledger packages Contact Chelle Adams, CPA Partner-In-Charge Hospitality & Gaming Services Group Jim Mather, CPA Partner Hospitality & Gaming Services Group Jeff Sackman, CPA Manager Hospitality & Gaming Services Group Meyer Saltzman, CPA Partner Hospitality & Gaming Services Group Todd Pleimann, CPA Managing Partner, Kansas City Office

16 Denver Office 166 Lincoln St. Suite 2 Denver, Colorado 8264 ph: fax: Kansas City Office 1975 Grandview Dr., Building 27 Suite 6 Overland Park, Kansas 6621 ph: fax: Saint Louis Office One North Brentwood Blvd. Saint Louis, Missouri 6315 ph: fax: For more information, visit