One of the most common questions we receive during consultation from consumers is the explanation of common dues programs for Florida clubs. Setting aside initiation costs, the dues structure is actually the most important factor for a club that is obtaining new members. Yearly dues are the lifeblood of the club, allowing it to function appropriately and fund the club officials’ yearly budget. Without a robust roster of dues paying members the club will have a difficult time sustaining.
To put this in perspective, dues, as a percentage of total operating revenues, have been benchmarked near the 62% mark. This simply means that for every dollar of operating revenue earned by the club, 62 cents will be derived from dues. This not only helps us appreciate the importance of dues to the health of the club, but also that dues by nature have to increase (at least somewhat) year-to-year due to inflation. On average, dues at the typical Florida club increased 3% in 2015, with nearly 75% of those clubs making the financial decision to raise annual dues for members.
We would tell the average consumer looking to join a Florida club to anticipate a yearly spend of $16,000 to be a member. For you financial planners out there, you will want to conservatively factor in a 2.5% year-to-year increase to that figure. Included in the initial $16,000 budget would be your annual dues, guest and cart fees, food/beverage, capital assessments, service charges, etc.
That being said, your initial club dues and initiation fees are but one piece to the puzzle. Accounting for 15-20 years of dues at your future club will be an important conversation to have with your financial planners.
What did we hopefully learn today? That dues structures are extremely important to understand when visiting a potential club’s membership director. At GLN, we suggest putting a pencil to paper and mapping out what you can allocate toward the next 20 Florida winters. But also remember that your participation in paying the dues on time will keep your future club financially sound and healthy. All in all, the common thought process among Navigator clients has been encouraging once they become educated on the industry: “If $16,000 a year is all there is between me and 80 degrees and sunny, where do I sign!”
“Be educated, be advised and be strategic”