Demographics, Data and the Future of Your Club (Frank Cordeiro, COO of Colonial Country Club)

Nearly half the clubs in America still have waitlists. Initiation fees are up. Capital projects are underway, seemingly everywhere. By nearly every measure, the private club industry is thriving. A lot of club leaders feel like it’s the result of years of hard work, smart decisions, and strong leadership. While that may be true in some cases, there’s certainly more to it than that and the dangerous assumption that can come from that thinking is this: We've finally figured it out.

Frank Cordeiro, COO of Colonial Country Club in Fort Worth and co-author of a recent Boardroom magazine piece with Club Benchmarking founder Ray Cronin, makes the case: boom times breed complacency. And complacency, he argues, is the quiet killer of organizations that should have survived.

The Private Club Industry Has Been Here Before

It's easy to look at today's membership demand and feel like a corner has been turned. But the data tells a more elaborate story. The Boardroom Magazine article points to US birth rate data by year to explain what's really driving the current boom. The average age for joining a private club today is approximately 42, according to data from both The McMahon Group and Club Benchmarking. When you map that against generational birth years, you see the industry's difficult stretch from roughly 2000 to 2017 coincided directly with Generation X, a significantly smaller generation compared to the Boomers, hitting prime membership age. The pool of prospective members simply shrank.

During that same period, Cronin and Cordeiro say many clubs drew the wrong conclusion. Club Benchmarking estimates that nearly half of clubs cut their initiation fees, assuming price was the problem, but it wasn't. As the article states directly, "clubs compete with the member experience offered, not the price charged." Reducing initiation fees didn't generate new members, it just cannibalized revenue and left clubs with less capital to invest in the very improvements that drive membership demand.

Now the Millennial generation, which is actually larger than the Boomers, is approaching that same prime joining age. Club Benchmarking's data shows that before the recent industry resurgence, only 25 percent of clubs had waiting lists. Today, just under 50 percent do. The demographic tailwind is real, and it arrived for every club in America, not just the ones with great leadership.

The Danger of Feeling Like You've Arrived

In this episode of Crushing Club Marketing, Frank put it this way: "No success or failure is permanent. When you have success, you have to work even harder than when you fail. And most people get it wrong."

He points to Kodak, Blockbuster, Nokia, and Blackberry. All were companies that were thriving industry leaders, until they weren't. Cordeiro argues that they were complacent during peak times, failed to look forward, and drifted from proactive decision-making to reactive crisis management.

If it can happen to corporate giants, it can certainly happen to private clubs. In fact, they may be especially vulnerable to it. As Frank and Ray write, "regrettably, during booms and crashes, industries tend to forget that most things in business, including the private club business, are cyclical."

They say, the clubs best positioned for the future, are the ones using this moment of strength to prepare for the end of the boom, not to celebrate it.

What the Next Generation Actually Wants

Here's where the strategic opportunity comes to life. The Millennial members filling today's waitlists are not just a larger version of the Boomer members clubs have always served. Their expectations, lifestyles, and definitions of value are totally different. The clubs that fail to understand that distinction will spend enormous capital building the wrong things.

The article highlights the rise of the dual-professional household and its impact on prospective club members. Add the acceleration of remote and hybrid work, and you have a member today who doesn't just want to play golf on Saturday. They want their club to be a place where they can work, exercise, meet colleagues, and spend time with their family, all in the same visit.

Colonial Country Club is one of the great clubs in the U.S. and yet Frank hasn’t been resting on his laurels. After analyzing the demographics of both current and prospective members, most of who live within three miles of the club, between 35 and 50 years of age, in dual-income households with at least one remote worker, Colonial converted a dining room into a shared workspace with a café, juice bar, breakout rooms, and an executive boardroom. For a club approaching its centennial, and host to one of the longest-running PGA Tour events in history, that's a significant statement about what forward-looking leadership looks like.

"It's not about instead of," Frank explained. "It's in addition to."

The Governance Problem No One Wants to Talk About

None of this planning happens without the right governance structure to support it. According to Frank and Ray, most clubs don't actually have a strategy. They have a list of capital improvements all dressed up in strategic planning language. "By definition," Frank said, "that's not strategic."

True strategic governance requires clubs to think in three-, five-, and ten-year increments. It requires leaders to understand the difference between simply replacing what you have and instead investing in what your future members will need. Club leaders need the discipline and courage to make data-informed decisions rather than reacting to the vocal minority.

Club Benchmarking's member survey data reinforces this challenge at an industry level: in nearly every club, there is tension between longer-tenured members who are satisfied with the status quo and newer, younger members who want the club to invest and evolve. The friction is real, and complacency almost always sides with the status quo.

The Competition Is Already Changing

As if the demographic argument isn't enough, consider the shifting of the competitive landscape. It’s not about the other clubs in town, it’s much more broad and diverse. Frank pointed to two Wall Street Journal articles published in the same month, both covering new entrants targeting the same prospective club members. In a nutshell, private equity firms and investors, including Goldman Sachs, are funding non-traditional social clubs, like the Soho House model, in cities and smaller markets. Add to the trend of luxury hotels that are converting spaces into private club environments within their properties.

The private club industry is not alone in its desire to attract this new, younger member. And people with capital and a taste for disruption are also in hot pursuit of this demographic who is looking for social connection and curated experiences. Private clubs have a head start and, perhaps, a built-in advantage. But that advantage will shrink fast if clubs spend the next five years standing pat rather than looking forward.

Now Is the Time

The decisions being made in boardrooms today will determine whether clubs are relevant to the members they'll be recruiting in 2030, or whether they'll be scrambling to catch up. Those clubs that are simply replacing worn out amenities will lose to those who are replacing amenities with what members will want in 5 or 10 years from now.

Frank said it simply at the end of our conversation: being bold just for the sake of it is dangerous. But "analyzing data, looking into the future, asking the right questions and developing a thoughtful strategy for success is not scary, it's exciting."

The private club industry has a genuinely remarkable opportunity ahead of it. The question for every club leader right now is not whether the good times will last. It's whether you're using this time wisely enough to earn what comes next.