R E S E A R C H A N D I N S I G H T S F R O M T H E L E A D I N G A D V I S O R S I N G O L F J A N U A R Y 2 0 1 6

2016 Board Wish List

Survey Results

Insight | Strategy | Success

Page 1 of 13

2016 Board Wish List Survey Results

Executive Summary The most recent GGA Pulse Survey, ‘2016 Board Wish List’, was designed for Club Managers to evaluate their Board members’ current knowledge on a number of topics including Membership, Governance and Strategic Planning. The objective of the survey was to identify gaps between current knowledge of Board Members compared to the desired level of knowledge that Club Managers would like their Board to achieve. The results of the Survey revealed the following key findings: Long-Term Strategic Planning and Finance

Managers wish their Board Members would develop a deeper awareness of the Strategic Plan and use it to guide discussions. The two biggest gaps between current rating and desired rating of Board Members are related to the awareness and use of Strategic Planning at each Club.

Board Member knowledge of current Debt, Capital and Overall Financial Position is strong overall. However, knowledge of future Capital Needs and Plans is one of the largest gaps between actual and desired knowledge.

Roughly 3 out of 4 Club Managers describe their Club as ‘Financially Stable’. Only 4.5% described their Club as ‘Financially at Risk’ while the remaining 19% described their financial position as ‘Somewhere in Between’.

Governance

Utilization measures for Club facilities and other KPI’s received a very low Board Member knowledge rating. ‘Performance Dashboards’ or similar tools issued to Board Members during meetings will help to improve Board Member knowledge in this area. ‘Performance Dashboards’ are not widely used among survey participants, though the majority of Managers indicated that they believe it would improve the quality and effectiveness of Board meetings.

4 out of 5 Club Managers believe that their existing Governance Model serves the Board and Club effectively. Despite the high satisfaction among Club Managers, the majority of Managers reported that they do not evaluate Board Members’ performance at the end of each year and Board Members do not self-evaluate at the conclusion of each meeting.

Page 2 of 13

Membership

Topics related to Membership and Pricing received satisfactory rankings from Club Managers and can be improved in all areas. The largest gap between current and desired knowledge ranking is ‘Relevance and Member Satisfaction’.

Approximately half of the responding Clubs experienced a net increase in Full Member Count during 2015, while another 32% experienced ‘No Change’ in Full Member Count. The Full Member category is full at approximately 1 out of every 3 Clubs. Of the Clubs that are at capacity, 85% have a waiting list of joining members.

The natural attrition rate for the Full member category in 2015 averaged 6.4%, slightly higher than the traditional benchmark of 5%.

The average Full member price increase expected for 2016 is 2.94% for base dues and 3.45% for capital maintenance fees. Only 1 out of 4 clubs are considering a capital assessment for 2016.

Page 3 of 13

The survey asked managers to rank their Board’s current knowledge in various areas relative to the level of knowledge they desire (or wished) their Board had. The greatest variance represents the areas or topics that managers wish their Board would become more knowledgeable.

Table 1: Board Knowledge Average Rankings

‘Wish List’ Results

Board Knowledge Weaknesses

1. Use of Strategic Plan to Guide Discussions

2. Awareness of Strategic Plan

3. Future Capital Needs and Plans

Topic Current Rating (out of 5.00)

Desired Rating (out of 5.00) Difference

Use of Strategic Plan to Guide Discussions

2.87 4.53 1.66

Awareness of Strategic Plan 3.14 4.58 1.44 Future Capital Needs and Plans 3.21 4.51 1.30 Utilization Measures for all Club Facilities 2.88 4.16 1.28 Other KPI's (Average Spend per Cover, Rounds of Golf, etc.)

2.65 3.90 1.25

Awareness of Club Policies and Bylaws 3.32 4.46 1.14 Relevance and Member Satisfaction 3.37 4.50 1.12 New Member Prospects and Conversion Rate

3.07 4.12 1.05

Market data on Competitor Clubs 3.06 4.05 0.99 Changes to Member Profile at the Club 3.16 4.15 0.99 Changes to Demographic Profile of Area Surrounding the Club

3.11 4.08 0.97

Current Capital Position and Priorities 3.80 4.65 0.85 Resignations and Reason for Leaving 3.52 4.35 0.83 Club’s Financial Position and Debt Obligations

4.08 4.71 0.62

Board Knowledge Strengths

1. Club’s Financial Position and Debt Obligations

2. Resignations and Reason for Leaving

3. Current Capital Position and Priorities

Page 4 of 13

Survey Results The following is a question-by-question summary of all questions from the 2016 Board Wish List Survey. The survey was completed in full by 174 respondents, plus an additional 102 partial completions, for a total of 276 total responses. Performance Dashboards Some clubs are now utilizing performance ‘dashboards’ that are distributed to Board members in advance of Board meetings. This tool should be customized to your Club’s needs to educate your Board on the key performance indicators that matter most. It can also be beneficial by keeping Board meetings more focused and preventing meeting time from running over. Q. Does your Club use the approach described above for your Board meetings? Do you believe your Board of Directors would be interested in such a ‘dashboard’? Would such a tool would improve the quality and effectiveness of your Club’s Board meetings? Only one out of three (32%) respondents use this type of approach during Board meetings, despite the majority of respondents (68%) indicating that such a tool would improve the quality and effectiveness of their Club’s Board meetings. Six out of 10 (60%) respondents believe that their Board of Directors would be interested in utilizing this type of tool.

Board Knowledge Q. For each of the following topics, please select the ranking that best describes your Board Members’ current level of knowledge compared to your desired level of knowledge for the Board ("1" = Little Knowledge; "5" = Excellent Knowledge)

31.7%

59.9% 68.0%

68.3%

40.1% 32.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Currently Use Board Interested? Improve Qualityand

Effectiveness?

Chart 1: Performance Dashboards

Yes No

Page 5 of 13

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

Awareness of Club Policies and Bylaws

Awareness of Strategic Plan

Use of Strategic Plan to Guide Discussions

Club’s Financial Position and Debt Obligations

Current Capital Position and Priorities

Future Capital Needs and Plans

Chart 2: Long-Term Planning and Governance Ratings

Current Rating Desired Rating

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00

Resignations and Reason for Leaving

New Member Prospects and Conversion Rate

Relevance and Member Satisfaction

Changes to Member Profile at the Club

Changes to Demographic Profile Surrounding the Club

Market data on Competitor Clubs

Chart 3: Membership and Pricing Ratings

Current Rating Desired Rating

Page 6 of 13

Of the managers that provided ratings to the previous three sections, approximately 20% commented on an area for Board improvement that was not included in the lists above. The issues that were brought up most often were the Relevancy and Utilization measures for Fitness Centers, Food and Beverage profitability, and Human Resources / Compensation. Governance Q. Does your existing governance model serve the Board and Club effectively?

Four out of five (79.5%) respondents indicated that their existing governance model is effectively serving the Board and Club. For the managers who indicated ‘No’, the governing challenges that came up the most are as follows:

o Separating operations from Policy – Governing rather than managing o High Board and President turnover o Outdated policies/bylaws and the absence of a Board Policies Manuel and

effective Strategic Plan. Q. Are the criteria for membership satisfaction and other qualitative metrics based on objective measurement? Please provide a ranking between 1 and 10, with '1' being 'Completely Subjective' and '10' being 'Completely Objective' The average rating was 6.23 out of 10, while 47% of all respondents ranked their club as either 7 or 8 out of 10. These results indicate that the majority of managers are not fully satisfied with the criteria in place to measure qualitative metrics at their Club.

0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50

Utilization Measures for all Club Facilities

Other KPI's (Average Spend per Cover, Rounds of Golf,etc.)

Chart 4: Utilization and Key Performance Ratings

Current Rating Desired Rating

Page 7 of 13

Q. Does the Board self-evaluate its performance at the conclusion of each meeting? Do you evaluate the Board’s performance at the end of the year? An overwhelming majority of respondents (96.2%) indicated that their Board members do not self-evaluate after each meeting. Similarly, three out of four managers (76%) do not evaluate their Board’s performance at the end of the year. Q. Please identify the current size of your Board and the number of standing committees currently at the Club: The average Board size is 11.16 members, while the most popular Board size is nine members (32%). The average number of standing committees is 8.25 members, while the most popular number of standing committees is seven members. The distributions are presented below:

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

1 2 3 4 5 6 7 8 9 10

3.6% 3.0%

8.3%6.5%

12.5%10.7%

20.8%

26.2%

3.6%4.8%

Rating

Chart 5: Member Satisfaction Objectivity

3.8%24.2%

96.2%75.8%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Board self Evaluates eachmeeting?

Manager evaluates Boardannually?

Chart 6: Board Evaluation

Yes No

Page 8 of 13

Q. Do you believe your Club has: a) Too many standing committees, b) Just the right amount of standing committees, or c) Not enough standing committees? Seven out of 10 (70%) respondents believe their Club has the right amount of standing committees. The remaining 30% of respondents were split between those that indicated there are too many (20%) or not enough (5%) standing committees. Consent Agendas are a powerful tool used to streamline meeting procedures by collecting routine, non-controversial items into a group whereby all are passed with a

0% 5% 10% 15% 20% 25% 30% 35%

Less than 9

9

10 to 11

12 to 13

14 to 15

More than 15

11%

32%

16%

22%

12%

7%

Chart 7: Board Size

0% 5% 10% 15% 20% 25% 30%

Less than 4

4 to 5

6 to 7

8 to 9

10 to 12

More than 12

8%

20%

25%

17%

17%

13%

Chart 8: Number of Committees

24.9%

69.7%

5.4%

Diagram 1: Standing Committees

Too many standingcommittees

Just the right amountof standingcommitteesNot enough standingcommittees

Page 9 of 13

single motion and vote. Consent Agendas are now widely used in the corporate and not-for-profit sectors, but not as frequently in private clubs. Q. Is your Club currently using a Consent Agenda or a similar tool during Board Meetings? More than six out of ten respondents (62.5%) do not use a ‘Consent agenda’ or similar tool during Board meetings. General Questions Q. Select the option below that best describes the financial position at your Club: Approximately three out of four managers (76.5%) identified their Club as ‘Financially stable’, while only 4.5% of managers flagged their Club as ‘Financially at Risk’. Two-in-ten (19%) respondents identified their club’s financial position as somewhere in between stable and financially at risk. Q. What do you believe your Full member percentage price increase will be in 2016 for the following categories? The average expected annual dues percentage increase among participating clubs is 2.94%. The average expected capital maintenance fee increase among respondent clubs is 3.45%, although nearly two out of every three clubs indicated there would be no increase to capital maintenance fees.

76.5%

4.5%

19.0%

Diagram 2: Financial Position

Financially Stable

Financially at Risk

Somewhere inbetween

Page 10 of 13

Q. Are you considering a capital assessment during 2016? Three out of four managers (74%) are not considering a capital assessment during 2016. Q. Are your Full membership categories full? One out of three managers (32%) reported that their Full membership category is full at the current time. Only 23% reported a current waitlist to join.

0%

5%

10%

15%

20%

25%

30%

35%

0% 1-2% 3% 4-5% Morethan5%

17%

22%

30%

25%

7%

Dues Increase

Chart 9: Annual Dues 2016 Increase

0%

10%

20%

30%

40%

50%

60%

70%

0% 1-2% 3% 4-5% Morethan5%

65%

8% 10%6%

11%

Capital Maint. Increase

Chart 10: Capital Maintenance Fee 2016 Increase

0% 5% 10% 15% 20% 25% 30%

0

1 to 10

11 to 25

26 to 50

51 to 100

Over 100

15%

19%

26%

13%

9%

19%

Chart 11: Waitlist Size

Page 11 of 13

The average waitlist size for clubs that have reached capacity of their Full membership is approximately 60 prospective members.

Q. In 2015, did your Club have: a) A net increase in Full membership, b) A net decrease in Full membership, or c) No change Approximately half of all managers (48%) reported that their Club realized a net increase in Full membership count, while only one in five managers (19%) reported a net decrease in Full membership count. Q. What is your natural attrition rate percentage for 2015? (i.e., number of member resignations for Full members divided by total Full members) The average Full member attrition rate in 2015 was 6.39%, while half of all respondents indicated an attrition rate between 2% and 5%.

0%

5%

10%

15%

20%

25%

30%

Less than2%

2-3% 4-5% 6-7% 8-10% More than10%

8%

26%24%

13%

17%

11%

Natural Attrition Rate

Chart 12: Natural Attrition Rate: Full Members 2015

48.0%

19.2%

32.8%

Diagram 3: Membership Change

A net increase inFull membership

A net decrease inFull membership

No change

Page 12 of 13

Respondent Profile The respondent clubs originate from 38 States and 4 Provinces. The diagrams presented below illustrate the profile and characteristics of the groups of clubs that participated:

Of the 15% of respondents who commented on other amenities at their Club, the most common responses were beach activities and croquet.

83%

2%3%

11%

Diagram 4: Club Type

Private

Semi-Private

City Club

Other (pleasespecify)

80.8%

8.2%7.5% 3.4%

Diagram 5: Number of Holes

18-holes

27-holes

36-holes

More than 36-holes

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

EquestrianCurling

Beach ClubShooting and hunting

Marina/yachtingAccommodations

Bocce ballOther (please specify)

Child CareSpa services and facilities

Other racquet sportsFitness and Wellness

TennisSwimming pool

Golf practice facilitiesGolf course

1.8%3.0%4.3%4.9%

9.8%11.6%

14.0%15.2%16.5%

22.6%32.9%

56.1%73.8%73.8%

86.0%88.4%

Chart 13: Amenity Profile at Clubs

Page 13 of 13

ABOUT GLOBAL GOLF ADVISORS Global Golf Advisors provides highly specialized consulting services to the international golf, private club, real estate, resort, and investment communities. Headquartered in Phoenix (US), Toronto (Canada) and Dublin (Ireland), GGA offers its services in five strategic categories: i) Corporate Strategy, Financial Engineering and Transaction Advisory, ii) Governance Services, iii) Performance and Operations Consulting, iv) Club Membership Programs & Solutions, and v) Strategic Marketing and Business Planning. The firm takes a 360-degree view of financial, management and operational issues before developing a strategic plan that establishes benchmarks for success and identifies potential outcomes of recommended actions. In its 23-year history, GGA has consulted on more than 2,700 golf-related projects worldwide. For more information, please visit www.globalgolfadvisors.com or call 1.888.432.9494.

I N S I G H T | S T R A T E G Y | S U C C E S S