Smart Answers

When a Fee Hike Angers Club Members


Our private club raised overall monthly membership dues to cover a state golf sales tax. Some of our members don’t play golf and as a result are unhappy about “unfair taxation without representation.” Can we pass the tax on to our total membership, since we are primarily a golf club and 90 percent of our members play regularly? —F.G., Washington State

If your club is privately owned, you have the right to impose any rules or dues that you want—fair or not, says Arelene Spiegel, president of hospitality consultantcy Arlene Spiegel & Associates in New York City. It sounds like your dues increase, however, has been quite unpopular and could have been approached more thoughtfully, perhaps after a membership survey about how to handle the tax hike.

After all, if the increase has sparked grumbling, it could spur some of your non-golfing members and their friends to leave en masse—an outcome that might be devastating to any club, particularly a small business.

“Sure, you ‘can’ do whatever you want. The question is not one of ‘can’ but one of ‘should,’” says John Powers, owner of The Ranch Club, a private, residential golf community in Missoula, Mont. “As with most questions, it comes down to customer service and keeping the membership happy.”

If you have a committee that reviews fundamental club decisions, such as membership dues, consider involving them in this situation. They might vote on whether you should revisit the dues increase or communicate better why you had to increase dues to the membership as a whole.

DIFFERENTIATE AMONG PRIVILEGES

Another idea is to introduce a tiered membership system that creates a class of membership for non-golfers and defines benefits and club access over two or more price categories. “Non-golf membership usually allows for use of the facilities, such as the dining room, pool, and health club, but no or little golf privileges. Full memberships include priority access to golf,” Spiegel says.

Powers uses this kind of structure at his club, though he regularly encourages lower-level members to upgrade their memberships. “We have social members, golf members, and corporate members, who each pay different monthly dues,” he says. If you adopted such a system, only your golf members would have to pay the increased dues, since they would be the only ones incurring the golf tax.

If you decide to stay with one-level membership, consider offering your non-golfers some club credits or give them golf passes they can use for their guests, Powers suggests. “They should feel they are getting something for the dues increase,” he says. “You never know, your club may end up increasing food and beverage sales in the dining room by promoting golf or club credits.”

Karen_klein
Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.

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