PEI PROPOSED CHANGE IN MEMBERSHIP MODEL: The PEI Golf Association has received notice from their three largest clubs that they will not renew their current membership in 2013 due to their perceived assessment of the inequity of the current membership model. Many courses in PEI are evading full reporting by claiming they only have a limited membership or no membership, while selling the majority of their green fees through packages or one day memberships. Stanhope, Summerside and Belvedere claim they will change the classification of their members for 2013, and only remit for those interested in competition. Belvedere has the support of their membership in this change. Stanhope and Summerside s owners are looking for an equitable model and putting pressure on the managers to under report. Currently there are 23 courses that hold membership in the PEIGA. The fees vary from $700 for public facilities to $12,000 from Belvedere with a total of 2590 members. The PEIGA believes there are at least 4000 people on the island that should be classified as members. The proposal is a flat fee ($240 per hole) for all golf courses. The flat fee would entitle the club and all of their members (of any classification ) to membership in the PEIGA/GC. An MSRP would be assigned to the individual membership and clubs would be encouraged to use the membership cards to recover their fees. The PEIGA has informed Golf Canada that we must cease offering a public player membership within their province during the pilot for this model to work. After further discussion and a recommendation from Golf Canada staff, we have agreed that there is also an opportunity to have member clubs distribute a green fee players card that would allow casual golfers access to posting scores to a maximum of 10 scores. Golf Canada feels that there is value in gathering the data provided through contact with these casual golfers, both for the association and for the golf clubs. GOLF CANADA S OPTIONS: 1. Accept the proposal, support the PEIGA s efforts to get the model enforced and incorporate data gathering tools to reach the casual golfer. 2. Deny the change and maintain status quo for our dues 3. Set a predetermined fee (based on current dues remittance) and insist the association pays that regardless of their membership dues model.
OPTION 1: The PEIGA believe this is a viable proposal and will be able to force most, if not all, clubs into membership because the island is small. Financial: In 2012 the PEGIA collected a total of $77,000 in dues, remitting $24,500 of this to Golf Canada. If the new model was adopted by all 23 clubs, PEIGA would collect $90,000 in 2013, $30,000 would be remitted to Golf Canada. The worst case scenario is the PEIGA could collect only $28,000 from the 10 clubs currently remitting more money than this model proposes, with $8,400 to GC. If the 10 at risk clubs listed in note 1 did not participate, PEIGA would collect $56,160, of which Golf Canada would receive $16,848. In summary, the financial risk to GC is approximately $8,000 in comparison to 2012 dues. The board should note that the PEIGA remittance in 2012 was approximately $3,000 less than in 2011 and could be considerably less even if the membership model is not changed. Other Risks If incorrectly positioned this pilot could provide other member clubs and provincial associations with leverage to force GC to accept a similar model. The elimination of the public player card and forcing membership in clubs could be seen as contrary to our inclusive brand ideal. The standardized fee is equitable regardless of their business model. The PEIGA maintains that they have a unique market in that 22 of the golf courses in PEIGA are not member owned and the business operators disagree with the current model. Opportunities: To test, and see what the number of reported members will be when a fee per golfer is not present. To test methods of improving value to members and member clubs.
OPTION 2 Golf Canada could resist any change to our dues collection model. This would leave the PEIGA with a few options: Not change their model and risk wholesale loss of membership revenue. Or change model but continue to remit $12 per member who is registered on the Score Centre. Financial Potential loss of dues revenue subject to success of PEIGA models. Other Risks: Essentially undermines the PEIGA proposed model. Encourages PEIGA to discourage players to register on the Score Centre Loss of partnership with the PEIGA. Loss of contact with current and potential members Loss of opportunity to measure other effective membership concepts No risk in other provinces/member clubs to change our dues model. OPTION 3 Golf Canada could arrange a set fee based on past remittances and require PEIGA to remit regardless of members. Financial: No opportunity to increase revenue through membership Other Risks: Prevents Golf Canada from taking a leadership role in changes the model. Sets a precedent for other provincial associations to request a similar arrangement and effectively bars. GC from direct contact and engagement with golfers. Dissolves the partnership approach to membership. Potential to force the PEIGA to bankruptcy if they cannot successfully implement their proposal and are unable to remit the contracted amount. Sets a precedent for other provincial associations to request a similar arrangement thus mitigating our immediate financial risk.
RECOMMENDATION: In light of pressure on Golf Canada to both review our current membership model and to engage more broadly with the public player we recommend that the board adopts the proposed membership model with modifications for the following reasons: There is a financial risk regardless of which option is selected This presents an opportunity to go beyond simply redesigning how dues are paid. The PEIGA pilot can be utilized to measure Golf Canada s potential value to the industry through connecting with the casual golfer. PEIGA estimates that there are 13,000 additional golfers on the island that will not be captured directly through club membership. Detailed in Note 2 regarding the Golfer s Card. Ideally the Golfer s Card could be upgraded to full membership and a portion of the fee would be remitted to the club that distributed the card however PEIGA feels that any form of access to membership except through a member club will defeat their membership proposal. Staff feels there must be a solution that meets PEIGA s concerns but does not compromise the Golf Canada brand ideal of being inclusive. This could be achieved through further discussions with PEIGA. If we proceed we would recommend that Golf Canada staff be directly engaged in promoting the membership model and value. This would be positioned as a pilot for fact gathering. The introduction of unlimited individual memberships for any member club would test the uptake on posting if there are no barriers. The base fee will determine the ability of courses to recover their membership fees. The golfer s card will assess casual golfer interest in score posting and the value of data collection. If we are successful in connecting directly to golfers we have potential to move to individual fees again, if this model is not successful.
Note 1: There are 8 clubs currently paying the same or more in fees. It can be presumed that the clubs currently paying more will willing adjust their current payment and remain members. Four provincially owned courses that are mandated to join the association should be relied upon however there is a risk that the provincial government could change the mandate. They are currently on the market for a new management company. One other property that currently pays significantly less than the new formula does have a large number of competitive players and will likely join despite the significant increase in fees. The risk remains that 10 clubs that currently remit significantly less than the proposed fee will not rejoin. o o Note 2: The concept of a golfer s card was recommended by Golf Canada staff. To be distributed at member clubs to green fee players, the card is one strategy to build engagement with the casual golfer, while also gathering valuable data. The Golf Canada Score Centre tracks all rounds of golf posted to the system. Hence we are able to track all Away Scores posted at any member club. Even at this point we have over 8000 away scores posted in PEI along with all the information on who played. The day, their gender, their age, their handicap. If we can encourage casual golfers to use the system we stand to benefit in the following way: 1. Increased engagement with the casual golfer. 2. Increased data on rounds played, by whom and where. The Member Clubs would also benefit in the following: 1. Casual golfers are driven to member facilities as locations they can post scores and determine their course handicap before play 2. Member Clubs could be provided access to the data to market directly to those already playing their course (note there is minimal data collection going on at most clubs). This could include membership offers, targeted events and golf lessons based on gender, age and handicap.