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stayoutofthemiddle

Covid-19 Impact on Yacht Club Revenue and Financial Stability

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It's been discussed on here before that many yacht clubs are on shaky ground these days with an aging membership, lack of new blood, and a downturn in sailing participation in general compared to the heyday of the 80's and 90's.

Club revenue come from 4 main buckets:

1. member dues

2. member spend (bar / restaurant)

3. junior sailing / learn to sail programs

4. external functions (weddings & galas)

With items 2 - 4 on hold indefinitely what impact do you think this will have on the yacht clubs financial stability?

 

 

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22 minutes ago, stayoutofthemiddle said:

It's been discussed on here before that many yacht clubs are on shaky ground these days with an aging membership, lack of new blood, and a downturn in sailing participation in general compared to the heyday of the 80's and 90's.

Club revenue come from 4 main buckets:

1. member dues

2. member spend (bar / restaurant)

3. junior sailing / learn to sail programs

4. external functions (weddings & galas)

With items 2 - 4 on hold indefinitely what impact do you think this will have on the yacht clubs financial stability?

 

 

I'm going to go out on a limb and say 'bad'  

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On my winter club,  nil we'd just finished the season,.

The summer club, 

All renewed memberships would have been paid, so no loss there. 

The Sailing school is run at cost,  we want to attract new members,  so no loss there except a year of lost future members. 

We don't have a permanent bar,  but the T bar will be a big loss, as will the monthly functions where we do have an alcoholic bar. 

Regatta week is the big one, that's the first week in August, so what will be happening then is anyone's guess. 

PS our membership has been holding up well because of the sailing school..

 

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Item 4 is moot at my club.  We do very little of that.  Our 2nd biggest source of revenues after dues is revenue from our slip system.  Last I heard we only had 2 open slips for this coming season.

Galley/bar revenue is down but as we contract all that out to a caterer the financial hit is less than if we ran all that in-house.

Our club has a work or pay requirement.  12 hours of work per year or it is billed to your account at $20/hr.  Board members, committee chairs, RC, etc. exempt.  The Board is looking at that requirement in the wake of the current situation.

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On 3/24/2020 at 12:14 PM, The Q said:

The summer club, All renewed memberships would have been paid, so no loss there.

No short term loss; but if most or all of the 2020 sailing season is lost, members will feel that they received no real value for their dues, and some may be tempted not to renew next year. This will be especially true of members who have suffered redundancy and are under pressure to cut discretionary spending.

It’s tough to say what clubs can do to mitigate this. It would be great if they could refund all or part of member dues reflecting the lost time, but that is easier said than done. All clubs have plenty of fixed costs to pay, shutdown or not.

RN&SYC is a good club and I wish you well. I am a bit surprised to hear you say that the clubhouse has no bar; I remember the wine list was pretty good.

Of interest, what is a T bar? 

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1 hour ago, Svanen said:

 

No short term loss; but if most or all of the 2020 sailing season is lost, members will feel that they received no real value for their dues, and some may be tempted not to renew next year. This will be especially true of members who have suffered redundancy and are under pressure to cut discretionary spending.

It’s tough to say what clubs can do to mitigate this. It would be great if they could refund all or part of member dues reflecting the lost time, but that is easier said than done. All clubs have plenty of fixed costs to pay, shutdown or not.

RN&SYC is a good club and I wish you well. I am a bit surprised to hear you say that the clubhouse has no bar; I remember the wine list was pretty good.

Of interest, what is a T bar? 

Skiing thing?

Fancy club that one.

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its only a matter of time till members start resigning memberships for facilities they cant even use.

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^

THIS!

My main fear would be people not sending the check in this year and never coming back. The summer workers are screwed too, you don't get unemployment for a job you don't have yet.

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Yeah that’s the fear but if members care about the future of their club they’ve got to shoulder part of the burden.

My per annum dues are on the steep side and reflect a pretty large overhead the club has. In return for not being able to use the club and not access my boat, I’m expecting...er hoping quarterly spending (food and beverage) minimums will be scrapped, obviously launch and slip fees scrapped if there is no launch and a % discount if it’s a severely shortened season.

Other than that, suppose the club stays closed for 6 months. Do I deserve half my per annum fee back? No I don’t think so, at least not if it would put the club on very shaky ground.

Something like a 20-30% discount  on per annum fees pro rated on time lost would be fair, and members shoulder the rest of the loss, presuming the time loss is capped at say 2-12 months. After that, renewals could take a sharp loss.

Good times bad times and all that.

 

Edit: this might be wishful thinking as to whether the club can even absorb these discounts 

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2 hours ago, Mark Set said:

its only a matter of time till members start resigning memberships for facilities they cant even use.

Yep- I don’t know of a single member of a certain YC in SE QLD that is renewing their membership if they don’t own a marina berth. Stick a fork in it- they are done. A new club can rise from the ashes without the toxic culture.

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1 hour ago, LB 15 said:

Yep- I don’t know of a single member of a certain YC in SE QLD that is renewing their membership if they don’t own a marina berth. Stick a fork in it- they are done. A new club can rise from the ashes without the toxic culture.

Sometimes that phoenix has the best of intentions, but without new ideas/blood in the governance it slips back into its old feathers and is the same... 

Best of luck!  It will take a firm hand.

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6 hours ago, fufkin said:

If members care about the future of their club they’ve got to shoulder part of the burden.

Yes, that is the question.

if you are proud to belong to your club, feel a strong sense of attachment to it, and believe that it is well run and dedicated to serving the members’ needs, then you are probably willing to contribute to an extraordinary cash call.

On the other hand, if the club is merely a convenient place to berth your boat, you have few family ties or friendships there, and the leadership ignores your input or needs, then membership is a transactional relationship and you probably care little whether it survives or fails. When commercial marinas are available, why pay more than strictly necessary?

6 hours ago, fufkin said:

Something like a 20-30% discount  on per annum fees pro rated on time lost would be fair ... this might be wishful thinking as to whether the club can even absorb these discounts 

Probably wishful thinking. Few clubs can afford to provide discounts reflecting a prolonged shutdown (any significant reserves are probably already earmarked for ongoing maintenance projects or similar necessary expenses).

Edit: apologies for the italics: I must have inadvertently hit the wrong button.

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On 3/25/2020 at 4:42 PM, Svanen said:

 

No short term loss; but if most or all of the 2020 sailing season is lost, members will feel that they received no real value for their dues, and some may be tempted not to renew next year. This will be especially true of members who have suffered redundancy and are under pressure to cut discretionary spending.

It’s tough to say what clubs can do to mitigate this. It would be great if they could refund all or part of member dues reflecting the lost time, but that is easier said than done. All clubs have plenty of fixed costs to pay, shutdown or not.

RN&SYC is a good club and I wish you well. I am a bit surprised to hear you say that the clubhouse has no bar; I remember the wine list was pretty good.

Of interest, what is a T bar? 

It serves Tea.......and coffee, soft drinks,  snacks, bacon rolls for the first couple of hours.  Then filled rolls for lunchtime. They do salad meals during regatta week, and on special occasions the little kitchen in there produces 3 course meals for up to 70 people.

Our club has a rule made at the start of the last recession that if you lose your job. You can have a quiet word with the secretary,  and you can retain membership without payment. You are expected to pay from when you get a new job. Also Iirc once you retire your membership fee freezes from then on. Family membership including children and grandchildren under 8 is only £133 this year we are not an expensive club. 

As for our finances,  we were actually due to hold an EGM for the presentation and discussions about our new club house which is desperately needed. The club has been saving for some years for this, so the bank account looks good. However what delays may occur to the new building is anyone's guess.. 

Most of our members have been so for many years,  we also have many associate members,  who have retained that long after or never having sailed. Our membership is extremely loyal. 

I'll add we have no paid employees we are an entirely volunteer club. ,  a cleaner is contracted to come in the day after sailing and that's it.. 

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The big question for many - when you you know if a jr. program is doable and how hard will it be to staff it?

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1 hour ago, stayoutofthemiddle said:

Any updates on club health?

We’re still shut down.  Caterer is doing a couple of carry out meals.  One on TH, one on FRI.  Had a special take out dinner last week with all proceeds going to the bar and wait staff.

Launch day has been pushed back several weeks. Sailing school instructors are under contract and registration is open.  Adult sailing school is postponed and I would expect it to be canceled soon.  Classroom instruction time opportunity has about run out.

Annual dues have been billed and are due May 1.  Commodore made a special plea for members to hang in there.  Club has set up quarterly payment options for people.  Frankly our dues are so inexpensive that relatively I would guess that few people will take advantage of it.

Racing doesn’t begin for another month so that schedule is still in place.

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Just got notice our club was going to start launching boats. Clubhouse and deck will remain closed until further notice. Our new bar was promising but it sits with lights out. Dues and slip fees have already been paid, almost like business as usual.

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Just wait until the media shows pictures on TV of you guys enjoying yourselves safely, on the bay. That'll come to halt real quick... Under the new world order, responsible behavior = miserable.

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Our marina opened up April 1st. Now the bridge is voting today on whether to close it until further notice after I just brought 3 sailboats over to prep for racing and cruising. I figured they need the money from dry storage rentals. 
 

The junior program will be shitcanned and will save the club around $60,000 for 2 rib boats we almost signed contracts for in March. 
 

The bar and galley brought in a ton of cash and the club rental helped financially but with only the membership dues being directly withdrawn from accounts, our financial strength is limited. We won’t be buying a piece of property adjacent to the club for storage now...

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2 hours ago, stayoutofthemiddle said:

Any updates on club health?

We are still "shut down". You can grab a canoe or kayak off the rack, but not a Laser (weird MD rule, only paddling allowed). The bath house is locked up. No kind of scheduled activity is going on, but individuals may be in and out to check on their boats or just get some exercise.

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40 minutes ago, Joe CRYC said:

We are still "shut down". You can grab a canoe or kayak off the rack, but not a Laser (weird MD rule, only paddling allowed).

Don't disagree with Governor Hogan, only he knows best.  #wereallinthistogether, #stayathome

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Royal Canadian YC claims that “Entrance Fees are increasing on May 1, 2020. Act now and save up to 33%!” 

That increase seems spectacularly ill-timed. Not only is the club now completely closed on an indefinite basis, but when it eventually reopens the Island facilities will be subject to flooding (predicted to be even worse than last year): which will both limit their appeal, and probably result in another member assessment. Few sensible people will want to sign up for that.

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Our club is closed, but the 200+ boat slip marina is still open for use.  The club owns the marina so we have a good cash flow from slip fees, marina is full and about 95% are club members.   Bar and food service are also closed, those employees are laid off.  Marina and maintenance staff still on the payroll for now.

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At least in Australia, this is a once in 50 year opportunity to sort out your club finances.

As an insolvency/reconstruction lawyer, the last 6 weeks have been rather busy.

Everything from very large hospitality groups to companies that build and provide student accommodation.

If you are not doing a major re-structure you are just stupid and more debt you have the better the restructure now.

Every such club should come out of this better than when they went in.

 

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The UK is locked down for another 3 weeks so definitely nothing happening here.

Our and I suspect,  every other club in the area ( there's about 50) are having virtual  regular  meetings to review the situation.

  Our next big decision is for the 3 Rivers Race, the race committee is having a virtual meeting at the end of April,  for the event 30th-31st May.  I think it will be abandoned ( but I have no inside knowledge)  for the year, many of the guard ship crew are isolating like me, for the 12week period from the 23rd March which does not end till mid June. 

The inland fishing season starts 15th june, so that would be a problem for a delayed race.  Also the entire sailing season for the 50ish clubs is coordinated.  For instance our regatta week ( starting 1st August this year)  is proceeded by Wroxham's regatta week and we are followed by the Hickling broad regatta . You can sail / race at a choice places every day through out the school summer holidays. 

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