Enhancing Resort Profitability with a Membership Program
A club membership program could be the "golden ticket" to enhancing a resort’s profitability. It may provide a resort owner with:
- Membership sales proceeds;
- Stable source of operating revenue through annual dues;
- Increased area resident usage of restaurants and other amenities; and
- Member referrals to resort's accommodations for friends and family.
This enhanced profitability is often accomplished without significant investment in facilities, but rather with club members using excess capacity. In addition, the resort can often service members primarily with existing management and accounting staff, so that the membership program does not add significantly to employment costs. The primary additional personnel are a membership director and an activities director, and possibly additional support staff if justified by membership revenue.
Resort management's primary concern with a club program is that member usage of amenities can lead to crowding, which adversely impacts guests. However, member usage and resort guest usage of amenities are often complementary. Club members often play golf or use a spa earlier in the day than resort guests. The ideal situation is a resort that attracts primarily business clientele on weekdays for accommodations and working people for the club on weekends, or a resort whose rooms are filled on weekends attracting area retirees as members who use the club on weekdays. Capacity analysis should be undertaken for all amenities, reflecting peak usage periods to determine the ideal number of members. Members' use privileges and benefits can be tailored to encourage member usage of underutilized amenities and to discourage usage during peak usage periods of amenities that have limited excess capacity.
The resort should not assume "we will build it, and they will come." A resort will not recoup marketing, membership document and membership office costs, let alone make a profit, unless the resort generates membership sales and dues. Therefore, a resort that is considering a membership program should research membership marketability for the area and retain knowledgeable professionals to develop, document and market the program.
As resort managers struggle to fill guest rooms, the key to profitability could be in the amenities, not the guest rooms. The "golden ticket" could be a club membership program for a golf course, tennis courts, beach club and/or spa that previously added more to the expense than the revenue side of the profitability ledger