Private Club Radio Show
Welcome to the Private Club Radio Show, the industry's weekly source for education, news, trends, and other current developments in the world of private clubs.
Hosted by the talented entertainer and industry expert, Denny Corby,
the podcast offers a unique perspective on the private club industry, featuring expert guests, product spotlights, predictions, and more.
Whether you're involved in a golf club management, yacht clubs, athletic clubs, or business clubs, the Private Club Radio Show is the essential podcast for
anyone seeking valuable insights and information on the latest trends and developments in the private club industry.
Private Club Radio Show
447: What Your $300K Racket Budget Really Gets You w/ Ed Shanaphy
Ever wondered why your club's racket department seems financially constrained? In this eye-opening episode, consultant and racket management expert Ed Shanaphy lifts the curtain on the numbers rarely discussed in polite club company.
The financial anatomy of a racket department is more complex than most realize. Shanaphy reveals that nationally, racket departments typically receive just 3% of a club's overall revenue – translating to about $300,000 for a club generating $10 million. More critically, payroll shouldn't exceed 55% of that figure, leaving just $165,000 to staff an entire department. These constraints explain why directors must be creative with limited resources.
Rather than defaulting to discounts, Shanaphy advocates strategic revenue growth through thoughtful promotions. "If you come to your ladies practice, 50% off Sophie Bella clothing," he suggests as an example that drives both participation and sales. This cross-selling approach delivers more value than random price cuts while building stronger member engagement.
The conversation explores compensation structures, housing considerations, and how top professionals approach the business side of racket sports. Shanifee draws important parallels to golf management, noting that understanding operations beyond teaching is crucial for long-term success. "I strung a lot of rackets at midnight so members had them at 6am the next day," he recalls, emphasizing how these experiences shape exceptional club professionals.
Looking toward 2025, Shanaphy identifies dynamic pricing as an emerging trend. Just as hotels and airlines adjust prices based on demand, forward-thinking clubs are considering charging premium rates during peak hours while offering discounts during traditionally slower periods. This approach maximizes both revenue and facility usage – though implementation requires sensitivity at member-owned clubs.
Whether you're managing rackets at a prestigious club or simply curious about the business behind the sport, this conversation provides invaluable insights into creating sustainable, profitable racket programs that enhance the overall club experience.
Follow us on the socials
Private Club Radio Instagram
Private Club Radio Linkedin
Denny Corby Instagram
Denny Corby Linkedin
Hey everybody, welcome to the Private Club Radio Show, where we give you the scoop on all things private golf and country clubs, from mastering leadership and management, food and beverage excellence, member engagement secrets, board governance and everything in between, all while keeping it fun and light. Whether you're a club veteran just getting your feet wet or somewhere in the middle, you are in the right place. I'm your host, denny Corby. Welcome to the show. What do payroll percentages, pickleball courts and windex have in common? Nah, it's not the start of another bad dad joke. It's another day in the mind of Ed Shanifee, and in this episode we sit down with one of the most honest, entertaining and wickedly smart minds in the business. He's from New England, so he had to say wickedly smart. Ed is a consultant, a coach, a club pro lifer and possibly the only guy who can make racket department budgeting actually fun to listen to. Ed's been in the trenches, from stringing rackets at midnight to negotiating club contracts, to moderating panels at national tennis conferences. He's the real deal and he's not afraid to say the quiet numbers out loud. He's been on the show before and we're excited to have him back. We get into why your racket department might be accidentally bleeding money, what a $3,000 racket budget really gets you. And, spoiler alert, it's not a Rolex, which is really unfortunate. We also go over what clubs are doing right and totally wrong when it comes to hiring and budgeting for your rackets. We talk about how to stretch your resources without snapping your strings. We go over dynamic pricing, club politics and really all of this is just how to turn a struggling rackets department around without slashing prices or tossing out discounts like it's candy, because that's just not fun and not profitable. And I am super stoked to dive into this episode with Ed because we just go over the real stuff. It's really good and I can't wait.
Speaker 1:Before we dive in, a quick thanks to some of our show partners. You hear about them in the ads Kenneth's member vetting, golf Life Navigators, members, first Club, capital Group, concert Golf Partners, as well as myself, the denny corby experience. There's excitement, there's mystery. Also there's magic, mind reading and comedy, a lot of laughs, gasps and holy craps. If you want to have one of the most fun member event nights for your club, head on over to dennycorbycom and then, really quick, I gotta tell you about something really special and that I'm very passionate about and super excited for it's something that I'm putting together on Monday, september 22nd.
Speaker 1:It's called Management in Motion and honestly, it's not your typical leadership event. It's happening at Monticello Motor Club and it's for private club professionals who want to learn, connect and maybe burn a little rubber along the way Think drag racing, high-speed runs, drifting, karting and, yeah, some killer leadership talks as well. This is the only leadership event where you learn high-octane lessons, then literally hit the gas. It's part leadership summit, part track day and 100% unforgettable, with education and real lessons from other club professionals, but not just that club professionals who also go on the track. So we're going to talk about how club leadership relates to what we're doing on the track. And the track day. It is going to be absolutely insane.
Speaker 1:All your food is included, I have a poker night, there's prizes, there's giveaways. This is literally unlike any other club management event retreat, whatever you want to call it. You've done. I'm super stoked. If you want to learn a little bit more, head on over to privateclubradiocom slash management in motion, or just privateclubradiocom slash MIM, m-i-m for management in Motion. There's a quick little video on there, two minutes. Check it out. It'll give you all the details. I promise this will be one of the most fun things you will do all year, guaranteed. And this event is exclusive and limited to only 50 people, so make sure you sign up. Enough about that, though. Well, I do want you to come, so don't forget it. Up enough about that though. Well, I do want you to come, so don't forget it. But enough about that. Let's get to the episode. Private club radio listeners. Let's welcome back to the show ed shanify.
Speaker 2:What was that panel on we? You know they asked us to like they asked us about patricio mistrano and myself were both leading directors. We were. Now we've both left direct, you know, left that and gone on to consulting. So they wanted to like talk about being a director. So we made it the challenge, the challenges facing a director in today's modern business world. We try to focus on business. You know those conferences really have a lot of uh seminars on how to, how to coach, what wording to use, how to you know new programming ideas and we tried to really focus on business. Like percentages of payroll right, like total gross revenues of a club versus your budget for racket's department. What should that be compared to your gross club revenue, food and beverage budget? Those kinds of things.
Speaker 1:The stuff that people want to know and should know, but no one talks about.
Speaker 2:Exactly, I mean, and I shared a couple of big numbers and people are like, whoa, that's a great number. Thanks, ed.
Speaker 1:What can you? Can you share the numbers? What are those numbers?
Speaker 2:My number is is in terms of payroll right. So anytime I look at my gross revenue for my, my department, payroll cannot be over 55%. And when I say payroll I also mean like total cost of employees. Like, for example, um, if you're going to include housing, if you have to house your employees, that's part of for me, that's part of payroll.
Speaker 1:Okay, so so can you, can you like break it down? Can you give like, let's just say it's a club doing 50 million or so, you know, or like, can you? Give like a fake scenario of like, of, like, the breakdown from like the large number down to like the rackets. And then what? What you're?
Speaker 2:talking about yeah, so so basically, if exactly right, so say you're at a, say your club's a million dollars, just to make it easy, right, million dollars. I was trying to sound bougie with 50, but yeah, a million is much better. Bougie with 50, but yeah, a million is much better. Okay, I mean, I'm just just in percentage wise of that total club revenue, the the rackets department budget. It should be higher, but national average is three percent of that, so you would be at 300 000.
Speaker 1:Crazy small right well, no less than that right.
Speaker 2:Yeah, you're right, sorry. Uh, 30 000, yeah, so let's do it. Let's do a 10 million. Let me just get my calculator out here.
Speaker 1:It's early in the morning I'm horrible at math too, and I was like wait a second, wait a second, let's do 10 million right.
Speaker 2:10 million, I think it's stiffed. I'm gonna, I'm doing it on my calculator. 10 million times, uh, three percent, three hundred thousand dollars, that's what I mean. 10 million dollars is your full revenue, club's revenue, food and beverage, everything golf. Your budget for your rackets department is $300,000. That's the national average. Now, out of that, 55% is your max for payroll $165,000. It's not a lot, is it? So that's where we're really squeezed as a rackets department.
Speaker 1:Because in that also you probably have to account for you know you can't just hire one person at that number or two people at half, that you have to go less because of insurances and just you know all the other things I mean.
Speaker 2:I look at you know travel expenses. You know I pay my guys. They're coming into the clubs for the summer. I pay their expenses to go to get there. So yeah, there are costs there. You can say that's a cost of doing business, not payroll, but I kind of lump it into payroll. I'm a toughie.
Speaker 1:Is now 3%. Like you said, that's average. Is that a good number? Do you think it should be higher? And obviously it probably varies on the club. Some clubs take rackets a lot more serious than maybe other clubs, so is 3% good? I?
Speaker 2:think 3% is low. But tennis is always in rackets. Pickleball now Padel is always an amenity to a golf club, country club, it's just secondary and so you know they're not going to give us a ton of money. But hey, it is what it is. You work with what you have. You're always fighting, you know. That's why I kind of like running tennis-only clubs or rackets-only clubs. I don't have to fight for housing with food and beverage.
Speaker 1:You know, yeah, yeah, with food and beverage. You know, yeah, yeah. So what was the takeaway from, like, the audience, what were they walking away from that? You know how were they feeling and, yeah, go ahead. And then the follow-up question is gonna be how do they, how do you start that conversation to get that number higher and move things in a more positive direction?
Speaker 2:Well, that came up because that was a follow-up question by them. Great, Well done, Denny. So the people actually really enjoyed that. The people loved it because we dealt with actual business scenarios. We weren't saying hypothetically, we're saying this is what your percentage should be, this is what you know, this is how many people we could actually hire with that figure. This is that kind of thing. The, the follow-up question was and it was part of our presentation was how do you justify your budget, you know, to the, to the governors or to your management? And I said look, we're, we're, we're inexpensive department to the membership. Like you don't have a tennis minimum, you have a food and beverage minimum, but you don't have to take tennis lessons, but you have to eat at the club, right? So we don't cost the members that much. And so I use that as a real talking point is that there's no minimum for the tennis or rackets department. There's no minimum for the golf department, only for food and beverage, because food and beverage is so expensive. Yeah.
Speaker 1:So from that makeshift $300K, you said no more than 55% being used on personnel. If you work with clubs all the time, okay, so you go into a club. That's their number. Where is your head at? How are you going to get the most bang for buck for that $300K? Lots of ways.
Speaker 2:First of all, you, you going to get the most bang for buck for that 300K. Lots of ways. First of all, you got to grow the revenue right, because you're going to make more money, the bigger the program, right. So your budget, that's your budget, that's your cost analysis right. But if you can actually have more people on the court, the more people you have on the court, the more that revenue. What your cost foundation is, your payroll will go up, because there's we work on commissions as as pros right, golf and tennis and any pro so yeah, but the club and you as a director and you as an employee will make more if you're busier and you're, you're getting more of a commission. So I always try to grow the revenue. Where can we grow revenue like?
Speaker 2:Just just for example, today, one of the clubs called me this morning. They said had we've got tons of Sophie Bella in clothing. I'm like, okay, well, let's put it on sale. Well, hold on, slow down. Why put it on sale right now? Was it March 1st, february 28th, whatever? Let's tie something into that. So my manager there said what do you mean? I said, well, let's think about this. What do you mean? I said, well, let's think about this Last week ladies teams we have six of them Practices were a little slow. So this week if you come to your ladies practice, 50% off. Sophie Bella, now you see that's including. So I yeah, I try to cross sell all the time, right.
Speaker 1:People. People get addicted to discounts. They don't get addicted to like free, or when there's and and I'm a, I'm a big fan of like, instead of discounting per se but like, how can you, you know, add more to it? Or like, hey, you, you can get it, but you still have to do x, y and z. There still has to be some other aspects to it. So that's great. Instead of just going, oh, discount, it's like. Now, there's like something to it, there's some like enticement, there's some, you know, now it puts people like over the edge, like, oh, now, oh, of course, I'm definitely gonna go now. Like they're gonna make that a little bit more conscious effort, because people love a good sale too.
Speaker 2:They love a good sale, but I'm not gonna give the sale away for nothing, right?
Speaker 2:so you know it's the same with you know bogo. You know bogo, buy one, get one free. You've got to buy two. Your average order goes up. I love combining. If I know my singles championship is slow, it doesn't have a lot of signups, I'll say, hey, if you sign up for the singles we'll string two rackets for free. It just gets more people on the club property, right? But I love, when I'm doing clothing sales, to take that, so I do. The first one I have is my big spring camp. I have, you know, 60 people, eight pros, eight courts going and everybody in camp gets 15% off clothes that week, free private lesson with any of the guest pros, right, 20% off stringing because it's all tune-ups. You know we're all seasonal clubs, so um and boy does that. And a free lunch. And but there's no such thing as a free lunch, right, because you're paying for camp. I've built the price of the lunch into the camp price, partially, right yeah, no, that's, it's.
Speaker 1:Uh, there's a really great book that I have uh called 100, 100 million dollar offers. Uh, that's great it. I'm going to read that, which is just all about just like offerings. I'll send you the link and link in show notes. But no, it's just. And there's another one. It's like there's other books, books like it. But it's just like hey, how do you bundle it together? How do you make it so like, how do you make the offer so good? People feel dumb saying no Right.
Speaker 2:Exactly, and we're doing it just in simple ways too. You know, buy five lessons, get a six for free. You know, a new pro comes in, I really want to get his or her book filled. So I'll say, hey, there's a discount on this pro, right, and that takes business sometimes away from one of my established pros. But the established pros know so many people, so you're going to get another opening hour of an established pro. That someone, someone will fill that hour, but you've moved somebody that you know to a new pro that nobody knows.
Speaker 1:Yeah, no, and that's, and that's a great way to.
Speaker 1:You know, quote unquote, like, share the wealth also, but like, but I feel like then it's, it's getting. You know, I'm I'm big on getting different perspectives, different takeaways, because everyone teaches and does things a little bit different and people connect with different people. So you might always go to the pro, but if there's the new person who comes in, it's like, hey, but you might actually click really well with them and they might be able to fix this one little tweak that maybe the pro didn't do yet or they just have that different way of describing something. Like. That's also a big thing is, you know, the pro might say something the same thing over, but it doesn't click. But then someone else says it a slightly different way and you're like, oh, now I get it and that's what it just takes that.
Speaker 2:That's what the there was this one seminar there that was talking about. That is how you, if it's not working, Try another way, Try another word, Try another curve, Try another. You know it's. There's no right or wrong way in coaching.
Speaker 1:No, there's, yeah, I like that. That's all, man, that was so good so. So so to to go back. So you said that you would try to you know, raise, raise that number. But let's just say you had 300k. How do you allocate, like you, as like the pro, because you help you, you come in and help groups and clubs all all the time. So let's just say, 300 is your like, it's your limit yeah, so then you've got it.
Speaker 2:So then you got to figure out how okay, so if that's your limit and it's in 165, is your band like your base, right for payroll? You got to find an inexpensive director, right, because I mean, if it's, if it's a seasonal club, maybe you could work with 165. It's year-round? No way, right. But we're taking a hypothetical situation here. 10 million, right, but um, but yes, you have to.
Speaker 2:So what I would, what I would do, first thing I would do is take 55, put that on payroll, then break that payroll figure down. Okay, let's look at your revenues. How many pros do you need? What's your average uh number of students or members per class? So do you need two? Two assistants, one assistant, one inexpensive part-time assistant. Trying to figure that breakdown, so you can fit into that 165, which is the hypothetical number we were using right. Then the other 45 is going to be your cost of doing business, which is you hypothetical number we were using right. Then the other 45% is going to be your cost of doing business, which is, you know, all the technical aids, the balls, the liability insurance for your pros, education, continuing education for your pros.
Speaker 2:I mean, it goes on and on. You know court, you know court maintenance is in there, right, yeah, that's that's a big chunk. If you're indoor lights and heat, I mean's that's a big chunk. Um, if you're indoor lights and heat, I mean that's a massive chunk. Right, you don't think about that. You know squash. I've had that fight all the time. You have an indoor court tennis and you have a squash court squashes year-round indoor and yet tennis mainly often shares 50 50, but outside in the summer we are really squashing that budget, squash, squashing the budget. So yeah, you have, you know, and, and, and and. These indoor places are, are, are propping up all over the place for Padel. I mean those costs of, of heating and lighting and ACing, those it's expensive and this might be a dumb question, but for for Do you have to extra factor to clean?
Speaker 1:those walls. Is that a dumb thing? No, To me it's like you're going to need those walls cleaned. They're going to get scum people touching them kids I mean. It's going to look gross. I'm not being paid by Windex.
Speaker 2:But that's a big bill. Yeah, no, I mean it takes time. Those take time because you've got to get the big squeegee, you've got the pole and you've got to go up and down In the morning. Sometimes here we're outdoors with Padel in Florida I just finished a three-court project here and the dew is so heavy at certain times that you have to squeegee off the dew if you want to get on before 10 am, which is another cost. I mean someone's got to do it Time. Time right, yeah, and that came up in our conversation is like say, I'm the director of a club, a department, club department, and I spend my time on the database. How do I figure that into my cost of doing business? If I'm setting up a Google database or adding people to North Star or something like that, how is that time ever compensated to me? I've got to count that as a cost, because if it's not me, it's gonna be somebody else. I'm gonna have to pay that person.
Speaker 1:so I gotta think about that yeah, what are what's what are low average in I don't want to say high, because it's all relative like what are what are salaries like for positions like like what are solid salaries that get quality people?
Speaker 2:you know this is the big discussion in the industry, isn't it?
Speaker 1:thank you for throwing me in the middle of it no, well, I'm just saying because it's all relative, also because you know from for me, from the entertainment, you know people ask me like, what's the? I'm like there is no. Everyone's different. Everyone has brings their own experience. You don't know where they're coming from, trap, you know so. Are they at the fly? Do they have to drive? Are they close by? There's so many different elements.
Speaker 2:Are they an employer? Are they a contractor?
Speaker 1:Well, for entertainment not so much.
Speaker 2:Oh for entertainment. You're always a contractor, right? Well, yeah, unless you're on a ship.
Speaker 1:No, you're still a contractor, really.
Speaker 2:Yeah, how can no? No, you're still a contractor, really. Yeah, how can you work for someone else when you're on ship?
Speaker 1:uh, it's like I forget how.
Speaker 2:No, it's it's, it's, it's, it's a, it's a term. Yeah, there's a term, um, yeah, because so? So contracting, that's a great point. You know, contractors versus employees contractors gonna be cheaper to the club, right? But you don't have the control over the contractor contracting and say, no, I can't, I can't show that time I'll go teach somewhere else for 50 bucks more. I mean compensation. Look, it's different around the country. Okay, so I was talking to someone and I won't say who, but they're in North Carolina and they're at a very nice club and they're at 60 bucks an hour for a lesson. I think that's low, right, I mean, don't you't you? I mean, put that in perspective to what you I hate to say this, but what you're paying your babysitter, right? Um, you know, babysitting is an enormous task, responsibility. But tennis teaching is a profession, you know. I guess babysitting is a profession too.
Speaker 2:That's probably rude of me to say that, but I would.
Speaker 2:I would. I would think that you know a highly qualified instructor? Um, of course it's a leisure activity. Uh, should, should be highly compensated? Um, I mean, sometimes the dentist director and the golf director are the highest paid employees at the club, not the general manager. Um, oftentimes that happens and I we've talked about that, not you and me, but I've talked about it at conferences and with other GMs Um, you know, obviously, northeast and West coast, florida, those are your, those are your cash.
Speaker 2:You know cash markets there, that's where you're probably going to make the most as a director or in the profession and the club profession. Um, elsewhere is not quite as, probably as strong. Texas is a very strong region. So you know, those are the spots to look for if you want to, you know. But then again, cost of living is higher, you know. You could say to me like, say, a club up in Greenwich, connecticut, a director of rackets might make $350,000 a year. Okay, that's not unheard of. But the cost of living up there, putting your kids possibly into private education, um, taxes, the tax base, um, commutation, as you said, commutation, are you driving, are you taking the train? It's, it adds up and so the $350,000 a year might, might not be enough, yeah.
Speaker 1:And do you think sometimes to some clubs because they price it at a point let's just for all purposes say $60 an hour do sometimes people think that's too cheap and they just go? You know what? I don't think I really need that less. Do people start to question sometimes, and do you see a different level when people pay more and kind of get that and they, they pay more, they expect more, but they also take it more, more seriously?
Speaker 2:yes, yeah, I mean there are, I mean golf pros, I know that are charging 250 an hour, right and, and people don't bat an eye because that pro has really gained their respect. They, they value his position or her position in the, in the industry, in the PGA. And I, you know, no, no one's. Once in a while you'll get someone that says, hey, that that price, that lesson's a little steep or that clinic's a little steep. But in terms of private lessons I rarely get a complaint about price. What'll happen is people just won't take a second lesson. If they think it's, they won't tell you, they just don't want to pay.
Speaker 2:But I think also, when you're starting a season or you have a new employee in, to price that professional at the right spot. You know they're always that professional is always going to want more. If they're getting a percentage of that lesson, they're going to want you to put that lesson at a hundred bucks, 120 bucks if they're getting 60% or whatever it is of that lesson. So you've got to take that person and say, okay, I've had this person here five years. I've had this person here three years. This person knows this many members, you're fresh to our marketplace. Maybe you have a better, stronger resume. I've got to figure out where to put you in terms of the ladder structure of pricing.
Speaker 1:Yeah, what are the averages or what are like the normal commission structures that you see for?
Speaker 2:the it ranges. I'd say it ranges from 50% at some clubs. Some clubs is lower, but I'd say that yeah, yeah, but then again the salary might be higher, See.
Speaker 1:I was just going to say there's probably other factors.
Speaker 2:Yeah, their salary might be higher. Higher a stipend might be higher if they're contracting housing, housing, right housing yep.
Speaker 2:so, um, you know so. So, for example, for me, I'll just be honest um, I, I have to pay for everyone's housing, so all my deals, I'm the land, I'm the lessor, so I, I go and rent the housing. The club doesn't, the club doesn't, the club doesn't want that liability. That's why they've outsourced to us. So I go rent all the housing in Colorado, in Massachusetts, and then I build that into the package for the pro right. So I'll say, okay, I'm subsidizing, I personally I'm subsidizing your housing. And also remember housing is a benefit in kind, so it is taxable. People forget that.
Speaker 2:So you have to really show. Yes, especially if you're a contractor, you have to show cost of doing business. So that's a huge piece of the puzzle with the housing and so I build in the housing costs into they pay. They pay a bit because otherwise they'd have to pay tax. They got it for free, but you know, and then also you have to build that into your commission rates because I'm taking a hit on the housing. I'm trying to get them not to pay full market value because they probably can't afford to live in Greenwich, Connecticut, or Falmouth, Mass or Vail, Colorado, you know, for a month or two or three.
Speaker 1:Those are high rent districts. Is it safe to say, too, that, like do maybe not enough people and when I say people, I mean both the the racket side and the club side? Is it safe to say that, like they can negotiate, they can like work a deal? Do they sometimes forget that and just and just go like, oh, we only have X amount and it's just like no, like both parties. Hey, why don't you dance a little bit, like, why don't you find a win-win for both parties? Like, do you do you see that maybe that doesn't happen enough either?
Speaker 2:People are kind of a little bit more You're talking, the professional coming to work, or the director, or the club.
Speaker 1:Well, I'm thinking both sides, but also, like you know, yeah, so I'm talking from both the club perspective and the racket side and just kind of like both Like do most, sometimes like they just don't negotiate enough or just don't think to negotiate.
Speaker 2:So a mentor of mine once said when you're negotiating with commissions it's like taxes, right.
Speaker 1:So maybe like, not so much like the commission, but like the overall package.
Speaker 2:Well, just remember this the club always wins. That's what he said. The club always wins because they're on this fixed percentage. Right so the club will take. And it used to be that the club never took from a department, right? But now the clubs and especially as they're outsourcing to me they're going to take a percentage out of the total revenue bill. Right, so if I make a million dollars on court, they're going to take 5, 10, 15% of that. But whatever you do, however much money you make, they're taking it to the house. Right, that's a fixed percentage. The house always wins, house always wins. So you have to think of that as you're negotiating the package with your new employee or contractor. Right so, take that off the table. No matter how much bigger you make that program, the house always wins.
Speaker 2:Ok, so clubhouse. So when you're negotiating the whole package, yeah, you have to make that person aware that you're providing them housing. If it's housing, you're providing them travel expenses. If they're doing that, you're providing. I mean, I'm not going to make a contractor go buy their own tennis balls at a club, right? So all those costs are part of having that person. So I'm like, if you're a true contractor, you got to bring your own tennis balls. You got to bring your own pickup tubes. You got to bring up. No, they have to rent those. So I say it's a small rent, right? So that's the cost of doing business for you being here and using this wonderful facility and treating our members like wonderful people.
Speaker 2:And there is a cost of business. They have to. They just think, as you said, so wisely. Then they're just thinking 50 bucks an hour, I can do eight hours. It's 400. A day times seven, that's 2800 bucks. No, it doesn't work like that. There's a lot more to it than that.
Speaker 2:Yeah, what? When are you going to be behind the desk for me? You know what that came up in our, in our. You know the, the new people to industry. They just want to be on the court making money, but you need support staff too. So are you going to have support staff or are you going to rotate the instructors behind the desk for a little bit and bring those support staff costs down? Well, you know what my answer is Pros are going behind the desk a little bit and rotate. You know you can string a racket and cover the front desk so you can still make extra money while you're covering the phone. Yeah, it's a lot of that Same with golf. I mean, golf is much further ahead than we are on the racket side because golf, the PGA, the coaching, the teaching, the mentoring makes all of those students and and professionals new professionals work behind all the different spots in the in the golf shop. They understand, you know. So rackets isn't quite there yet we're getting there. I think we're getting there in a positive note are you?
Speaker 1:are you behind that movement?
Speaker 2:for sure I, because it helps you as a person. It's not just to help me. It helps that professional better understand the business's not just to help me. It helps that professional better understand the business that they're entering or that they have entered.
Speaker 1:Going back to the conversation on the panel of what you were all talking about, it's the stuff that people want to know about they don't know about. And the same kind of goes like what separates sometimes, I think from my perspective, a good GM from a great GM is the ones who've, you know, started at the extreme bottom, working all the weird little jobs and details and kind of you know at least had to do. You know, maybe their mentor or their boss made them, you know, start off in the food and beverage, out by the pool, in like the in the shack doing whatever, and then just all these little different, odd positions that even if they weren't at them long, they could at least wrap their heads around and understand and kind of put themselves in somebody else's feet Like they can. Just it's that perspective.
Speaker 2:Of course, and being a team player. That person who's done all that has proven themselves as a team player. And I you know I'm not trying to float my own boat, but I strung a lot of rackets at midnight so the members had them at 6am the next day when they came for their 6am lesson. You've got to do that kind of work and it makes you a better person in the long run. You may not think of it at the time. God, I'm not getting compensated enough for this. You know petty job, but when you go to an interview and they ask you, have you done that? And they ask your reference, does that do that? They're going to hire you because they know you understand customer service. They understand that you get the business side of things and that there's not always compensation for the little menial tasks that we all have to do and that there's not always compensation for the little menial tasks that we all have to do.
Speaker 1:Yeah, look, you know we're in 2025 now. Any trends that you're seeing good, bad. Any trends looking forward? Are there things clubs that got to stop doing that they're doing? What's the view of the world from Ed Shanifee's perspective for 2025? The view of the world from Ed.
Speaker 2:Shanifee's perspective for 2025?. You know the wait lists are dwindling, so clubs have to really pick up their game. I mean they have. I mean clubs have. I mean during COVID they did. I think we all were a little tired after COVID as managers in the industry and I think we're going to have to be freshened up again because the wait lists are shortening and, you know, member turnover is back to normal. That's one trend I've seen. The second trend I'm really seeing is more directly concerned with the different departments golf and tennis. I'm really pushing, and so are a lot of people at the three conferences I've been at this year.
Speaker 2:I saw you at the CMAA is dynamic pricing. You know how. Hotels you go to a hotel room, right. Flights, flights If it's crowded, it's more expensive, right? Well, why don't we do that in the club business? I'm trying to get the software providers to do it. So if all the pros are booked on the golf side and there's one hour at 1030, that hour should be more expensive. If there's nobody booked at 2 pm, you should be able to get a nice, cheap, inexpensive golf lesson, right? If your clinic isn't full at 8 am, well, maybe at midnight the night before the price drops and then everyone tries to get in. It's like booking your flights on a Tuesday. Right, it's the best day to do it, or is it Wednesday, I can't remember. I'm waiting to book my trip to Vail because I'm watching the prices, but dynamic pricing is huge and I think we're missing a trick. In fitness and the spas, everyone wants to do everything between 8 and 12. Especially in florida, because it's cooler outside right?
Speaker 1:well, again, they start drinking at noon, so he's talking noon, like 8 am around here.
Speaker 2:I saw an article in the wall street journal vero beach and sebastian highest per capita alcohol intake in the country. Trust me, I can believe it.
Speaker 1:It's unbelievable, but lowest lowest duis, which is weird. But no, I'm kidding.
Speaker 2:No, I don't know that stat, but I'd be surprised, but anyhow. So why don't we look? If you want your lesson at the time you want it, you have to pay for it a little bit extra because we're creating that time for you, right? Yeah, right Now. On the same side, I face it in a couple of clubs Like so, for example, in Massachusetts, we can't fulfill the demand for lessons because we only have two courts right out of the eight.
Speaker 2:Yeah, so for certain times of the day, for the peak times, right, so we're booked right for the summer, the mornings are done. Right Now I can, and I have raised prices a little bit because I know that our mornings are going to be, no matter what I mean. I have, I have a new pro and she's like what do you mean? I'm booked, that's like you're done from from 7 to 12. You're already booked monday through friday. And she went and looked at discussions. Holy moly, I was again. We, we book out january 15th. So you know, I could do it myself and I'm I wanted to do it this year and I, I balked. But I think we could do it through software where it's not one person or one entity making it, it's. It's like the hotels and the flights it just goes up and down and moves around.
Speaker 1:I think to play devil's advocate like, I totally get it and I agree To play devil's advocate, though I think if you're a member of a club.
Speaker 2:Yeah, I get it.
Speaker 1:That's a tough line to walk. I think some clubs can probably get away with it, others, I think there would be an outrage.
Speaker 2:So probably why I didn't do it at the club in Massachusetts is, as you said, it's a member's own club, right, yep, but these, where this is coming from especially is the new pedel pop-ups and the pickleball pop-ups, where you pay a membership of, say, a hundred bucks a month, right, and then you pay court time, okay. So there are so many models out there and that's another trend. I'm saying how many different models are happening. And it's happening with top golf too. You know, like the um, the simulators and all that. Yeah, it's really changing the club world. Because they're not member-owned clubs. We're going more and more into, you know, commercially, commercial enterprise here, and like the piddell pop-ups, the pickleball pop-ups, you're paying court time on top of a small membership. There, I think it would work. You're not going to get the outrage because you're paying a much smaller dues annually and then you are booking courts and already paying for just courts, not even instruction, just courts. So I think dynamic, dynamic pricing there, uh, would you know?
Speaker 1:or maybe even for, like the clubs, instead of maybe a you know the that dynamic pricing, maybe it's in the afternoon instead of 60 minutes, you get 80 minutes, get an extra 20 minutes of yeah, I mean, I would, you know, lesson or like something where it's like, you know, to kind of to go back to it, it's that you, you add on a little bit more. So maybe instead of like discounting and you have that like whatever, or maybe it's hey, more so, maybe, instead of like discounting and you have that like whatever, or maybe it's hey, maybe in the morning it's only 45 minutes instead of an hour, you know. So, instead of changing the price, you, you, you change the time frame well, pros do that themselves, a lot of contractors.
Speaker 2:If they set their own prices, which a lot of times you know they have, they have the right to do that. But right, by the way, um, is that they'll do. They'll only take half hours. Like I know, this is the case at frenchman's Creek in the fitness department. There's a couple contractors there that say I won't book an hour, I only book half hours. So an hour, say, is $80, but they do it for $50 for the half hour. So they're making an extra $20 an hour that they wouldn't make if they booked the hour. So it's a similar kind of thing. Yeah, I mean, I think it's a trend that's going to happen more and more and I think it's coming to the club maybe not the elite member-owned clubs, but, uh, other other types of clubs.
Speaker 1:Yes, well, I think, even if it's it's worth, it's worth trying something out like it's worth, you know. I think that you know it's worth just what worst case a couple members get pissed. You throw them a bottle of wine. Hey, sorry, we were just trying some new stuff.
Speaker 2:Yeah, yeah, our bad, our bad. Sometimes, though, if you tick off a member, you get a little pink slip in the mail.
Speaker 1:At that token were they really a great member, if they're that ticked off over something so minute.
Speaker 2:And that brings up another point, like two things on that One is I had several members complain about not being able to get courts over this winter. Right, oh God, you put three Padel courts in, you took a stadium court out, we took one court out tennis and so I went and did you know? I come back with stats and say, look guys, yeah, you can't get a court at 9 am, but out of the 12 courts and all the hours available on those courts, we're only using 38% of the court available time. 66% of that time the courts are empty. So just because you want to play, you can play at 2, 3, 4, 5, right. So I always come back with a reasonable stat, right, yeah. And then the other stat is and, and people giggle with this.
Speaker 2:But I look my, my and I brought this up at the presentation my stat that I love to look at is lifetime value of that membership, right, does that member spend money at your club, are they right? So I had this. You sound like as a rank hitting a forehand, it gets higher as she hits a winner. Um, you know, but yeah. So now I forgot what I'm gonna say. Um, but yeah, so you have, um, you have the average value of a membership, which I think is really important, and most of the time when someone complains to me they don't spend a lot of. The complainer is one of the people persons that doesn't spend a lot of money at the club. I call it having your caviar on a tuna budget. You can't get what you want all the time, but you can get what you need some of the time. It's a Beatles, no Rolling Stones, but yeah, I look at the average lifetime value of a member a lot. It's an important stat for me.
Speaker 1:Yeah, no, that's good.
Speaker 2:This is really good. I think we covered a lot there. I think 2025, as I said, the wait lists are going to shrink more and I think you're going to see some of the big clubs holding back a little on capital expenses because costs are getting so high. The problem with that, of course, is the longer you wait to.
Speaker 2:You know I was at, and what brought me this up to me, brought me to think about this, was I was at saddlebrook resort for the ptr, the professional tennis registry, and saddlebrook was built in the 70s and they haven't really updated it and and there's a big plan to renovate it. It's one of the biggest resorts you know in in on the west coast. It was a granddaddy of them all back when it was built. Now it looks really dated and I know they have massive plans to update all the housing, all the rooms, the main clubhouse, the golf, the tennis areas and the golf course. But I think the longer they wait to do that, the higher that cost is really. I mean, these costs are going up exponentially because of inflation and because of everything, everything, yeah, so, um, yeah, so I think the clubs you'll see clubs really trying to balance that, you know, uh, whether they wait or whether they hit their members up for some more money now and do it now and try to save in the short term rather than the longterm.
Speaker 1:Yeah, Then they run, they run into. You know what are they missing out on by not updating and modernizing and getting ready for the new generation of members coming in. And yeah, it's definitely going to be a unique couple of years. I think you know a lot of the the clubs. Clubs got a huge boost and I think the ones who needed the boost and got it and did the right things with that boost are going to continue to do fine. I think there's a lot of clubs a lot quote, unquote a lot. I think there's a handful of clubs. There are clubs that got that boost just like, yes, we're back and they didn't do anything to help themselves, help their clubs, help their numbers, their members, their financials, and now things are starting to go back to normal and they're going, oh, like they didn't fix, they didn't update, they didn't do anything, and now they're back to square one, like they didn't take the blessing that they got and run with it. They took it and took it for granted.
Speaker 2:Right and I think they should have.
Speaker 2:You know it came up again at the PTR.
Speaker 2:If you're not on the PEDEL path, you're probably a little late to the game right now, because if you do it in two or three years time it's going to cost two or three times more and you could have done it when you had all that extra cash lying around and the wait list which guarantees you capital expense income when you have those initiation fees coming in. So yeah, if you didn't take advantage of the cash at the time, you're probably not doing great in the next two years. If you did as you said, denny, you're going to be fine as a club. I do think we're going to see the spend at clubs diminish slightly by members over the next couple of years. I think people are going to tighten up their wallets and wallets and it's going to be an interesting ride for the next few years and I think we're going to be there to watch it and we're in the middle of it and it's a wonderful business to be in because, like any other business, it's intriguing and you can learn from it every day.
Speaker 1:There's a lot more competition. So I think it's so much they don't want to spend money at the club. It's now people want an experience and they're willing to go wherever that is. If it's at the club, great. There's a lot of great experiences they can get at meals for show, for anything not at the club. So I think it's clubs have to think outside the box. It's doing different things, trying stuff, doing different things, trying stuff, seeing what works, and yeah, it's all the stuff that we've been talking about. So yeah, edward, thank you so much for coming on the show Always a pleasure, thank you Always love having you on, I love our repartee, I love our banter, our chat.
Speaker 1:We always have a good time and thanks for sharing stuff that's not always talked about. In the club space, which is the racket side, and all the numbers. In the club space, which is the racket side, and all the numbers. Thank you for being so open with all of that Always an honor and a pleasure.
Speaker 2:Thank you.
Speaker 1:Thank you so much, ed, for coming on, sharing some knowledge and light and really allowing us to go deep into the world of rackets and budgeting. If you'd like to learn more about management in motion, head on over to privateclubradiocom slash, mim, m-i-m, and all the details are there. That's this episode.
