The U.S economy has been signaling that the decade-long business cycle upswing following the global financial crisis of 2008 is nearing, or has reached, its pinnacle. This should be recognized as neither good news, nor a surprising development, given the proliferation of risks to the economic outlook. Shifting fiscal policy, trade tariffs and threatened currency wars, as well as volatile stock markets have all contributed to creating a challenging decision-making landscape for all businesses, including clubs.
In such a climate, timing is everything. It is safe to say that inertia is almost always a factor when forecasting economic cycles and when making investment and operational decisions based on those forecasts. It is only human nature to make personal or business judgements based on past experience, extrapolating from the current environment. Unfortunately, a business decision to expand capacity or amenity offerings can sometimes take years to implement, only to find that technology and tastes have moved on or that the demand for additional service offerings has been dampened by unforeseen events such as the financial crises that have distorted economic growth in the modern era. Clubs that invest in the face of a downturn risk that their new facilities might be underused; this might lead to greater pressure on dues. Conversely, if clubs fail to invest in the face of an upturn, they risk losing members and the almighty dues dollar to other clubs or alternative leisure facilities. This is a sustained management and board room challenge for clubs of all sizes.
So how can a club manage through such turbulence?