Mixing it up: club/resort hybrids show strength through tough hospitality markets.

A private club is a private club and a resort is a resort ... except when they're both.

In today's hospitality market, even the wealthy have learned to search the Internet for, and to expect what USA Today recently referred to as "Cheap Chic"--first class service at a deal. As this happens, both clubs and resorts are feeling more and more pressure to produce additional year-round top line dollars. "Getting a great deal is the new status symbol of the contemporary traveler," said Peter Yesawich, managing partner of YPB&R, a marketing firm specializing in travel. "There's no status anymore in overpaying."

As pressures rise to maintain top line revenues, the lines sometimes blur between private clubs, resorts, and high-end fee golf facilities. Clubs are opening their facilities and building guest lodging, high-end fee courses are linking with resorts, and resorts are establishing private clubs on their grounds.

All of this is really nothing that new: Going back a century ago, summer resort communities for the wealthy included a private club component. Club management companies have provided cross-access to club and resort properties in their portfolios for many years. The difference is that what is driving today's club/resort and resort/club hybrids is much stronger economic pressures from a hospitality marketplace searching for above- and below-the-line dollars.

Pinehurst in Pinehurst, NC, a ClubCorp-owned property, has been a resort/hybrid for a century, Janeen Driscoll, Pinehurst communications director said. The resort opened in 1895. The first golf course opened in 1898, followed by a Donald Ross course in 1901. Men's and women's golf groups were soon formed. As an offshoot of those groups, the club at Pinehurst opened in 1903 with seasonal memberships At that time the resort was only open November through March.

In 1984 ClubCorp purchased the resort. Pinehurst club members (75 percent of whom live in the area year-round) receive "significant" discounts at the resort, Driscoll said, such as special mid-week rates in the spa that was just completed last year. In addition, members of ClubCorp-owned or managed clubs can purchase "Associate" or "Signature Gold" memberships, which allow them reciprocal privileges at ClubCorp clubs outside a 50-mile radius from their home club, and also provide significant discounts at ClubCorp owned resorts.

Associate members receive 10 percent discounts, and Signature Gold members receive 20 percent off on all-inclusive packages at ClubCorp resorts--Barton Creek in Austin, TX; The Homestead in Hot Springs, VA; and Pinehurst. Above and beyond that, each of the resorts offer seasonal offers to Gold and Signature members as well--for example, $549 for two persons for two nights stay, two breakfasts, two dinners, and two rounds of golf.

"We know who we're looking for. It's the high-end golfer with a $200,000-plus income who plays an average of 20-50 rounds per year. Our members fit that demographic." Driscoll agrees with travel pundits that these days Pinehurst's wealthy clientele is much more value-oriented. "In the boom years of 1999 and 2000 we could name our price. In a post-9/11 economy it's a different situation."

Last year, ClubCorp moved one of America's most well-known private clubs--Firestone Country Club in Akron, OH--from its club division to control of The Pinehurst Company, ClubCorp's resort division, Driscoll said. "It's being marketed as a place where you can play and stay. It is currently in planning stages of offering limited overnight stays to select groups and is not completely open to the public as yet. They have 170 rooms, including villas, and sleeping rooms."

A Two-Member Club

An individual who is very familiar with this resort/club crossover phenomenon is Jorge H. Garcia, AIA, chairman of the design firm of Garcia Brenner Stromberg Architecture, based in Boca Raton, FL. The project that put Garcia's firm on the map was The Floridian Golf and Yacht, a 300-acre truly private club on the St. Lucie River in Palm City, FL. The club is personally owned by billionaire Wayne Huizenga (of Waste Management, Blockbuster Video, and Auto Nation fame).

While Huizenga and his wife Marti are the club's only "members," each year they extend "honorary memberships" in the Floridian to 100 of their friends. The Floridian has an exquisite 50,000 sq. ft., four-story clubhouse, an 18-hole Gary Player-designed golf course and a 68-slip deep-water marina, a helicopter pad, and two guest "cottages."

GBS has designed notable club and resort projects for a number of clients, but it was the relationship with Huizenga that first exposed the designers to the idea of incorporating a private club within a resort. Huizenga was the financial clout behind Boca Resorts, Inc., a publicly-traded company that owns both resorts and clubs.

"Today there are a lot of (club) projects that tie into cottages or possibly lodges within a resort," Garcia said. "Within some resorts--the Boca Raton Golf Club is an example--you can be a member of the golf club, or you can be a resort visitor."

The program to which Garcia referred is Boca Resorts' "Premier Club." The program is actually over a decade old--started during the last recession. Steve Catena, director of membership sales for the Boca Resorts' Boca Raton Resort and Club (BRR&C), explained the program: "In 1991 we started at the Boca Raton Resort and Club," Catena said. "The money from the membership program fueled the hotel's expansion and helped the hotel to make its debt service through the tough days of the early '90s." (Interestingly enough, BRR&C--opened in 1926 as the Cloister Inn by high society architect and eccentric Addison Mizner--had weathered the Depression and many tough years between its opening and the acquisition by Huizenga in 1997 through the sale of memberships.)

"We've been selling (Premier) memberships here for 12 years," he said. We've built a $40 million spa, a golf clubhouse, and re-did the marina. The members who joined at $15,000, or $18,000 or $22,000--they love it."

Today's Premier Club members pay $52,500 as a non-equity membership deposit. Dues are $4,000 annually for one golfer, $6,000 for two golfers, $2,000 for tennis, and $3,300 for social members. Members have access to four golf facilities: one on the grounds of the resort, Boca Country Club, Deer Creek Country Club, and the Carolina Club courses. In addition, BR&C Premier members also have access to Boca Resorts other Premier Club properties--Pier 66 and Bahia Mar hotels in Fort Lauderdale; The Registry and Edgewater hotels and Naples Grande Golf Club in Naples; and Grand Oaks Country Club in Davie, FL.

The membership fee is completely refundable. Once a member elects to leave the club, billing for membership dues cease. The membership then goes into a membership pool. Once four new memberships are sold, the fifth membership sold is a resigned membership.

Bargain Hunting in Paradise

Because the resort is gated, it was possible to restrict access to hotel members and guests, Catena stated. "You have to provide some kind of exclusivity. I have a friend who sells memberships at a property where you can just come in off the street and play golf. Where's the benefit in that?"

Strangely, it is not the golf that is the big attraction, Catena said. "The thing that's always fueled the Boca Raton Resort and Club is the beach club and the social membership. They can pay as they go on golf." Club members pay $105 green fees, versus a normal fee of $150.

The resort offers a variety of social activities and a form of "cheap chic" that was in place long before USA Today coined the phrase. In Boca Raton, where traditional private club memberships can go for upwards of $100,000 plus dues, and club assessments are common, many of those driving the area's upwardly spiraling residential real estate boom only live in Boca part of the year. The Premier membership is a comparative bargain.

"From January to April you're going to wait in every restaurant in Boca," Catena said. But not at BRR&C, where there are 12 dining facilities, including five restaurants. Members receive discounts on their dining and on other purchases in the property's shops. Once again, cheap chic rules the day. "It doesn't matter what the price is. You can raise your price as high as you want as long as the member gets less than the hotel guest pays," Catena said.

Still, there are obvious differences between Boca Resorts' clubs and traditional private clubs. Catena acknowledges that--unlike most private clubs--membership in the Premier Clubs is open to anyone who has funds for the membership deposit. And there are natural conflicts that arise between members and hotel guests.

"The biggest dilemma is the hotel," he chuckled. "The club members hate the hotel guests and the hotel guests hate the members." Catena tells prospective members upfront that they need to recognize the fact that their club is part of a resort property and that, for example, there may be times when it is more difficult to get a tee time (though with the stabilization in growth of golf in recent years, and four courses available, he finds it to be less of an issue than when he started in his position in 1993). Servers at the resort always ask diners for their club membership card to avoid the risk that a member might be offended at being mistaken for a resort guest.

Boca Resorts is not alone in dealing with this love/hate relationship between the needs of a destination resort and the desire for the steady income provided by club members. Speaking on the condition of anonymity, the general manager of one of the West Coast's grande dame resorts, whose management inherited tennis and beach clubs when his management company assumed control of the property, told of headaches that dealing with club member demands caused him. He said that club members' sense of entitlement has caused difficulties both in renovating the property and in its marketing and accommodation of resort guests going forward.

Still, BRR&C's Catena said, the concept has worked very well for both the resort and the club members. Currently, membership sales are off 20 percent from what they were pre-recession, "but then our prices are higher now," he said. "Luckily, real estate has done really well in our area."

Pebble Beach East

From the massive scale of the Boca properties, there is another model developing--smaller, but equally upscale and fiscally sound. On the Atlantic Ocean side of the resort community of Palm Coast, FL, Destination Hotels & Resorts has just opened the Lodge at Ocean Hammock. The Lodge is part of a $25 million complex that includes a Nicklaus-designed course, rated as one of the top 10 upscale courses by Golf Digest and in the "Top 100 You Can Play" by Golf magazine in its September 2002 issue.

Prior to breaking ground on Ocean Hammock in February 2002, Destination had been managing the Palm Coast Golf Resort, located about four miles from the Ocean Hammock site, across a bridge on the Intercoastal Waterway. Palm Coast has four golf courses, and the 150-room Harborside Hotel.

"Two years ago they added a world-class golf course called Ocean Hammock," said Chris Kehn, club manager of Ocean Hammock. The 450-acre property now offers homes and condo living, golf, restaurants, a spa and fitness area, and beach access. The clubhouse includes a dining area called the Atlantic Grille that is open to the public, and 20 deluxe rooms.

The Ocean Hammock Club currently has 61 "Founders" members 120 "Golf" members, and 90 "Social" members. A "Founders" membership, which includes green fees and other special privileges, such as tee times two weeks in advance, calls for a non-refundable, non-equity initiation of $75,000. A "Golf" or "Corporate" membership is $30,000. Social memberships are $4,000. Membership is also available in the "Beach and Swim Club," which includes access to the pool, locker room, fitness room, day spa, and outdoor dining and bar.

The ground level of the British West Indies-influenced Lodge, with its shuttered windows and overhead fans, is the clubhouse for club members, including the golf shop and locker rooms. The first floor houses a reception area, finished in cypress stone with hardwood bamboo floors; the Atlantic Grille--a gourmet restaurant seating 125; meeting facilities; and a private member dining room. The top level holds the Lodge rooms--19 luxury rooms and one suite. Each level is surrounded by terraced balconies overlooking the ocean and the Ocean Hammock golf course.

"If you're a Lodge guest you can pay $250 to stay in the Lodge and you'll pay $190 green fees. You can come and we'll treat you just like one of our members. What we ultimately want to become is the Pebble Beach of the East. The course is just fabulous.... the Atlantic Ocean is the biggest water hazard. With 20 rooms, we have an employee for every guest."

Kehn has been both a private club manager and a resort manager. He noted the difficulties that some private clubs are experiencing under current market conditions. "To be able to flow the revenue like this is just a great idea," he said.