The Board met on 20 February and want to let members know the outcomes of that meeting. Suffice to say there was good news and bad news. The bad news is primary caused by the financial environment affecting small club industry post COVID – we have spoken to our peers in other clubs and industry experts who are all reflecting challenging times ahead. Frustratingly, the difficult times are caused by matters outside our control but require tough action (and unpopular decisions) to be taken.
On the positive side the club enjoyed a good festive season and trading outcomes. Our raffles were very well patronised and received, the Bistro experienced an outstanding trading period and New Year and Australia Day were very well celebrated. The club looks forward to this continuing and the Neil Diamond tribute show on 18 March has all the hallmarks of being a resounding success – please purchase your ticket for a truly world class show.
The Board meeting was dominated by discussions and decisions on what the Club is doing and needs to do to continue to provide high quality sporting facilities and ongoing club environment for our members.
It is imperative that members understand that the last few years with fires, COVID, floods, severe weather events and the current poor economic outlook are now impacting on our trading performance and profitability. While we had a strong festive trading period, and turnover has allowed us to continue to “pay our way”, we are not able to build our cash reserves for the quieter trading periods we have during the year.
The rhetorical question is why is this the case?
Think about how you own home bills have increased, how your non-discretionary payments have increased recently and how this has affected your disposable income. If you multiply that on a much larger scale, you get a picture. Club electricity bills (from the best deal we could obtain) have increased from about $7000 to about $13500 per month, gas bills have increased by about $1000 per month, our insurances have increased by thousands per month, consumables and chemicals on our sporting facilities have doubled in price over the last couple of years, fuel costs have doubled, rates and tax have increased by substantially more than CPI and repairs and maintenance on the club and infrastructure have increased disproportionately.
At the same time our costs are being driven up, our revenue has declined and is continuing to trend down. Gaming and alcohol sales makes up about 75% of the clubs’ profit. Gaming machine profit has decreased by about $250,000pa in the last couple of years and is still trending down through people not having a level of disposable income they formerly enjoyed. Clubs NSW report a lack of confidence in gaming machines generated by current political agenda.
Alcohol sales volumes have been impacted by recent increases in government taxation which have been passed onto clubs (and alcohol prices).
One of the few bright spots is club management have been able to offset the impact of this on club finances by establishing gross profit margins in line with industry benchmarks.
We have had months of weather-related close downs (and no revenue) affecting our sporting facilities, in particular the golf course. At the same time our maintenance costs went skyward because of weather related damage.
In summary costs are going up and revenue is going down!
Over the last couple of years, the club has frozen membership fees and playing levies during low activity levels which were clearly outside of THCC control. The Board recognises that this situation cannot continue. THCC membership and playing fees for our sporting clubs are now substantially cheaper than our neighbouring clubs.
The Board have provided information to our respective sub-clubs on what the new fees and charges will be for the remainder of this year and into 2023/24. Social membership into the club will not change.
Inevitably, the Board expects sporting members will be unhappy with increases but are, we believe, still cheaper than our “competitors” and at a level to sustain the quality of the facilities members enjoy.
The THCC is “cutting its cloth” through critical examination of its operations, revenue streams, non-discretionary expenditure, and discretionary expenditure to try and achieve on going sustainability. Management is meeting with key staff members regularly to consider saving which could be implemented, again some of these may be unpopular but hard decisions need to be made.
The most important thing that we value our members and what you can do right now is to support your club and its facilities. We look forward to seeing you there.