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Inflation, the Economy and Clubs – Oh My
By Geoffrey Benedict, CPA, Partner; Kerri Rawcliffe, CPA, Partner; Brooke Rossi, CPA, Senior Manager and Amber Stone, CPA, Manager
The private club industry has experienced tremendous growth since the pandemic as a result of people looking to be outside more and seeking safe, community and family activities. With this growth came an influx of cash from the increase in operating revenues, initiation fees and capital revenues, as well as from various government programs such as the Employee Retention Credit.
The pandemic-related growth is unlikely to continue at the same rate given the current economy and possible recession. To weather possible economic downturns, the club must actively work to retain the growth in membership, while also managing cash and reserves to fund improvements despite the inflationary cost increases.
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