A Yacht Club business plan for winter
Commentary by Tom Stauss
The Ocean Pines Association’s financial performance through September, the first five months of the fiscal year, is so-so, a slight $200 positive variance. Digging deeper into the numbers reveals some good news on revenues --- the Yacht Club, golf and aquatics are showing good growth in usage and revenues, and the Beach Club had a banner year -- but there’s disturbing news on expenses at the Yacht Club, golf and aquatics.
Worse, essentially break-even operations through September means there’s no cushion built up to help offset likely losses in the last half of the fiscal year in those three departments. That does not portend well for the remaining months of the year.
The Budget and Finance Advisory Committee is taking a hard line on the condition of OPA finances currently and looking ahead to Fiscal Year 2013. This hard line, including a call for the closing of the Yacht Club pending development of a new business plan, has resulted in a frosty state of relations between the committee and OPA General Manager Bob Thompson. The general manager, with mixed results, has been trying to implement board policy in opening the Yacht Club, and all the OPA amenities, to more members, at the same time he tries to manage the bottom line. The tension between those two competing objectives is apparent.
It’s not absolutely clear whether the budget and finance committee wants the Yacht Club to close immediately. The panel’s chair, Brian Roberts, has indicated that he does not want the OPA to walk away from booked parties and banquets prior to the holidays, so it’s clear there’s at least some nuance to the committee’s recommendation. The position of the committee appears to be, at the very least, that the Yacht Club should close after New Year’s Eve, after which time a new business plan and strategy for the club can be devised, including the possibility of out-sourcing management or leasing it outright.
The friction between Thompson and the committee comes in part because the committee regards Thompson’s "open for business" strategy at the Yacht Club as a failure, one that was never based on a realistic business plan and was therefore doomed to fail. Thompson hangs his hat on the fact that revenues are up substantially year-to-year, while fully acknowledging there have been issues with cost control. He wants more time to get it right.
To arrive at a sound business plan for the winter months, it’s useful to evaluate the history of the Yacht Club and its seasonal rhythms, particularly the fact that historically it makes money in the summer while operating in the red the rest of the year. Through September of this year, it’s barely broken even, but at least it hasn’t been drowning in red ink.
While the board of directors cannot be faulted for giving Thompson free rein in trying to turn the Yacht Club into a community gathering-place, with a clientele and verve that matches some of the area’s best-run restaurants, it hasn’t quite jelled.Come January, the most sensible, plausible approach is to dial it back significantly, to maybe a couple of days a week. This prescription assumes that October and November financial reports continue the operating trends of August and September. If some recent operational changes at the club produce different results, then the dialing-back can be tempered in January.
This also assumes that the club will be available for catered events bookings anytime. An aggressive campaign to promote the Yacht Club as a banquet and party venue needs to be implemented before this business is lost to aggressive competition.
There is no particular reason to believe that the Yacht Club can effectively compete during the winter with the myriad dining options in the immediate vicinity of Ocean Pines and further out in Ocean City, West Ocean City and Berlin. Ocean Pines residents flock to those two-for-one winter specials that abound in the area. They are quite loyal to their favorite local restaurants operated by professional restaurateurs, whose livelihoods depend on delivering good food and service, consistently.
The snow birds and non-resident owners who make up a large percentage of the Ocean Pines population during the May through September period enjoy and support the Yacht Club in significant numbers. That’s when the amenity should be open at full throttle, seven days a week, and that’s when Thompson should be allowed to try again with his own hand-picked management team. He should be given a chance to turn the outside bar and pool area into a popular haunt for a younger demographic after dusk. He should be given a chance to stage crab feasts and similar events on Java Beach, which was created for precisely that purpose but which did not happen this past summer.
The solution to the Yacht Club dilemma may not be so complicated after all. Operate it lean and mean from October through April and at full tilt May through September.
If Thompson can’t manage it under those conditions, then it would be time to outsource it or lease it out
– Tom Stauss
Uploaded: 11/8/2011
