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Final Report RFP 15- 61 Membership Pricing and Revenue Enhancement

Prepared by

ClubIntel

April 19, 2015

Index

Study Methodology and Sample Plan 3

Overarching Insights 4

Member and Non-Member Profile 9

How CA Residents and Members Feel about their Experience 21

The Perceived Value of CA’s Offerings 37

Price Sensitivities and Practices 43

Pricing and the Competition 64

CA Members and Other Facility Memberships 74

2

Study Methodology

• This report reflects the synthesis of analysis conducted from several stages of primary research to address the study’s objectives. To illicit understanding of consumer and internal perspectives, ClubIntel conducted an exploratory phase which consisted of hosting in-depth interviews with key CA leadership team members and Board Members. This phase also included a series of focus groups with Members that explored sentiment regarding their club usage and behavior, lifestyle demands, and ideation of future revenue-generating opportunities for CA.

• The next phase included site visits to each CA property, as well as clue scanning (onsite and online) among key competitive clubs within the CA market to collect intelligence on marketing, sales, branding, pricing, and general membership offerings.

• From the detailed information collected above, ClubIntel designed an online survey to collect both Member and Non-Member feedback on proposed membership packages, price sensitivities for specific offerings, and performance measures regarding the experience currently received from CA properties.

• Rounding out the study included analysis and benchmarking of CA’s key revenue metrics.

Online Survey Sample Plan

• CA’s survey objectives called for a minimum of 1,000 responses from both Members and non-Members of CA properties. To fulfill the response requirements, ClubIntel designed a stratified sampling plan that sourced responses using various collection methods as described below.

• CA provided ClubIntel with a list of Member emails that were used to invite participation to the study. A census of 9,995 usable Member emails were sent a survey invitation on March 26, 2015. Among those, 819 emails bounced for various reasons and 23 opted out of the study which reduced the initial sample to 9153. From this invitation, a total of 1293 responses were collected rendering an effective response rate of 14%.

• In addition to the email campaign, two other collection modes were used. The survey link was posted on CA’s facebook page which rendered 53 responses. To augment the non-Member sample, ClubIntel sourced a third-party research panel company (ResearchNow) to screen and collect an additional 161 responses for this segment.

• In all the survey analysis reflects the collective responses from 1,507 Members/Non-Members providing strong market representation.

Overarching Insights

4


STRENGTHS

CA’s membership is more educated and more affluent than the Howard County in general. This is an indication that members may have the discretionary income to spend more if provided with the an experience that delivers value. CA’s members represent a significantly larger percentage of older adults (over age 45) and seniors (over age 65) than the surrounding county. This profile of the mature adult represents both an opportunity, but also a potential challenge to growing membership as it relates to attracting younger adults, specifically the Millennial generation.

CA members tend to be more active users of the various fitness and sport facilities than the typical health club consumer (e.g., IHRSA data). Over 50% of members use the facilities more than 2x a week and 31% use the facilities at least 3x a week. The athletic facilities generate approximately half of the total visits to CA facilities. Finally, PPP members generate over 70% of all visits, and their usage is disproportionally large in comparison to their overall representation of the membership.

Despite having moderately low satisfaction scores on most questions posed to Members, there is a high likelihood that Members will continue to renew their membership. This may in part be due to the nature of having a long-term contractual obligation, low-cost memberships, or simply the convenience that’s provided by the locations of CA facilities.

There are several key assets Members perceive as creating strong value toward their lifestyle needs. These include the three athletic facilities, the indoor/outdoor pools (swim center), and the bike paths/trails.

The tennis program’s non-dues revenue productivity compares favorably with most tennis facilities at slightly over $37,000 per court annually. Most facilities with indoor and outdoor facilities can expect to generate $25,000 to $50,000 per court.

5


WEAKNESSES

The CA experience received moderately low loyalty and satisfaction scores, indicating significant segments of members who are displeased with their CA membership. In general, the majority of members rated their CA experiences within a range that is indicative of acceptable performance, but not strong or great. This moderate performance indicates an opportunity for improvement in an effort to create stronger value perceptions, especially prior to the association rolling out any significant changes with the membership structure and/or pricing.

From a brand reputation perspective, there’s an large contingency (37%) who do not feel CA has a strong, positive reputation. This is a fairly sizable number that can play a significant role creating negative word of mouth or buzz for the organization. Relating to this dynamic is also the extremely low pride associated with the CA membership. Typically, the amount of pride expressed by the membership is an indication of emotional connectedness to the brand. In this instance it appears that CA has not been able to achieve a sufficient level of emotional connection with its members.

Relative to the subject of revenue generation, the current perception of value is moderate at best with over a third of the members expressing discontent with the value they receive from their membership. This perception may have a significant impact on the Association’s ability to generate revenue in the future unless it is resolved.

The athletic facilities underperform when compared to industry averages for non-dues revenue productivity. The CA clubs capture only 33% to 45% of the typical health and fitness club, leaving significant opportunity for growth. Examples of non-dues revenue areas that underperform in relation to industry benchmarks include personal training, small group training and Pilates private training.

The CA experience does not accommodate the needs of younger families and adults whose lifestyles require more flexible access to services. For example, the clubs do not offer group exercise classes at times that can accommodate the needs of younger families where both adults work.

6


OPPORTUNITIES

Individuals in this market tend to be married with nearly 40% having children at home. This demographic profile provides significant opportunity for family-oriented services and programming.

CA members overwhelmingly expressed interest in having an exclusive membership that provides access to the three athletic facilities. In addition, there is strong interest in a membership specific for the pools and sport park. These two membership types were found to generate the greatest appeal toward creating value that meets members’ lifestyle needs. Also creating strong interest were complimentary guest passes for use with friends, having access to group exercise classes, treadmills without an upgrade, online group exercise class registration, and free trial to premium group exercise classes.

Members are willing to pay a premium for access to unlimited group exercise classes at the three athletic facilities and Haven on the Lake. Interestingly, the price point members are willing to pay for access to unlimited classes is actually more than the average price point paid for a PPP membership.

Members feel strongly that the membership packages and corresponding pricing need to be simplified. Members prefer having the opportunity to customize their membership experience (select the offerings they desire) rather than being forced to purchase a bundle that includes offerings they don’t want or use, but feel as if they are paying additional for. Members also prefer not having long-term contracts and pricing that’s locked into a long-term commitment.

Members voice discontent with the membership sales process. The sales process should be streamlined to include greater convenience with accessing information and conducting business (e.g., online systems and decentralized sales locations).

There is an enormous upside for CA if the athletic facilities can be more productive at generating non-dues revenues, particularly in one-one personal training and small group training. Comparisons to industry benchmarks indicates revenues from these areas could easily be doubled. There is also a significant opportunity to make group classes and other offerings more available to younger members and consequently engage the younger generations.

7


THREATS

Regardless of the affluence within this market, there is a great deal of sensitivity to pricing. In nearly every instance, members and residents prefer the lower pricing options proposed within the survey. The optimal price points are similar to the prices already paid for some existing memberships. For example, when asked about pricing for access to the three athletic facilities including treadmill access, the optimal price point was nearly the same as the posted price for a single athletic membership and nearly identical to the average price paid by members. The optimal price for accessing the two golf courses was significantly lower than the prices currently posted, but similar to competitive pricing in the marketplace. Price sensitivities for a family membership to the pools and sports park were about 25% less than the average price point today for a free standing family pool membership.

CA’s pricing for its golf properties, in particular Hobbits Glenn, and its athletic facilities is well above market; especially when factoring in the additional cost members must pay to access group exercise classes through PPP.

Dual memberships with competitive clubs is prevalent. Nearly one-fourth of respondents indicated they had memberships at other facilities. The most frequently mentioned include Lifetime Fitness, the YMCA, local yoga/barre/Pilate studios, Planet Fitness and Gold’s. It is apparent that many CA members and resident non-members leverage other opportunities to pursue their fitness and recreational needs with Yoga being the largest specific need being fulfilled by competitors.

8

CA Member and Non-Member Profile

9

Among all respondents, approximately 80% are residents of Columbia, while another 18% reside in Howard County outside of the Columbia borders. Among CA members 86.6% report living in Columbia, while among non-members only 41% reside in Columbia. Package Plan members are the most likely to be Columbia residents, with 91% reporting they live in Columbia.

79.6

86.6

41.0

91.3

82.7

17.9

11.9

59.0

8.2

14.8

2.5

1.5

0

0.5

2.5

All Responses

Members

Non-Members

Package Plan Plus

Package Plan

Current Resident of Columbia (Percentage)

Yes, live within the town of Columbia No, but live in Howard County No, live in other area

10

95% of Package Plan Plus members are Columbia residents compared to 87% of Package Plan members. Leveraging the benefits of the Package Plan Plus membership appear highly dependent on Columbia residence.

90.5

95

87

5.5

2

8

4.0

2.2

5.3

All Responses

Package Plan Plus

Package Plan

Membership Classification (Percent of Total)

Resident Non-Resident Don't Know

11

Among respondents, 62% report being PPP members, a nearly identical percentage to internal membership data showing 60% of CA members are PPP members. The percentage of respondents who had a membership at Hobbits Glenn was 2.6%, significantly higher than their overall representation based on internal data.

30.7

61.8

2.6

.6

.7

.8

1.7

.8

.3

Package Plan

Package Plan Plus

Hobbitt's Glen

Pools

Supreme Sports Club

Columbia Gym

Columbia Athletic Club

Haven on the Lake

None of the above

Membership Plans (% among Respondents)

12

Comparing the age demographics of Howard County to those of survey respondents, it becomes evident that CA skews to an older market, with 64% of CA members over the age of 45, while only 39% of Howard County residents are 45 or older.

1.6

12.8

21.8 21.3 22.0

16.9

3.5

18 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 orolder

CA Respondent Age Range (Percentage)

12.8%

21.8% 21.3% 22.0%

20.4%

12%

15%

17%

12%

10%

25 to 34 35 to 44 45 to 54 55 to 64 65 +

Age Range Demographic Comparison CA Respondents and Howard County

CA Howard County

13

Nearly 75% of the respondents are Caucasian/white which is 10% points higher representation than Howard Country in general. A distant second in terms of ethnic representation is African Americans at 9.5%, which is approximately 8% points below the representation for Howard County. Finally, the Asian population, while representing just over 14% of Howard County’s population only represents 5.6% of the CA membership base.

72.3%

9.5%

2.4% 5.6%

62.2%

17.5%

5.8%

14.4%

Ethnicity Demographic Comparison CA Respondents and Howard County

CA Howard County

9.5

72.3

2.4 5.6

.4 2.1 7.5

Ethnicity (Percentage)

14

While the Gender Ratio (ratio of males to females) in Howard County is evenly split, among the CA respondents to the survey, the ratio skews significantly toward females. This profile dynamic indicates women have an influential voice with the CA member experience.

36.7%

49%

63.3%

51%

CA Howard County

Gender Demographic Comparison Columbia Association and Howard County

Male Female63.3

36.7

Female Male

Gender Percentage

15

CA respondents are much more affluent than the general Howard County population. Approximately 50% of CA respondents report HH incomes over $100,000, while only 8% report HH incomes of under $60,000. However, 27% of Howard County residents report HH incomes of under $60,000 (2009 data) compared to only 8% of CA respondents.

2.9

5.0

8.8 9.4

22.3

15.4

13.0

23.2

Under $40,000 $40,000 but lessthan $60,000

$60,000 but lessthan $85,000

$85,000 but lessthan $100,000

$100,000 but lessthan $150,000

$150,000 but lessthan $200,000

$200,000 or more Prefer not toanswer

Household Income (Percentage)

16

Just over 61% of CA respondents are employed on a full-time basis. Possibly the more interesting demographic is the fact that 20% of respondents report being retired. According to a May 2014 report by the Columbia Association entitled Community for a Lifetime, approximately 11% of the population were at or above traditional retirement age, while 10% of Howard County residents fell into the same category. It is obvious that the CA respondent profile reflects a higher percentage of retired individuals.

61.8

10.2

2.1 5.5

20.1

.3

Employed, workingfull-time

Employed, workingpart-time

Not employed,looking for work

Not employed, NOTlooking for work

Retired Disabled, not ableto work

Employment Status (Percent of Total)

17

The CA respondent is highly educated. Nearly 87% of respondents have a college degree or higher, and an impressive 55% have earned a graduate level degree. By comparison, only 60% of residents in Howard County have earned at least a college degree.

.3 1.6

6.9

3.7

31.8

54.9

.7

Some high school,but no diploma

High schooldiploma (or GED)

Some college, butno degree

2-year collegedegree

4-year collegedegree

Graduate-leveldegree

None of the above

Education (Percent of Total)

18

Nearly 80% of respondents are married or living with a partner.

78.2

8.8

2.3 6.8

3.8

Married or living withpartner

Single, never married Widowed Separated/Divorced Prefer not to answer

Marital Status (Percent of Total)

19

Nearly 37% or respondents report having children under the age of 18 living at home, which is approximately 6% points lower than the average for Howard County.

36.5

63.5

Yes No

Children under 18 at home (Percent of Total)

36.5%

42%

CA Howard County

Children under 18 at home CA Respondents and Howard County

20

How Members Feel about their CA Experience

21

Product

Quality

Facility

Quality

Service

Quality

Emotional

Quality

Price Time &

Usage

Member’s Perception

of Value

Commodities of the Club

Drivers of Satisfaction

Advocacy/Loyalty

Differentiator

22

Defining the Member Value Equation The Framework for Loyalty and Advocacy

The Clubology Score™ A Performance Metric Measuring the Club’s Performance

5’s 3, 2, 1’s Clubology

Score™

Rewards for performance

and perceived excellence

Penalizes for performance

and perceived

deficiencies

Score may be positive or negative

23

Note: the CS score is similar to the NPS derived score used with other survey instruments as it represents the percentage of promoters minus the percentage of detractors.

The Power of Creating Member Delight Building Emotional Bonds and Members for Life

24

93.8%

5.6%1.3%

67.8%

21.5%

2.1%

6.3%

26.7%

72.6%

29.5%

1.6%

4.5%

63.9%

15.1%

4.5%

83.3%

Stronglydisagree Disagree Neitheragreenordisagree

Agree Stronglyagree

OverallDelightCrosstabbedbyILoveMyCAMembership

Stronglyagree

Agree

Neitheragreenordisagree

Disagree

Stronglydisagree

ILoveMyCAMembership

OverallDelight

68.8%

13.3%

.9% 1.3% 1.6%

6.3%

24.4%

14.8%4.2% 1.2%

31.1%

30.0%

10.0%

2.8%

12.5%30.0%

42.6%

60.4%

5.2%

12.5%

1.1%11.7%

24.1%

89.2%

Stronglydisagree Disagree Neitheragreenordisagree

Agree Stronglyagree

OverallDelightCrosstabbedbyNoPlanstoCancelMembership

Stronglyagree

Agree

Neitheragreenordisagree

Disagree

Stronglydisagree

OverallDelight

NoPlanstoCancelMembership

CA members who gave a score of 5 on Delight were 18x more likely to love CA. This clearly demonstrates the impact of delight in generating emotional loyalty and future spend.

CA members who gave a score of 5 on Delight were 3.7x more likely to indicate they had no plans to cancel their membership. This clearly demonstrates the impact of delight in driving loyalty and the intent to remain a member.

The Member Experience Relationship Where CA falls in the member experience continuum

Source: Customer Delight Principle Tim Keiningham

Loya

lty,

Ad

voca

cy, a

nd

Sp

en

d

Member Experience

Zone of Pain Mere

Satisfaction

Zone of Delight

Problem Resolution

Emotional Engagement

25

Overall, slightly more than 50% of CA members indicate they are satisfied with their experience. Unfortunately, CA has garnered more detractors than promoters when it comes to members’ level of delight (satisfaction) with their membership experience, which consequently creates the negative delight scores. Member delight is a powerful predictor of members’ future behavior, in particular their desire to remain a member or recommend others for membership. Interestingly, PP members are more likely than PPP members to rate their experience lower; a pattern that exists across all measures of loyalty.

1.2 0.9 1.3 7.0 5.4

10.4

17.3 17.5 16.3

55.0 56.2 53.4

19.5 20.0 18.6

All Responses Package Plan Plus Package Plan

Overall Delight (Percent of Total)

Strongly agree

Agree

Neither agree nor disagree

Disagree

Strongly disagree

CS = -6 -4 -9

26

Members have a very low emotional bond with CA. While close to 40% of all members indicate they agree with the statement that they love their membership experience, there remains a powerful imbalance between detractors and promoters, with detractors outnumbering promoters by more than 2 to 1. This imbalance is an indication that there is an influential segment of members who are disconnected with and feel negatively toward the Association.

1.8 1.3 2.0

9.6 8.8 11.5

31.0 29.3

33.3

38.9 41.6 34.6

18.7 19.1 18.6


I Love My CA Membership (Percent of Total)

Strongly agree

Agree


Disagree

Strongly disagree

CS = -24 -20 -28

27

Similar to its performance in the other areas indicative of member loyalty, CA has a slight majority of its members indicating they are satisfied, but still more detractors than promoters. Consequently, there is a negative score when it comes to members’ desire to refer friends and associates.

2.0 2.1 1.8 4.7 3.3 7.1

22.3 20.8 25.2

50.1 52.8 45.0

20.9 21.0 20.9


Likely to Refer (Percent of Total)

Strongly agree

Agree

Neither agree nordisagreeDisagree

CS = -8 -5 -13

28

Interestingly, the only loyalty measure in which CA receives positive outcomes (more promoters than detractors), is in regards to remaining a member over the next year. Given the negative performance of the other loyalty measures, these scores would typically be negative as well, but may be positive as a result of contractual obligations.

2.9 2.6 3.3 6.9 6.3 8.4

13.4 12.1 15.5

43.8 44.4 42.7

32.9 34.5 30.0


No Plans to Cancel Membership in Next Year (Percent of Total)

Strongly agree

Agree


Disagree

Strongly disagree

CS = 10 14 3

29

CA members take very little pride in belonging to CA. There are 5x more detractors than promoters when it comes to having pride in CA.

2.1 1.9 2.9 10.0 7.6

14.9

44.5 45.3

41.1

33.0 33.6 33.8

10.4 11.6 7.3


Pride in Belonging to CA (Percentage of Total)

Strongly agree

Agree


Disagree

Strongly disagree

CS = -46 -43 -52

30

In general, Members feel CA has a strong, positive reputation with just over 60% in agreement. However, there is a large contingency of Members who do not feel CA has a good reputation.

.8 0.8 1.0 8.0 7.4 8.9

28.5 27.7 28.5

49.3 49.6 50.0

13.4 14.5 11.5


CA has a strong, positive reputation (Percent of Total)

Strongly agree

Agree


Disagree

Strongly disagree

CS = -24 -21 -27

31

Overall, CA Members are somewhat ambivalent about how the CA staff makes them feel. It appears that nearly 60% are made to feel special, while the others are not. The PP members show much more discontent in this regard than PPP members.

1.8 1.6 2.4 8.6 8.5 9.2

31.5 28.9 35.9

41.8 43.9

39.8

16.3 17.0 12.8


Staff Makes Me Feel Special (Percent of Total)

Strongly agree

Agree


Disagree

Strongly disagree

CS = -26 -22 -35

32

Across the board a large percentage of CA members do not feel the staff make an effort to go out of their way to take care of them. The negative scores in this category are among some of the lowest that CA earned in regards to how members feel about their experience. Again, this is especially true for PP members.

2.4 2.1 3.1

11.0 10.5 12.3

35.2 33.8 38.0

36.1 37.6 34.3

15.3 15.9 12.3


Staff goes out of their way to take care of me (Percent of Total)

Strongly agree

Agree


Disagree

Strongly disagree

CS = -33 -31 -41

33

When asked whether CA management is interested in helping them, CA receives the lowest scores of any measure, with 5.5x as many detractors as promoters. Members feel very adamant about management’s lack of interest in them.

3.5 3.3 4.5

11.8 10.2 14.4

43.6 43.1

45.3

30.4 32.3 27.5

10.6 11.1 8.4


Management is genuinely interested in helping me (Percent of Total)

Strongly agree

Agree


Disagree

Strongly disagree

CS = -48 -46 -56

34

Although CA receives negative scores in regards to keeping its members well informed, most members feel it does considerably better with communications than it does in other areas such as demonstrating interest in the members or going out of their way to help members.

1.3 1.3 1.3 8.6 8.6 8.6

22.2 20.5 25.4

52.9 53.8 53.1

15.0 15.9 11.5


CA keeps me well informed of its events and activities (Percent of Total)

Strongly agree

Agree


Disagree

Strongly disagree

CS = -17 -15 -24

35

Overall, the majority of members (64%) feel they receive a great value with their membership. However, as indicated in an earlier slide, the members’ determination of value is dependent on six elements, and consequently, there is a large segment of Members (36%) who feel there’s an opportunity to work on improving some of those elements to generate greater perceived value.

2.1 1.9 2.4

11.2 10.0 13.4

22.9 21.6 24.1

46.1 48.5 42.9

17.8 17.9 17.3


I receive a great value for my CA Membership (Percent of Total)

Strongly agree

Agree


Disagree

Strongly disagree

CS = -18 -16 -23

36

In general, Members feel the facility maintenance is good, but not great and could use improvement.

1.3 1.4 1.0 8.9 9.6 8.1

14.4 15.2 13.1

58.1 57.4 59.7

17.3 16.4 18.1


Facilities are well maintained (Percent of Total)

Strongly agree

Agree


Disagree

Strongly disagree

CS = -7 -10 -4

37

The Perceived Value of CA’s Offerings to the Community and Members

38

Among the various facility offerings that CA has, the three athletic clubs are considered the most influential when it comes to providing value to the members’ lifestyles. After the three athletic clubs, the swim center garners the most influence. Hobbits Glenn and the ice rink, while not among the top four drivers of value, do have a strong influence among a select group of members.

10.2

10.3

10.7

21.7

42.7

47.8

48.8

37.7

59.6

9.2

9.5

8.5

12.8

18.8

13.6

14.0

18.5

15.3

24.4

25.6

21.3

26.9

22.1

17.6

17.9

23.3

15.6

29.8

30.8

28.1

23.3

8.8

13.2

13.6

13.6

6.2

26.5

23.9

31.5

15.3

7.6

7.7

5.7

7.0

3.4

Columbia Athletic

Columbia Gym

Supreme Sports

Swim Center

Haven

Hobbits Glen

Fairway Hills

Ice Rink

Horse Center

The Value CA Facilities Provide Toward Lifestyles

Very low value Somewhat low value Moderate value Somewhat high value Very high value

19

21

16

21

10

39

60

55

56

Top 2 Box

39

When members are asked about the various services that CA offers and the value each provides with enriching their lifestyle, the pools and bike paths clearly are important to a much broader segment of the community.

12.3

15.0

49.2

32.4

44.0

44.4

39.0

7.0

49.3

58.1

6.8

10.6

11.1

15.0

16.9

17.6

16.6

4.2

10.5

9.2

16.1

22.2

17.6

26.4

21.2

18.3

19.8

14.3

16.6

12.6

25.3

24.8

12.0

17.7

11.5

10.5

13.2

24.4

13.8

9.7

39.4

27.3

10.1

8.4

6.5

9.2

11.4

50.0

9.9

10.4

Outdoor Pools

Indoor Pools

Columbia Dog Park

Sport/Skate Park

Columbia Skate Arena

Indoor Tennis

Outdoor Tennis

Bike Paths/Trails

Summer Camps

Before/After School Care

The Value CA Services Provide Toward Lifestyle

Very low value Somewhat low value Moderate value Somewhat high value Very high value

Top 2 Box

20

24

65

74

25

20

18

26

22

52

40

There is a great deal of interest and appeal among a wide variety of existing and potential CA programs/services. Among the various programs and services that CA can extend members, the five generating the most appeal, in order of importance are: three gym memberships, guest passes to the gyms, group exercise classes, treadmills without an upgrade fee and online registration for group exercise classes.

26.0

16.4

16.7

9.1

6.6

9.2

15.0

5.1

5.5

8.6

11.3

8.8

6.9

9.1

8.4

4.7

4.6

5.2

10.1

2.5

3.2

5.5

5.4

5.2

26.0

21.4

23.8

20.7

16.9

20.2

19.8

11.3

9.6

24.2

26.4

20.1

14.5

20.8

19.8

19.0

27.1

25.7

20.0

27.3

19.4

31.1

26.7

24.1

26.6

32.4

31.3

46.5

44.8

39.7

35.2

53.8

62.3

30.6

30.3

41.9

Kidspace (3.20)

Private Workout Area with Upgrade (3.54)

Womens's Workout Area with Upgrade (3.48)

Treadmills without Upgrade (3.97)

Group Exercise Classes (4.10)

Free Trial to Premium GroupX (3.87)

Premium GroupX with Upgrade (3.60)

Guest Passes to Gyms (4.33)

Three Gym Membership (4.41)

Member Advantage Program (3.76)

Mature Adult Fitness Programs (3.62)

GroupX Online Registration (3.95)

Appeal of Various CA Programs/Services

Very unappealing Somewhat unappealing Neither appealing nor unappealing Somewhat appealing Very appealing

Mean Score

41

Member Perspectives on the Various Benefits Currently Bundled into One or More of the CA Membership Packages* Offerings Perceived to Hold the Greatest Value

# Leading Value Driving Benefits

1 Among PPP members the fee-based group exercise classes is most frequently mentioned as an important value driver for the PPP membership.

2 Among PPP members the PPP rooms, in particular the treadmills is an important value driver for the PPP membership; second only to the group exercise classes.

3 Among the PPP members, the pools (outdoor, indoor and splash down) are probably the third most frequently mentioned value driver for the PPP membership..

4 Among PPP members, having access to all the amenities such as skate park, ice rink, etc., as well as larger discounts on services are contributors to the PPP value equation, but not nearly as important as the classes, treadmills and pools.

5 Among PP members the ability to have access to all three athletic clubs and the outdoor pools are the leading value driver for purchasing a PP membership.

6 Among PP members, the discounts to various programs and services is a value driver, but nota significant one.

7 Among PPP, especially women, the Women’s Gym is a very important value driver as they find the other fitness spaces very intimidating.

* Analysis derived from respondent comments

42

Member and Employee Perspectives on the Opportunities for CA to Add Value to the Various CA Membership Packages*

# Opportunities to Add Value

1 PPP members indicate the group exercise class schedule is not convenient for individuals in HH in which both adults work and have family responsibilities.. This sentiment was also expressed by young single Generation Y members who work outside of Columbia. There are not enough evening or weekend classes.

2 PPP and PP members both indicate that the membership offerings are very confusing and its difficult to really know what is offered and how to access it. In many cases members have no idea what they can access.

3 PPP and PP members all feel the online experience is marginal. It takes too many clicks to find what they are looking for and they would like more ability to register online.

4 PPP and PP members all agree that the Association needs to solicit their opinion more often in regards to their overall experience with the membership as well as their thoughts on the types of services that are offered.

5 The Association needs to do a better job messaging and communicating to its members about programs, services, etc.

6 The Association does not provide much for Generation Y and is seen as nearly exclusively a family focused Association and possibly to heavily influenced on older adults.


43

Membership Offerings Price Sensitivities and Practices

44

When CA members are asked about the price point they would be willing to pay for privileges to the three athletic clubs, with treadmill access included, the prices ranged from $36 a month to $44 a month with an optimal price of $40.

45

When non-members are asked about the price point they would be willing to pay for privileges to the three athletic clubs with treadmill access included, the prices ranged from $33 a month to $38 a month with an optimal price of $37, approximately 10% less than what members indicate they are willing to pay.

46

When CA members are asked about the price point they would be willing to pay for family privileges to the pools and sport park/skate park, the prices ranged from $300 annually to $345 annually with an optimal price of $315.

47

When non-members are asked about the price point they would be willing to pay for privileges to the pools and sport park, with the prices ranged from $285 annually to $308 annually with an optimal price of $300 annually, approximately 5% less than what members indicate they are willing to pay.

48

When CA members are asked about the price point they would be willing to pay for unlimited access to group exercise classes on a monthly basis the prices ranged from $77 a month to $87 a month with an optimal price of $80 a month.

49

When non-members are asked about the price point they would be willing to pay for unlimited access to group exercise classes on a monthly basis the prices ranged from $77 a month to $83 a month with an optimal price of $79, nearly identical to what members indicate as an optimal price.

50

When members were asked the maximum they would feel comfortable paying to be able to play golf at either of CA’s two courses five days a week with no green fees, over half indicated $1,000 annually, while nearly a third indicated they would be willing to pay $1,200 to $1,500 annually.

54%

2%

11%

2% 4%

15%

2% 1% 4%

0%

5%

$1,000 $1,100 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 $1,900 $2,000

No Greens Fee Five Days a Week (N=254)

51

When members were asked the maximum they would feel comfortable paying to be able to play golf at either of CA’s two courses seven days a week with no green fees, 50% indicated $1,000 annually, while nearly 33% indicated they would be willing to pay $1,800 to $2,200 annually.

50%

4% 4% 6%

1%

17%

2%

6%

1% 2%

7%

$1,500 $1,600 $1,700 $1,800 $1,900 $2,000 $2,100 $2,200 $2,300 $2,400 $2,500

No Greens Fee 7 Days a Week (N=246)

52

When asked how much additional they would be willing to pay on a monthly basis if they knew CA would make regular upgrades to the facilities, 46% indicated $5 a month, but 38% indicated they would be willing to pay between $7 and $15 extra a month for the proper upgrades.

46%

6%

11% 12%

3%

12%

1% 1% 3%

1%

6%

$5 $7 $9 $11 $13 $15 $17 $19 $21 $23 $25

Additional Dues for Facility Upgrades (n=895)

53

When asked the maximum they would be willing to pay for one time access to a group exercise class, 60% indicated $10, followed by 18% indicating they would be willing to pay $15. Overall, nearly 90% indicated a willingness to pay between $10 and $15 for access to a single class.

61%

9%

18%

1%

7% 3%

$10 $12 $15 $17 $20 $25

Group Exercise Single Class Fee (N=674)

54

When asked the maximum they would be willing to pay for a ten pack of group exercise classes, 69% indicated $100 ($10 a class), followed by 12% indicating they would be willing to pay $120 ($12 a class). Overall, nearly 90% indicated a willingness to pay between $100 and $140 for access to a package of ten classes.

69%

4%

12%

3% 1%

6%

1% 0% 0% 0% 2%

$100 $110 $120 $130 $140 $150 $160 $170 $180 $190 $200

Group Exercise Ten Class Pack (N=537)

55

When asked the maximum they would be willing to pay for a twenty pack of group exercise classes, 75% indicated $200 ($10 a class), followed by 7% indicating they would be willing to pay $220 ($11 a class). Overall, nearly 90% indicated a willingness to pay between $200 and $260 for access to a package of twenty classes.

75%

7% 6% 3% 2%

4% 0% 0% 1% 0% 1%

$200 $220 $240 $260 $280 $300 $320 $340 $360 $380 $400

Group Exercise Twenty Class Pack (N=590)

56

When CA members are asked for suggestions on how to streamline and enhance membership, the five most mentioned include: offering lower price points (15.4%), creating flexible membership options using a menu approach (14.7%), increasing the availability of facilities, programs and services (14.7%) and improving the facilities (10.9%). The general theme appears to be make memberships customizable to life style needs, make the memberships transparent and simple, make the pricing less costly and increasing the availability and convenience of benefits.

15.4% 14.7% 14.7%

10.9%

8.3%

5.1%

3.2% 3.8%

Lower pricepoints

Create flexibleand simplermembership

plans

Increasedavailability offacilities and

programs

Improve thefacilities

Create moretransparent and

simpliermembership

offerings

Make HOL moreaffordable

More intuitiveand navigatable

website

Make treadmillsavailable to all

Leading Suggestions from CA Members for Streamlining and Improving Membership Offerings*


57

When resident non-members ae asked what could be done to improve the attractiveness of the CA membership offerings, two primary suggestions came forth. First is to lower the price point and second is to create a menu of options so people can fit the membership to their lifestyle.

28.6%

14.3%

Lower the price point for resident non-members Create a menu option for selecting memberships

Leading Suggestions from Resident Non-Members for Streamlining and Improving Membership Offerings*


58

With over 250 total membership categories one would expect considerable pricing variability. The graph below shows the variability in pricing for each of the overarching membership categories, showing the posted resident price, the average price, the minimum price and the maximum price. In some instances the difference between the posted price and average price varies by 34% and the variance between the lowest and highest price varies by 287%.

$47

$24 $19

$50

$79

$264

$159

$43

$12 $22

$46

$66

$197

$112

$24

$6 $5

$25 $29

$85

$51

$68

$24

$59

$75 $84

$327

$181

Athletic Tennis Pool PP PPP Hobbit Fairway Hills

Core CA Membership Variability

Posted Average Min Max

59

The graphs on this page demonstrate the extreme variability in pricing that existing members pay for on the most frequently purchased memberships. The variability between the minimum and maximum pricing ranges from 189% to 287%, while the variance between the posted resident price and the average ranges from 10% to 34%.

189%

207%

190%

286%

Athletic PP PPP Hobbits

Pricing Variance Highest Price to Lowest Price

Variance lowest price to highest price

10% 9%

18%

34%

Athletic PP PPP Hobbits

Pricing Variance Average Price to Posted Price

Variance average price to posted price

60

When it comes to pricing for Kidspace, the price ranges from a low of $10 for PPP with a three year contract to $25 for a member purchasing a single athletic club membership. Furthermore, athletic members do not receive a discount based on the length of their contract while those with PP and PPP receive a discount based on the length of their contract.

$25

$15

$10

$25

$20

$15

Athletic PP PPP

Kidspace Pricing

Kidspace - Min Kidspace - Max

61

Member, Employee and Leadership Perspectives How Memberships are Packaged and Priced

# Perspectives on Packaging and Pricing

1 The Association relies too heavily on discounting and consequently often loses money when driving revenue. The Association is devaluing certain offerings by nature of the bundling and discounting.

2 The Association does a very poor job presenting the value and benefit of its offering and thus residents don't see value in joining. The failure to promote the benefits and value has lead to a low price approach to driving behavior.

3 The Association has not evolved its service and pricing models to address changing industry trends and emerging demographic shifts. Membership bundles do not align with the shifting life stage and lifestyle needs of the Columbia audience and its pricing practices are not always reflective of what members and consumers value.

4 The Association’s pricing practices are grounded in legacy practices that are reactionary approaches rather than strategic pricing decisions. Price has been driven by reaction to a small vocal group rather than a long term strategic vision of how to price based on the consumer experience and what is valuable to them.

5 There are too many pricing variables based on the types of memberships and discounts offered. It would be far better to have a simpler pricing strategy that the members and the employee can understand and therefore communicate.

6 There is a disconnect between the departments delivering the offerings and those selling the offerings, to the extent that no one takes accountability for the packaging and pricing decisions.

62

Employee and Leadership Perspectives* Perceived Barriers & Challenges to Implementing a New Membership and Pricing Structure

# Barriers and/or Challenge to Change

1 A legacy culture that has always tried to be everything to everyone rather than focusing on a core set of initiatives that best serves the needs of the majority of the residents.

2 Legacy/tenured staff who say, "We have always done it this way and it works.“ A complacency to change among tenured staff at the corporate and club level.

3 Board directives grounded in reactionary decisions influenced by a small vocal minority rather than looking at strategic directives based on the larger voice of the entire Columbia membership audience.

4 Legacy thinking that is unbalanced and grounded too heavily in the social directive of the Association’s mission rather than using a balanced scorecard approach that weights decision making based on the social and for-profit aspects of the business necessary to achieve the Association’s vision and mission.

5 Internal legacy systems (software, policies and procedures) that will require work to change

6 A highly vocal group of long–time residents who prefer not to see any change; who are comfortable with the ways things are presently.

* Analysis derived from leadership in-depth interviews

63

Columbia Association Member Life Stages and Lifestyles* Implications for CA Membership and Programming in the Future

# Key Life Stages and Lifestyles to Address

1 Two-parent households where both Work. These are HH where the adults are between 25 and 45, both work and have at least one child. They start their day between 5 a.m. and 6 a.m. and end it around 8 p.m. During this time they have to prepare themselves and family, for the day ahead, commute, work, take kids to afterschool and evening activities and get the family ready for the evening. They have little spare time except on weekends and possibly 30 minutes or so in the evenings. They need to have more express offerings that can fit within their schedule, as well as offerings later in the evening and on weekends when they have time.

2 Retired adults (Empty Nesters or Single). These are adults whose time is very flexible which allows them to use services whenever they desire. Many seek additional social interaction since they no longer work. For some its important to have services available that they can use for their grandkids.

3 Millennial's (singles and DINKS). These are adults between 18 and 35 who are professionally driven, tech savvy and looking for more innovative and challenging program offerings that can fit their schedules and desire for social interaction and “hip” activities. These individuals need programs to be offered later in the evenings as well as on the weekends. They also seek the convenience of an online experience, including information sharing, digital communication and the ability to reserve space online so they know that their offering fits into their schedule.

* Analysis derived from member focus groups

64

Pricing and the Competition

65

In a comparison of individual membership prices among health/fitness facilities in the five county area (Ann Arundel, Baltimore, Howard, Montgomery and Prince George), CA’s stand alone clubs average membership price is 33% below the market average, while the average price for a Package Plan Plus membership is slightly higher than the market average. When CA pricing for an individual club membership is compared to individual membership pricing in the Howard County market then an average stand alone CA athletic club is approximately 56% the average price as reflected in the market, while its average Package Plan Plus membership is approximately 14% less than the average price in the market.

$24

$43

$68

$29

$66

$84

$10

$64

$225

$10

$77

$219

Minimum Average Maximum

Health/Fitness Club Individual Membership Pricing Comparison

CA Athletic Club CA Package Plan Plus Health/Fitness Clubs - 5 County Health/Fitness Clubs - Howard Country

66

When comparing the price of an annual membership (7- day access with no green fees) at Fairway Hills and Hobbits Glen to the competitor’s average price in a five county region, the average cost to a CA golf property is 40% higher.

$1,014

$2,368

$3,918

$999

$1,691

$2,350


Golf Club Pricing Comparison: CA and Surrounding Five Counties

Individual CA - 7 Day Access Competitive Golf Properties - 7 Day Access

67

When comparing the pricing of a seven day access membership between CA properties and the averages for the five country area, it appears that Fairway Hills is priced about 9% below the average for public courses, while Hobbits Glen is priced nearly 100% above the average for public courses in the five counties.

$3,168

$1,536 $1,691

$999

$2,350

$1,495

Seven Day Golf Access Membership Competitive Club Comparison

Hobbits Glenn - 7 Day Fairway Hills - 7 Day Competition - 7 Day Average Competition - 7 Day Min. Competition - 7 day Max. Competition - 7 Day Senior Average

68

When looking at pricing for CA members to use the outdoor and indoor pools compared to the average pricing for private and county operated pools in the five country area, CA’s pricing is favorable, with the average cost for an individual using CA’s pools being priced approximately 15% below the market for an individual and similarly for a family membership.

$56

$265

$702

$89

$315

$465

$92

$437

$1,158

$138

$505

$925


Pool Pricing Comparison: CA and Surrounding Five Counties

CA - Individual Competitor - Individual CA - Family Competitor - Family

69

When looking at pricing for personal training, the price for a CA member is $9 to $12 less per session than competitors charge in either Howard Country or the five county area between DC and Baltimore. Unfortunately, due to the multiple pricing packages offered for personal training it would be extremely difficult to ascertain the true pricing differential since the CA price used for this comparison is the least discounted version based on the purchase of a three pack.

$60

$70 $69

$79

$69 $72

CA Member CA Non-Member CA Member Elite CA Non-Member Elite Health/Fitness Clubs - 5County

Health/Fitness Clubs -Howard Country

Personal Training Pricing Competitive Club Comparison

Avg. PT Price

70

When it comes to small group training (4 individuals or less), CA’s pricing for an individual is above market ($3 to $9), especially for a non-member who wishes to take small group training. Further complicating the pricing is the variety of price options offered based on the mix of members and non-members in a small group.

$23

$33

$20

$24

Small Group Training Average Prices Competitive Club Comparison

Based on 4 or less in Group

CA Member* CA Non-Member * Health/Fitness Clubs - 5 County Health/Fitness Clubs - Howard Country

71

When comparing the cost to play a single round of golf at a CA property, either on a weekday or weekend, with the cost of a round at competitive properties, the CA price is anywhere from $4 to $13 more than the competitors’ average price on a weekday and $7 to $30 more on a weekend.

$27 $30

$46

$29 $28

$40

$54

$33

Competition Avg. -Weekday

Competion MaxWeekday

Hobbits Glen -Weekday

Fairway Hills -Weekday

Competition Avg. -Weekend

Competiton Maxweekend

Hobbits Glen -Weekend

Fairway Hills -Weekend

Comparison of Golf Course Green Fees for 18 Holes Weekdays and Weekends

Price for 18

72

When comparing the average cart fees between CA’s golf properties and those of the public competitors in the five county area, CA’s cart fees for 18 holes are 20% higher ($3).

$18

$15

$16

18 holes

Comparison of Cart Fee Pricing for 18 Holes

CA Cart Fees Competion Five Counties Average Competition Five Counties Max

73

Presently, only CA’s Package Plan Plus members are entitled to a full array of group exercise classes as art of their membership, while members of an individual club are limited. This graphs compares the number of complimentary group exercise classes offered by the competitors in the Howard County area with the number of complimentary classes offered to members at the competitors. On average the competitors offer approximately 8 classes more each week than the average CA athletic club offers Package Plan Plus members, and the leading competitor offers 12 more classes than the leading CA club offers for its Package Plan members.

84

26

62

16

63

11

91 96

50

75

ColumbiaAthletic Club -

PPP

ColumbiaAthletic -Athletic

Columbia Gym -PPP

Columbia Gym -Athletic

Supreme Sports- PPP

Supreme Sports- Athletic

Dance YMCA Lifetime Fitness Quest Fitness X Sport Fitness

Total # Complimentary Weekly Group Exercise Classes Competitive Club Comparison

74

CA Members and Memberships at Other Facilities

75

Nearly one-fourth of existing CA members indicate they possess either a membership at or use another facility

Yes 23%

No 77%

Current Member of Non-CA Club Use of Another Club

76

When CA members who possessed memberships at other facilities were asked the type of facility they belonged to, approximately 34% indicated they belonged to another multipurpose facility (e.g., Lifetime, Sport & Health, Merrit), while approximately 25% indicated they belonged to either a yoga/barre/Pilates studio. The third most mentioned was a fitness-only facility (e.g., Planet Fitness, Golds).

34%

25%

17%

16%

8%

6%

6%

5%

4%

4%

3%

Multipurpose fitness

Yoga/Pilates/Barre

Fitness only

Other (please specify)

YMCA/YVVCA/JCC

Boot Camp/Cross Training

Sports Specific

Boxing/Martial Arts/MMA

Business/Sports Club

Country Club

Indoor Cycling/Rowing

Types of Non-CA Facilities Where Members Belong (Multiple Response, N=273)

77

When CA members were given the opportunity to indicate which other fitness facility they were a member of, over 50% indicated other (see list of other facilities on next slide). The three most popular were a yoga studio, Lifetime Fitness and the YMCA.

56%

18%

10%

9%

5%

5%

3%

3%

1%

1%

1%

Other (please specify)

Yoga Studio

Lifetime Fitness

YMCA

Planet Fitness

Crossfit or Similar Studio

Gold's Gym

Barre Studio

Quest

Waverly Woods Golf Club

The Timbers at Troy

Club Name of Secondary Membership (Multiple Response, N=273)

78

Among the other facilities mentioned by CA members (56% of those offering a facility name), a worksite location was the most prevalent, followed by use a of a private trainer. Among non-CA members Fitness 19 and the Coliseum Gym were the most frequently mentioned.

23.2%

7.4%

4.2%

3.2%

3.2%

Work

Private Trainer

Core Works Pilates

Yoga Center Columbia

Forest Hills Swim and Tennis

Top Five Facilities Under “Other” that CA Members Have Memberships At

4.7%

4.7%

3.1%

Fitness 19

Coliseum Gym

LA Fitness

Top Three Facilities Under “Other” that Resident Non-Members Have

Memberships At

79

The leading reason why CA members have a membership at another club, or use another facility (17%) is due to the availability of classes (e.g., convenience, scheduling capability and times). Other leading reasons include a low or reasonable price point for the offerings (12%), quality of classes (7%), quality instructors (6%) and convenience to where they work (7%).

17%

12%

7% 7% 6%

Classavailability,convenience

and schedule

Low price/one price atreasoanble price

Good quality classes(e.g., Pilates/yoga)

Convenience to work More qualifiedinstructors

Leading Reasons CA Members Use Another Facility

80

Member Behavior

81

Approximately 54% of CA members use one or more of the facilities on a monthly basis, with those using the facilities 8 to 12 times a month being the most prevalent. Consumer data from the commercial health club industry indicates that approximately 44% of members use their facility at least eight times a month.

14.3

2.1

13.7

16.0

22.7

13.2

18.0

NA, not a CAMember

Never Less than 4 times amonth

4 - 7 times a month 8 - 12 times amonth

13 - 16 times amonth

More than 16 timesa month

Monthly CA Membership Usage (Percentage)

82

Approximately 71% of all visits to CA facilities are by Package Plan Plus Members, while another 24% are by Package Plan Members. Overall 95% of facility visits can be attributed to these two membership categories.

71%

24%

5%

0% 0%

0%

Percentage of Total Visits by Membership Category 2013/2014

PPP Member Visits

PP Member Visits

Athletic Club OnlyMember Visits

Tennis Only MemberVisits

Pool Only MemberVisits

Golf Only MemberVisits

-

250,000

500,000

750,000

1,000,000

1,250,000

1,500,000

1,750,000

2,000,000

2,250,000

2,500,000

2,750,000

3,000,000

2013/2014

Columbia Association Visits by Membership Category

2013/2014

Golf Only MemberVisits

Pool Only MemberVisits

Tennis Only MemberVisits

Athletic Club OnlyMember Visits

PP Member Visits

PPP Member Visits

83

When you compare member activity by type of membership with the actual number of memberships in each category, it appears that Package Plan Plus members represent a significantly larger percentage of facility users than they do of the overall membership base, while Package Plan members represent a slightly larger percentage of the facility users than they do of the overall membership base.

70.2%

23.4%

4.8%

0.0% 0.4% 0.0%

61.2%

21.7%

3.9% 1.3%

10.5%

1.4%

PPP PP Athletic Club Only Tennis Only Pool Only Golf Only

Comparison of Member Count Percentage and Member Activity Percentage

by Membership Category

Member Activity % Member # %

84

When member visits are looked at across the major CA offerings (e.g., athletics, golf, pools, tennis) it shows that approximately 49% of all facility visits are to one of the three athletic facilities and another 49% are to the other facility offerings such as golf pools, ice rink, skate/sport park, etc.

2,827,793

1,387,052

59,450

1,381,291

# Visits

Total Member Visits by Core Offering Type 2014

Total Overall Visits Overall Visits to Athletic Clubs

Overall Golf Rounds Other Visits

Overall Visits to Athletic

Clubs 49%

Overall Golf

Rounds 2%

Other Visits 49%

Blend of Member Visits by Offering Type 2014

85

When you break down member usage by the number of facilities they visit during the course of the year, the number of members using two or more sites drops precipitously as the number of sites visited increases, with slightly more than 75% of members using four or fewer CA facilities or sites.

14,805

11,215

6,991

4,239

2,406 1,368

713 349 160 82 37 23 5 4 4 2 5

Number of Distinct CA Sites Visit in 2014 by Members Counts by Number of Visits

# Members

86

An estimated 78% of the members of CA use four or fewer facilities as part of their membership.

35%

43%

16%

6%

0% 0%

Number of Unique Site Visits in 2014 by Range for Members Counts by Range of Visits

Number of Members Use <2 sites

Number of Members Use 3 to 4 sites

Number of Members Use 5 to 6 sites

Number of Members Use 7 to 10 Sites

Number of Members Who Use 11 to 15 Sites

Number of Members Who Use > 15 sites

87

Supreme Sports Club garners the most annual visits, seeing 15% more visitors than Columbia Gym and 22% more visitors than the Columbia Athletic Club. On an average day Supreme Sports Club experiences 1,446 visits.

527,792

410,947

448,313

Supreme Columbia Athletic Club Columbia Gym

Number of Visits to Athletic Facilities 2014

88

133

103

CA Athletics 2014 IHRSA 2014

Average Visits per CA Member with Access to Athletic Facilities

Visits per Athletic Member

For the 2014 fiscal year, the average number of annual visits a CA member made to a CA athletic facility was 133, approximately 30% more visits than the average number of annual visits reported by IHRSA for a multipurpose club in its 2014 data. This would indicate that the average CA member is more active than the typical U.S. health club member.

Hobbits Glenn and Fairways Hills both experienced approximately 30,000 annual rounds each of the last two years (2013 and 2014). When the rounds per CA property in 2013 are compared with the industry average for 2013, as published by the National Golf Foundation, the two CA properties fall slightly below the industry average. Furthermore, when compared to the average number of rounds the NGF indicates are needed to be profitable for a public course, the CA properties fall approximately 14% short.

29,731 31,034

60,765

30,344 29,106

59,450

Fairway Hills Hobbits Glenn Total Rounds

Number of Golf Rounds Overall and by Property 2013 and 2014

2013 Rounds 2014 Rounds

29,731

31,034

31,720

35,000

Comparison of CA Golf Properties with National Golf Foundation Data for 2013

Rounds per 18 Hole Course

Fairway Hills Hobbits Glenn NGF Average NGF Profitable

90

Key Financial Benchmarks

91

87%

13%

66%

34%

Membership Revenue % Other Revenue %

Revenue Mix in CA Athletic Clubs

CA Athletics 2014 IHRSA 2014

When the revenue mix (membership revenues and ancillary revenues) of CA’s athletic facilities is compared with the average revenue mix of a multipurpose health and fitness club as reported in the International Health, Racquet and Sportclub Association’s (IHRSA) 2014 data, CA’s facilities reflect a significantly lower percentage of revenues being generated from ancillary (non-dues) sources, indicating a potentially strong upside if systems are put in place to increase revenues from these sources.

IHRSA metric based on data from 2014 IHRSA Profiles of Success.

$1.10 $1.24

$1.49

$3.26

Columbia Athletic Center Columbia Gym Supreme Sports IHRSA

Non-Dues Revenue per Athletic Club Visit 2014

Non-Dues Revenue per Visit

When the average non-dues revenue per visit for the three CA facilities was compared with the average for multipurpose clubs as represented by IHRSA industry data from 2014, it indicates that CA’s facilities preform at anywhere from 33% to 45% of the revenue productivity of the average IHRSA multipurpose facility.

IHRSA metric based on data from various IHRSA reports from 2014. Metric is based on median revenue for a multipurpose club, average split of dues and non-dues revenue, median membership count and average visits per member.

When the percentage of facility revenues from personal training and small group in CA’s athletic facilities is compared with the averages for multipurpose clubs as represented by IHRSA industry data from 2014, it indicates that CA’s facilities underperform, with personal training performance at just over 60% of the industry average and small group training at 33% of the industry benchmark.

4.6%

0.3%

7.5%

0.9%

12.2%

1.5%

Personal Training Small Group Training

Personal Training and Small Group Training Revenues Comparison to Industry Averages as % of Revenue

CA IHRSA 2014 Median IHRSA 2014 Max Middle Range

IHRSA metric based on data from 2014 IHRSA Profiles of Success.

When the revenue productivity of the tennis program (non-dues revenue per tennis court) was compared with some three market-leading tennis clubs located in the South Central and Western regions of the U.S. it showed that CA’s tennis productivity exceeded two of the three properties and only fell below a high-end prestigious club from the West Coast.

$37,576

$30,064

$35,297

$85,641

CA (33) Club A (12) Club B (12) Club C (12)

CA Revenue per Tennis Court Comparison to Three Other Clubs

One of the two most important measures of golf productivity is the average non-dues revenue per round. When comparing the performance of Forest Hills against Hobbits Glenn, Forest Hills generates more than three times the non-dues revenue per round. In 2009 , during the height of the last recession, the average public golf course generated just over $25 in non-dues revenue per round.

$36.45

$10.27

Fairway Hills Hobbits Glenn

Non-Dues Revenue per Golf Round 2014

Non-Dues Revenue per Round

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