Our Club offers exceptional value, from its popular events, to F&B, gym workroom and other facilities. In fact, our monthly subscription fees are the same as they were at the end of the last century, the Board said in a statement.
Thats an incredible achievement and testament to the prudence of our successive treasurers and managers, especially as many other clubs have increased dues by almost half over that time.
But in recent years, the FCC has stayed in the black operationally through our own version of quantitive easing: expanding the membership to boost admission fees and revenue from monthly subs.
Such policies cannot continue forever, since we want too ensure the comfort of members and the availability of their clubhouse. This year, we have budgeted for an annual loss and operational revenue is down.
While we can absorb losses in the short-term, the thorny issue of recurrent revenue that needs to be addressed. Costs have risen our rent increased 10% this year, while wages in the hospitality industry have increased well above inflation over recent years amid greater competition.
Steps taken in recent years include raising associate going fees from HK$10,000 to HK$25,000, and corporate membership from HK$50,000 to HK$250,000. Weve let more people in after research found hundreds of fee-paying members never use the Club and members took the painful decision last year to alter the terms of silver membership without which we would be facing a rapidly mounting shortfall in revenue. Our overhead count hasnt risen at anywhere near the pace of our membership numbers.
While our reserves are healthy, we need to spend millions in the next year or so on much-needed repairs and renovations, and upholding our responsibility as custodians of a Grade-1 listed heritage building.
In recent history our pricing decisions have been made ad-hoc foregoing the semi-annual service-levy in the good times and raising F&B prices in the bad. In future, the Club would be best served by an annual review of subs and F&B prices together when budgets are drawn up, and adjusted up or down accordingly.
For now, we are reviewing all expenditure to see how we can trim costs without affecting the high level of service and standard of facilities members expect. And just last month, the Board decided to limit the number of new correspondent and journalist members who can join under the programme that offers a rising scale of subs system.
Despite all that, the treasurer has indicated that we will still face a widening annual deficit that cannot be ignored. Kicking the can down the road is the easy option for governors elected annually, but that can only go on so long.
So, what to do about it?
Do we simply look at raising monthly subs across the board, which we know will hurt everyone, and some more than others? Or should we be more creative and examine other options, constitutionally difficult as some may be?
For example, most clubs set a minimum monthly spend to reward people that use the club. Many charge additional fees for spouses and families. Should admission fees be increased further? Do we combine multiple measures?
While the Board of Governors is elected to manage the budget and decide these issues, we want to hear from you as we move forward with discussions. We plan to host a Town Hall meeting in early April for members to attend and have a say. You can also email me constructive thoughts and suggestions. We will consider them.