President’s Report 2016

At the start of our term the Club was in a strong and stable position. Well run with an agenda to maintain the Club’s viability in what has proven to be a difficult trading year. On this note, I would like to thank the people who have brought the organisation to what it is today, something that we all should be very proud to be members of.

Firstly, the Founders, men with vision and compassion who saw a need and did something about it. I doubt in those first meetings anybody foresaw that the Club would become the entity it is today. Unfortunately many of them are no longer with us but those that remain continue to provide valued counsel and guidance and remain influential in the future direction of the Club.

Secondly, I would like to give my appreciation to former members of the Executive Committee who have built on the founder’s vision. These are totally voluntary positions and they have given time, effort and skill to maintain and grow the Club. Some of these the Committee wishes to recognise their service by proposing they be made life members. The Committee of the Club are just caretakers whose primary responsibility is to handover the Club to the next generation in good order. This Committee has met that responsibility.

Thirdly, I would like to thank the current Committee. George and Jim who provided the backbone and stability. Andre, a powerhouse of ideas and go forward attitude that transformed the Public relations role. Dick, who epitomises conscientiousness and attention to detail.  Noi, whose caring and logical approach reminds us all of our community spirit, she is the soul and conscience of the Committee. Geoff, a stalwart of the Committee who brings common sense to all our meetings. Peter, who reminds us that the club is about its’ members and not just a business to be managed. Mike, Founder, historian who reminds us of the traditions of the Club and whose breadth of local knowledge has proved invaluable.

Unfortunately, during the year our President Peter Molhatra who was elected at the last Annual General Meeting resigned due to time constraints. Peter’s multi roles in running the Pattaya Mail and involvement with Rotary and Lions International plus many other local organisations made it impossible for him to give the time required to attend to the affairs of the Club as well as he would have liked. Peter has been a great servant of the Club since its inception. Fortunately, Peter is still involved in the Club in his important role of President of the Registered Committee and continues to make a valuable contribution. The Committee elected me President in his place and I can attest that they are very big shoes to fill.

Fourthly, I would like to thank our staff who provide an excellent service to members and whose dedication in sometimes trying times is without doubt.

Lastly, I would like to thank all members, whose generosity and support of events and charity has been at times inspirational.

Voucher Sales

One item that was a “stone in the shoe” of last year’s Committee was the issue of the legality of sales of golf course vouchers. This has been and remains an important income stream for the Club. As background, there was some doubt as to the legality of the Club conducting this business and what were taxation implications? Voucher sales had been suspended for nearly a year. In my role as Golf Chairman, I set about resolving this issue as an immediate priority.

In summary, many meetings were held with lawyers and our auditors who were unanimous in their opinion that the Club was within its’ right to conduct this business, as long as certain conditions were met. We have met those conditions and voucher sales have been re-instated but more on this in the golf report. This item is no longer on the Committee’s agenda.

I would personally like to thank Dick Caggiano for his valuable contribution and assistance in resolving this difficult issue.

Financial and Membership

These two facets of the Club’s operations are so entwined and interdependent that it is impossible to separate them. At the start of our term the Committee had a negative view of the prospects of Pattaya maintaining its previous tourism numbers. The Committee also noted that there was a general shift in the origin of tourists from western countries who are more likely to play golf to China who generally do not. The Committee projected that last years “high” season would be a “mid” season at best (and so it turned out). There had been a trend of declining membership over the previous three or four years and our concern was that this would continue if not worsen.

In view of the above the Committee put a two pronged policy in place.

Firstly, we concentrated on membership numbers, stopping the rot of declining membership. Andre was instrumental in this, the web site was further revamped to become more informational for those who don’t know Pattaya and also a determined effort is ongoing to improve our social media presence. Andre’s report provides much more detail of the success of this but needless to say that despite the general downturn our membership numbers have only declined by an insignificant amount of less than 100.

Secondly, a programme of fiscal responsibility was put in place. Monitoring costs and cash flows to maintain cash reserves was of the highest priority. We place great emphasis on maintaining our cash reserves to ensure the continued existence of the club in the long term.

The Committee has also identified that the inclusion of sports that have appeal to Thai nationals should be pursued. Soccer, badminton, cycling and volleyball are examples of sports which may increase membership. We also believe that tennis has a broad appeal.

Income Streams

Golf drives the Club’s revenue with well over 90% of income derived from golf associated areas. Whilst this fact remains we are in danger of becoming a “one trick pony” with the inherent risk that as golf declines so do we. Thailand is becoming relatively expensive in the world market for golf tourism and coupled with the growing competition due to the expansion of golf resorts worldwide it is difficult to see golf tourist numbers increasing.

Accordingly, the Committee is looking at driving other reasons for membership. We have identified the discount book as a key driver for membership. It will take a complete revamp and determined effort to promote this as a reason for membership, but we are confident that this is imminently achievable. After the expansion of the discount book is complete it our intention to implement a promotion of the discounts available as a reason to either join the Club or retain your membership if you cease playing golf.

A better and improved presence with Thai nationals has also been identified as a means of protecting revenues. We now have both our website and face book page available in both English and Thai. We believe that PSC should become more inclusive of Thai nationals and should not be seen as purely a farang organisation. It should be seen as a Pattaya organisation bringing people together of all nationalities pursuing sports and helping our local communities. It would be our aim to have more Thai’s involved in PSC events both social and competitive. We have no doubts that this will be a long, slow and arduous process but it a process that should be undertaken.

The Committee has also just approved the implantation of an online payment scheme where potential members can join and pay online, existing members can also renew online. Under this system they will be able to print out their membership card including photo. We believe that we are not fully utilising the number of hits that our web site receives and that an ability to join online, instantly will boost membership by capturing those that look and think “I should join that” but when they arrive in Pattaya forget or it becomes too difficult. This scheme may contain a hidden gem in that a potential exists for us to pick up a large number of members internationally who wish to possess an official USGA handicap but are not members of a golf clubs. Without research I would suggest it is possibly the cheapest means in the world to have an official USGA handicap.

During the year the Committee introduced banner advertising on the web site. This has been used to offset costs using contra arrangements and is a future source of income. It is our intention to promote this more aggressively in the future.

Costs

The Committee can see some tough years ahead and as a result we are strictly controlling costs. Many factors re-inforce this view, declining tourist numbers, declining spending by tourists, the continued strength of the Baht making Thailand a more expensive place to live or visit and the false premise that Thailand is subject to political upheaval. Many of these we can’t control but every member should take the opportunity to dispel this falsehood and whenever possible re-inforce the fact that Thailand is a great and safe place to visit.

One of our largest line item costs is the licensing of the software for the handicap system. We are currently capable of maintaining 4,000 handicaps but the software costs are around 450,000 Baht per annum. We have looked at this software with local programmers and it is basically a simple database. We have commissioned the writing of the database at the cost of 150,000 Baht. Our current licence ends in February 2017, we expect to have the software available by October this year and will run both systems concurrently during December to end February 2017 when the new system will come on line. It should be fully tested but another teething process will be in store for members. We anticipate an annual maintenance fee of around 60,000 Baht. Therefore in the first year we will save 240,000 Baht and in subsequent years 390,000 Baht. The software will be our property and no license fees will accrue.

I know that many of you would be aghast at the cost of the handicap system. If you were to ask the average member what is our most valuable asset? Some would say the building and some would say our cash reserves. They both would be wrong our most valuable asset is our handicap system. It drives much of our revenue and membership and on this point it is critical for the Club to maintain its USGA membership and retain the right to issue officially sanctioned USGA handicap cards.

We are also fortunate that our largest expense item, charitable donations is discretionary spending. The Committee will continue to monitor income and will make charitable donations accordingly. We have a number of donations that are ongoing and already budgeted for and any new application will be reviewed on a case by case basis and on the proviso that our cash reserves are maintained and it meets our donating criteria.

Charity

Noi Emmerson early in the year pointed out to the Committee that there is very little to no recognition of PSC within the Thai community despite decades of generosity. Although surprising, this can be easily explained. Over the years many of our donations have gone in third party charity donations. These are donations where another charity, say Rotary, Lions, YWCA et al have a project and they request funding from PSC which often is given. Whilst there is nothing wrong with this and they always acknowledge our contribution the perception is that the donor is Rotary, Lions or whoever the lead is on the project. This Committee believes that it is necessary to raise the profile of the PSC by taking the lead on charity projects. We are part of this community, many of us have Thai wives, partners and family. We must have recognition for what we do, raise our brand and integrate into the community. Our charitable work is a key component in achieving this. I cannot stress the value and importance of both integration and inclusion within our community. It will reap great benefits in the long term.

Consequently, we have initiated a couple of ongoing projects such as vision care and the distribution of PSC branded school supplies to poor schools. Other projects are in the formative stage. This does not mean that we will not consider third party donations but they will be at a disadvantage to our in house projects.

The Years Financial Results Highlights

The following table (in Baht millions) reflects the performance of the club for the year with a comparison to the previous year:-

 

Item 2015 2016
Cash on Hand/Deposit 10.60 10.40
Charity Donations 2.04 1.77
Member Fees Received 4.70 4.61
Operating Expenses 3.72 3.89
Donations Received 1.60 0.75
Operating Profit 1.07 0.21

Notes to the above table:-

Cash on Hand

Basically the same. The Club has an ongoing liability to members in prepaid subscription fees and at balance date this liability was 6.2 million Baht. During the year we suffered some serious failures with our computer hardware seriously affecting the Club’s operations. One such failure within the e-mail system catastrophically effected the marketing of the Charity Classic. A portion of these cash reserves has been set aside to upgrade our ageing hardware during the coming year.

Donations

Down 270,000 Baht but in the time since closing of the books a further 250,000 has been given. This was monies approved by the Executive Committee before April 30th.

Members Fees Received

Basically the same, which is an excellent result considering the difficult trading year.

Operating Expenses

This is what it costs for us to open the doors and provide the service levels, parties, golf tournaments and other member benefits. We will continue to monitor closely these costs as the total is inching towards membership fees received.

Donations Received

Down 850,000 Baht. The majority of this was a bequest for nearly 500,000 baht received in the previous year. The balance would reflect the reduction in voucher sales.

Operating Profit

The Club is living within its means.

I have provided the following graphic illustration to show that there is a direct correlation between membership fees received and charitable donations. From the chart it is clear that donations are entirely dependent upon membership level. The upper line reflects membership fees and the lower reflects donations given. The trend lines practically run parallel. If we remove the effect of last year’s anomaly of the bequest of 500,000 Baht which was fully donated in that year then this Committee has effectively increased the level of donations in real terms over the previous year.

 

Information Flow

It is the view of the Committee that we maintain the information flow to the Elective Members. We will continue to conduct a mid-term information meeting where the Committee will provide progress reports and be available to respond to your questions. The meeting held this year was a complete success and we hope that you avail yourselves of the opportunity to attend the future information meeting.

Vale

It is with great sadness to report the passing of two great stalwarts of the Club. Fred Horning a Founding Member and many term Executive Committee member and Herbie Ishinaga a past President. We respect their legacy and will ensure it continues by preserving, protecting and continue to build the Club.

Summary

The Committee has implemented or is planning to implement the following policies:-

  • Fiscal responsibility control costs
  • Respect and value the traditions of the Club and the reasons for its establishment
  • Integrate more fully in the Thai community
  • Raise the profile of the Club
  • Develop new income streams
  • Preserve and protect current income streams
  • Expand the range of sports we are involved in
  • Develop membership other than golf
  • Ensure joining the Club is easier, quicker and simpler
  • Develop proprietary handicap software for large ongoing savings
  • Effectively use social media in promotion of the club
  • Continue to donate generously to worthwhile causes
  • Have total transparency with membership

Why we do this, the humanity of it.

I was sitting at my desk, thinking about what to write in this report, lost in thought, my mind turned to the day before. On that day I went to the Fountain of Life to present a cheque for a 100,000 Baht we were donating on your behalf. For those of you that don’t know the Fountain of life is an orphanage that looks after children who are abandoned, abused or both. Bernie and Woody are deeply involved in helping this institution.

As I entered the building there were two little kids, sitting alone but huddled closely together on a chair, they were so small and vulnerable, they couldn’t have been older than three. They were twin girls, beautiful, charming, identical replicas of each other, they looked so incredibly sad and scared that my heart went out to them. I was drawn to them, I wanted to make them feel better. I looked around and saw the office which has a large glass panel, in the office was their mother. She was going through the bureaucracy, the paperwork to leave her children behind. It was at this point that I realised that what we do makes a real and tangible difference. We couldn’t fix this fractured family, we can’t help everybody but we do make a difference. I knew then what the cheque was really for, it became human and it was to help those two abandoned little girls build a life. It was not the mother’s fault, I could see she was broken hearted, it was not the kids fault they were so innocent. It’s just the harsh realities of life. It’s so easy for us to miss the tragedy that surrounds us as we become conditioned to it.

It’s your money helping those kids, rebuilding shattered lives. I wish you could experience the conflicting joy and sadness in my heart at that point. It was the joy of giving and helping and the sadness of why. I felt compelled to share this story with you so that you will better understand, by simply being a member, for such a small amount, together we can change lives.

In Conclusion

For those of you who intend to attend the AGM I thank you in advance for your attendance, for those who cannot I hope you find this report informative. This I believe is the first time that most of the Annual Report has been circulated prior to the meeting. We have made this choice so that you have time to properly digest its contents and for the sake of clarity. The full set of audited accounts will be available at the meeting as usual.

It is not our intention to read our reports at the AGM, merely to move their acceptance. We will of course answer any questions on the reports either at the meeting or in writing.

Finally, it has been an honour to serve on your Committee.

 

June 2016

Maurice Roberts

President Executive Committee

Pattaya Sports Club