The Pellucid Perspective - December 2011 - (Page 5)

BEST APPLIED PRACTICES Are no-shows the hidden assassin? By Harvey Silverman ou’re a northern clime golf course looking at a surprisingly pleasant forecast for the upcoming holiday weekend. Your course is still in very playable condition, and you’re hoping to capture a little revenue that was lost during the terrible spring. You blast out an incredible special rate to your email database, and BAM! the tee sheet lights up like the Christmas tree you just placed in the clubhouse. You sell out Friday in two hours, and Saturday and Sunday several hours later. You’re thinking, “Oh, baby, come to Daddy.” Friday dawns sunny and cool, but with no wind and temperatures eventually in the low 50’s. It’s a seasonal heat wave. This is Golf Playable Hours galore, according to Pellucid. Then reality sets in. Groups show up with two instead of four people, three instead of four, or…NOT AT ALL! The no-show percentage climbs to 27%. The No-Show Assassin has struck, blowing holes in your tee sheet from behind the grassy knoll. Back in my golf software selling days, one of the most exciting features was the ability to flag no-shows, ostensibly to enable course operators to track and control them. This feature alone accounted for a couple sales because no-shows had recently popped up on golf ’s radar as a growing problem. This was back at the height of the golf course building boom and supply glut. In fact, while one can argue that “supply begets demand,” one might also argue that supply begot no-shows. Golfers had more choices to play. Some even started using online reservation capabilities to troll for available tee times, make multiple reservations, then contact their buddies with the options so they could choose the best. Were cancellations made at the other courses? Occasionally, at best. The hotel industry succeeded many years ago in convincing credit card companies to uphold card charges related to noshows. They started with Diners Club (anyone still have one of those?) and others followed suit for competitive reasons. At the same time the credit card companies assisted hotels with the language and processes they use to properly communicate their policies that the card companies uphold. Roughly 99% of the time someone refutes a no-show night’s charge, the hotel wins. The rental car industry discussed this in the past couple years and decided to forego no-show charges for the time being. The issue for them had to do with shrinking fleets creating a higher likelihood of a renter not getting the car he wanted, or not getting a car at all. But they have the support of the credit card industry and we can expect car rental no-show charges to happen some day. Unfortunately for golf, we do not have a strong, organized industry coalition to present a united front to the credit card industry and gain its support. It’s every man for himself. And to that, we’ve found in our informal polling that the majority of course operators have adopted Tony Soprano’s sorrowful lament www.PellucidcorP.com Y with a shrug of the shoulders, “Whaddaya gonna’ do?” But we also found some who have taken the bull by its horns, made tough decisions, and implemented programs that have successfully and significantly reduced no-shows. At Green Valley Ranch in Denver, General Manager Matt Bryant did an audit at the end of 2009 and learned just how much no-shows were costing him. Even his members were taking advantage of him, likely empowered by their “status.” Bryant instituted a new policy in 2010 that charged members a set fee for not showing up and not calling at least 24 hours in advance to cancel, and charged daily fee golfers one greens fee. He began requiring credit cards to reserve a tee time, both online and over the phone. He trained his staff to convey a consistent message with every reservation that gave fair and proper warning of the consequences of noshowing. And, he appointed one staff member to field all complaints and empowered this person to offer a rain check equal to the credit card charge. No-shows have dropped by more than half. Roughly 50-65% of the people who get charged for no-shows complain. Those who accept rain checks redeem them just one-third to one-half the time. Some will file a dispute with their credit card company, and Bryant reports “we win some, we lose some.” A major golf course management company conducted a comprehensive, three-year case study on no-shows. Experiencing an average 20% no-show rate across their properties, this company started requiring credit cards to reserve a tee time and trained staff to consistently state the cancellation policy to each customer. That alone dropped the no-show rate by half. The second year they instituted a set fee for no-shows, $10-$15, and gave staff some directed empowerment to refund the charge on a case-bycase basis. The no-show rate dropped again. Now in year three of the project, customers have been trained, staff communicates consistently and effectively, and no-shows have dropped to about 2%. In both cases course management has effectively killed the assassin before the assassin could kill them. They used tracking functions provided by their point-of-sale systems to measure the amount and impact of no-shows. They made tough decisions (especially tough in a poor economy), instituted new policies, trained staff on how to communicate the policy, stuck to their guns, and have achieved success as measured by a significant decrease in no-shows. For those fearful that such policies will drive customers away, it has not hurt Green Valley’s business – their rounds and golf revenue are up this year in the face of a market in decline. As we see it you have two choices: Shrug your shoulders and acquiesce; or take control of a costly problem and minimize it. If you have a story to tell about no-shows, we’d love to hear about it. Use the “Discussions” tab so all can read it, or send your story n in confidence to me at harvinfc@pacbell.net. The Pellucid PersPecTive 5 http://WWW.PELLUCIDCORP.COM

Table of Contents for the Digital Edition of The Pellucid Perspective - December 2011

The Pellucid Perspective - December 2011
Municipal owners beware! Landmark ruling due in Ohio
Are no-shows the hidden assassin?
Dismissing weather impact: A cunningly clueless concept
Living in the past
If you promote it, they may come
November weather impact: Good month for the Sunbelt
Philadelphia, PA Core Business Statistical Area (CBSA)
Surprise, resort developer favors new resort!
We could use your help

The Pellucid Perspective - December 2011