Minnesota Golfer - Directory 2011 - 10
(editor'sletter)
Paying More, Not Just Playing More
T
he time will come when we pay
more to play the game of golf-
but it can't come soon enough.
Sounds crazy, right?
Given that milder weather saved a lot of
bacon after a warmer and wetter-than-normal
summer, rounds were up 128 percent for
Minnesota in October. That transformed an
awful golf season (rounds down 4.0 percent)
into an almost positive one (rounds down just
0.2 percent through November). However,
rounds aren't the sole barometer of success.
" Rounds up, but revenues down, " in the
words of one stakeholder, " is not a sustainable
model. "
In other words, if the facility is not maximizing
its revenues per available round
(after weather and pricing strategies are factored
in), it's fi ghting a losing battle. Golf
courses are not the only ones that should be
concerned with this sustainability-golfers
should be too.
Simply put, revenues are down because
we're paying less for golf. It's supply and demand
at work. Golf tee times (supply) are
more plentiful than golfer rounds (demand).
What happens when demand is soft? Prices
fall until demand exceeds supply. If we could
shrink the supply, demand would drive prices
up. But in the case of the golf business, it takes
years to adjust the supply. Unlike most other
small businesses, it's often several years and
multiple owners before a golf course closes
its doors, thus freeing up golf rounds to go
elsewhere.
Golfers could play more rounds to drive
demand, but given our short golf season and
fi ckle weather, that promises slight relief.
Furthermore, if the early spring and late fall
rounds are indicative, it's the weather that
most affects demand.
So, if we can't move the needle in a signifi -
cant way on supply or demand, what gives?
Prices. Golfers are exposed to golf discount
offers galore: value-adds, loyalty programs,
pay-ahead ( " golf card " ) programs, affi nity
group discounting (junior, senior, resident
rates, etc.), off-peak pricing and straight rate
discounts abound (according to " Outside the
Ropes, " Vol. 8, No. 12). Discount programs
are so ubiquitous that many participating facilities
don't have the tools or staff to track
their effectiveness. While it's a golfer's dream,
it's not a " sustainable model. " And responsible
golfers, as stewards of the game, should
care whether their favorite golf course is economically
viable or not.
Discounted golf creates price shoppers and
chips away at the golf course's brand equity.
Play a $75 golf course for $26 (or the price
of a golf cart, which is a popular discount
offer), and you now have a $26 golf course.
Of course, value-add, loyalty, frequency and
affi nity programs have a place in every golf
course's marketing arsenal, especially if they
reward loyal, frequent customers. But indiscriminate
discounting, such as third-party
aggregators, serves no one's brand or bottom
line. It only shuffl es rounds of golf around in
a downward spiral in price.
Stakeholder organizations at the local
level have wrestled with demand for several
years, and there is no ready answer. Since demand
is largely at the mercy of the weather,
we pray for fair skies. And, yes, we also hope
that we start to see an increase in the price
of golf-it's a sure sign of economic viability,
and that's good for golf.
See you on the tee.
W.P. Ryan, Editor-in-Chief
8
MINNESOTAGOLFER Directory 2011
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Minnesota Golfer - Directory 2011
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