The Pellucid Perspective - July 2011 - (Page 13)

TOP PROPERTIES Life at the top of the market By Jim Dunlap t is no secret that the recent economic conditions, along with the other factors bedeviling the public golf sector, have probably hit the middle to upper middle tier courses hardest. (Private clubs have their own set of problems, although it seems logical that the same is true behind the gates, with the mid to upper tier clubs facing the toughest challenges in member recruitment and retention). For the premier public properties, however, that doesn’t mean life at the top is still champagne and chocolates, or that they can blithely discount their way down to the next price point and still make their bankers happy. KemperSports President Josh Lesnik admits that the company’s flagship Chicago property, The Glen Club, is favorably placed in an affluent and populous demographic, with a Tom Fazio-designed course carved out of a former Navy base site and a golf-happy membership component of approximately 250 to augment the public play. Still, Lesnik said, “We’re certainly not recession-proof.” Lesnik said the club works extremely hard to provide both the members and the daily fee players with a private club level of service, which is understandable, given the club’s weekend rates of $185 plus a $23 cart fee. Even with that base, though, Lesnik said the club has analyzed the tee sheet carefully and worked out a yield management pricing structure for the slow times that Lesnik said has “rounds getting back to the good old days.” High end daily fee properties finding different ways to protect their price point I PGA the key – programming, groups and amenities, that is Virtually every golf market of any size has a few properties which are clearly a notch above the rest in terms of price. The ones who hold onto that distinction in these times, however, typically do so with more than the quality of the golf course. Increasingly, even top-rated public facilities hang onto their clientele with engaging programming throughout every aspect of their facility. The 1757 Golf Club in Dulles, Va., is the successor to the illfated Presidential Club, which ran out of capital before it could be completed. A new group of backers and Billy Casper Golf rescued the half-completed course before it was turned over to developers two years ago, and created a high end daily fee course that opened its full 18 holes in May, 2010. At a $92 peak rate, it is among the priciest public tracks in the area, although it has a fair amount of company in that echelon. What separates 1757 from its competitors, said Casper Operations SVP Joe Livingood, is what goes on off the course. “We do a LOT of programming, both on and off the golf www.PellucidcorP.com course,” Livingood said. “Social, family, almost every day something is going on. We create other reasons for people to go to the course besides just playing golf. At 1757, golf is not the primary driver, although it’s a big part.” 1757 programming runs the gamut from kids play free golf to glow ball tournaments, casino nights, a “chipping, chicks and chocolate” event and other activities involving every facet of the facility. San Diego is among the country’s priciest non-seasonal golf markets, but it doesn’t take long to call the roll of Troon Golfmanaged Maderas Golf Club’s peers atop the daily fee price point. With a resident rack rate of $135-165 and $170-210 for non-residents, the Johnny Miller-designed Poway layout has still racked up a recession-fighting 3 percent rounds increase this year and a revenue increase of over 10 percent. “The club has resisted every urge to engage in the [price] race to the bottom,” said Maderas’s general manager, Bill O’Brien. “We have strategically added value opportunities over the years to maintain price point and still maintain our brand and image.” While the club gets a degree of steady play from its loyalty members of the Maderas Advantage program who play for $89-$99 instead of the regular resident rate, its key to success is largely group play, with a steady dose of visitor play resulting from the club’s constant interaction with hotels and tourism promotion groups in the area. In turn, the reason for the group sales volume is a group sales staff and program based on the hotel model. “We have two catering sales managers who are specifically tasked to grow corporate and social group activities,” O’Brien said. “We also have two golf sales managers dedicated to driving group business.” The club also caters to the local community and its Maderas Advantage members with non-golf social events like its Burgers & Bottles night, as well as what O’Brien calls “surprise & delight” events each month like free club regripping, shaft or spikes replacement, as well as a strong junior golf program. Discounting not the only price solution At many properties, the knee jerk reaction to the current recessionary climate has been to drop greens fees in hopes of capturing increasingly price-conscious customers. Properties at the higher price points would seem to have the advantage in that discounting battle, based on the fact that they have more room to come down a few dollars on their fees before slamming into the barrier where revenue doesn’t meet operating expenses. That overlooks numerous complications, howThe Pellucid PersPecTive 13 http://WWW.PELLUCIDCORP.COM

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

The Pellucid Perspective - July 2011
Contents
The PGA of America hits the restart button on player development
Permanent tee times, Chicago style
Positive P.R. leads to course record revenue month
Exploring the alternative golf universe
Jun 2011 YtD weather impact, May 2011 YtD utilization
Life at the top of the market
Minneapolis, MN Core Business Statistical Area (CBSA)
Comings & goings
Musings from the rough

The Pellucid Perspective - July 2011