The Pellucid Perspective - June 2014 - (Page 8)

GOLF COURSE OPERATIONS Winning team produces a turnaround success story By Harvey Silverman A recent email from a loyal reader accused Pellucid of being "the Stephen King of golf," saying "You guys write one horror story after another." While it would be nice to have Mr. King's readership, our response to that charge would be that we don't make the news, we merely report it and attempt to explain what it means. But with that stinging criticism residing in my Inbox, I thought I'd don my Dr. Seuss persona and write a feel-good story, more a Thidwick than Grinch. In March, 2013, we were contacted by Mike McCall of McCall Land Management. McCall had just been hired as the new general manager at Putnam National Golf Club, a course owned by Putnam County, NY. Hired as an independent contractor, McCall oversees the financial operation of Putnam National and reports directly to the county legislature. Additionally, the county hired a new caterer for food and beverage operations, Homestyle Caterers, and appliedgolf, a golf management company, to manage golf operations and marketing. It seems like an unusual arrangement, but as you'll read below, it has worked famously well. McCall's keys to figuring out what had been happening at Putnam were to obtain and analyze macro-market information, along with crunching data from his FORE Reservations (now GolfNow Reservations) point of sale system. Our Golf Local Market Analyzer (GLMA) report pointed out the strengths and weaknesses in Putnam's immediate market, identified as a 30-minute drive time. The demographics were mixed, with very favorable income and an older White population. But the area was experiencing a population drain, and it's projected to continue shrinking. Along with that, Putnam resides in an area with a population density of 623 people per square mile - that's less than half of what we define as healthy for a daily fee facility. The Rounds Potential Indices were generally favorable. New York golfers play more frequently than the national average, and with the above average income and 84% White population, we characterized Putnam's market as "good." However, the report also showed that Putnam was lagging the market in rounds played by facility. Next we dove in and analyzed the FORE data and have continued to do so monthly. The numbers, compared across three years (2012, 2011, and 2010) and neutralized for weather, were startlingly weak. It was obvious McCall, appliedgolf and Homestyle Caterers had their work cut out for them. The analysis confirmed the county's commitment to invest money to bring the facility back to local prominence. Purchased by the county in 2003, Putnam had been a private club. Being frayed at the edges would be too kind a description - the numbers revealed that the facility was being rejected by local golfers. 8 The Pellucid PersPecTive For a relatively modest investment of $500,000, the county stepped up and purchased new course maintenance equipment, renovated bunkers, did a modest remodel of the clubhouse interior, and paved the parking lot while adding lighting. The last two were done with an eye to attracting more events. appliedgolf, led by Dave Wasenda, provides the marketing and operations upgrade Putnam sorely needed. Their emphasis is "aiding underperforming facilities to maximize potential." That may sound like a boilerplate statement, but Wasenda said, "All improvements were strategic. We felt we had one shot to get customers back, and we, McCall, and the county took dead aim." They started by rebranding the facility as Putnam County Golf Course, feeling Putnam National sounded too pretentious. A new standalone, state of the art website was built, detached from the county's own site to highlight its new identity. Rates were reset. A new head pro was hired, and a new customer service dynamic was installed with the entire staff, maintenance workers included. Course conditions saw a dramatic improvement. And that "one shot" at getting customers back? Wasenda credits Pellucid's Defector email database, produced each month and included with the performance reports. "We know who and where the customers are, and by value and when they last played. It gives us a huge leg up on our competition, and is a catalyst to our increase in rounds and revenue," Wasenda said. What kind of increases? We thought you'd never ask. Against weather that was 8% worse than 2012, 2013 saw rounds increase 27%, and total revenue increase 61%. Their Revenue per Available Round (RevPAR)? Up 75%! So far through May 2014, the ride continues. Against weather that is 5% worse than 2013 at this same date, rounds are up another 14%, and revenue has more than doubled again led by food and beverage. Green fee revenue is up 55%, and RevPAR has more than doubled. Assuredly, these increases are coming at the expense of the competition, as Golf Datatech reported a 19% decrease in New York rounds through April. The strategic improvements are resonating, and customers are returning and being retained not because of drastic discounting, but because a value point has been achieved that's acceptable, maybe exceptionally acceptable, to local golfers. In the end, Mike McCall had this to say: "Having to submit monthly reports and provide semi-annual presentations to the County Legislature, I feel very confident in summarizing our facility's performance due to the non-biased empirical data provided by Pellucid. The legislature is very appreciative of this business-like approach." And that's how you win in today's market. I don't know about you, but I feel good being able to write this. n June 2014

Table of Contents for the Digital Edition of The Pellucid Perspective - June 2014

TOC
Is the golf industry "healthy"? Three versions of truth
Former ClubLinks co-gounder launching 12-hole golf
How is your golf course really doing?
Winning team produces a turnaround success story
Club to golfers: Promise to have fun
May '14 golf weather impact: Positive streak extends to 3 months
Chicago courses 'toddling' along in tough times
Declining Golf Galaxy sales contribute to poor Dick's Sporting Goods stock performance
Tracking golf's progress … via GPS?

The Pellucid Perspective - June 2014