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Jud_T

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Re: Rounds vs. Revenues
« Reply #50 on: May 03, 2012, 08:06:26 AM »
The problem with pricing is perception.  While on paper you'd happily take whatever you could get to fill the tee sheet at off hours as it's mostly gravy (Pebble Beach Groupon anyone?), it affects your core prime-time players' idea of value.  While I may be able to easily afford $100 for a Saturday morning round and happily pay it, as soon as I find out that Joe Sixpack can play the course Tuesday after 3 for $25 I begin to wonder if I'm being had.  So, in B-School lingo there's an efficient frontier of pricing that optimizes the function of revenue and patron's perceptions of value vs. other times and local competition.
Golf is a game. We play it. Somewhere along the way we took the fun out of it and charged a premium to be punished.- - Ron Sirak

Adrian_Stiff

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #51 on: May 03, 2012, 08:16:20 AM »
Nicely described Jud- We refer to it as dropping your guard.... as soon as you set out a bargain basement deal you get attacked by a barrage of happy shoppers and its hard to sell at rack rate thereafter because those people feel they are getting ripped.
A combination of whats good for golf and good for turf.
The Players Club, Cumberwell Park, The Kendleshire, Oake Manor, Dainton Park, Forest Hills, Erlestoke, St Cleres.
www.theplayersgolfclub.com

Mark Chaplin

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #52 on: May 03, 2012, 08:17:59 AM »
Scott a members club should make a net profit of around 5%, on a million turnover that's £50k. Unless clubs make a profit every time they need to make significant capital expenditure they have to go cap in hand to the bank - not easy in this climate - or to the members. Anything less than that and a couple of weeks of really bad weather can put a severe strain on cash flow. Very few costs go away even when the course is closed.

So far over a couple of threads I've heard RCP is too expensive for members, too expensive for visitors and too expensive for guests yet not one suggestion of who or what should pay for the running of the club. We could cut two or three greenskeepers and then the course will suffer and that will be a longer term loser. Cutting a few clubhouse hours and the hut saves in percentage terms very little but impacts on everyone.

When setting up the B&B an industry expert told us if less than 20% of your guests think you are too expensive, then you are too cheap.
Cave Nil Vino

Sean_A

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #53 on: May 03, 2012, 10:07:44 AM »
Chappers

Don't misunderstand, RCP can charge what they like - I honestly don't care one way or the other.  It would be nice to be able to ring the club and show up the next week for a reasonable fee, but its not the end of the world.  The club obviously believes they are offering good value.  My opinion is different, but I admit its very difficult to offer value once the £100 mark (for the sake of argument) is surpassed.  Personally, even for British clubs, I wonder if "expected standards" haven't gotten a bit out of control. 

I am more concerned with the trend of green fees far outstripping inflation these past 20 years.  Every year clubs that charge RCP prices will have to find more and more replacements for the golfers that won't afford the fees no matter how much they enjoy the course and club - and that pool of potential replacements is getting smaller - at least until the Chinese start showing up in numbers.  Now some clubs can gobble up the loss of revenue when and if that day comes without problem, but that is a small minority we are talking about - perhaps RCP is one of those clubs.  The answer has to be to reduce costs, but what I am seeing is budget increases and debt which is viewed as an investment to attract even more visitors.  Its a bad cycle.

Ciao
New plays planned for 2024: Nothing

jeffwarne

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #54 on: May 03, 2012, 10:15:24 AM »
Chappers
 The answer has to be to reduce costs, but what I am seeing is budget increases and debt which is viewed as an investment to attract even more visitors.  Its a bad cycle.

Ciao

Not singling out RCP,but that is a cycle that brings into question why a club exists in the first place.
If money is being invested to attract visitors, and rates are rising to support this investment, why bother?

unfortunately, the answer is often that the membership demands better conditions and amenities, and that is driving the grab for revenue.

As in everything balance and moderation are key.
I'm sure many of the Ballybunion members wish Tom Watson and others hadn't sung its' praises so highly years ago
"Let's slow the damned greens down a bit, not take the character out of them." Tom Doak
"Take their focus off the grass and put it squarely on interesting golf." Don Mahaffey

Tom_Doak

  • Karma: +2/-1
Re: Rounds vs. Revenues
« Reply #55 on: May 03, 2012, 10:31:43 AM »
Scott - No it would not really change all clubs should operate in a buisnesslike manner. Its hard to make much money at all out of golf, a real well run facility can only make 7 or 8% so between that and breaking even (a members club) the do's and don'ts are very similar. I think making sure the membership do enjoy their golf club is a very important certainly lowering fees that allow non members to play cheaper is going to get them ziggy. All golf clubs should focus on trying to make a profit even if it is small because you never know when you might need that little bit of stored revenue.

Adrian:

This is certainly true.

Years ago a prospective client of mine asked a former client of ours for advice on a potential new project, and as part of their sales pitch they told him they just wanted a great course, they didn't want to make money from it.  Mr. May, the former client, told them as follows:

"NEVER tell people you don't want to make money on a project.  You are looking for people to invest in your dream, and if they think you don't care about making money, you will probably lose their money for them.  Just tell them you are not trying to make AS MUCH MONEY AS POSSIBLE ... even that is so rare these days that it will set you apart and get your point across."

Tom_Doak

  • Karma: +2/-1
Re: Rounds vs. Revenues
« Reply #56 on: May 03, 2012, 10:36:14 AM »
Tom,
I think the point is that the "going rate" for the median price for a clubs gree fee (lets keep it at unaccompanied visitors) is the number that needs to be analysed or highlighted or reviewed.

if that number is currently $60 - with rounds varying from $45 midweek to $75 on weekends - I think if this was downscaled to $50 as the median price point for a good semi private with decent 7 day access, then from there, the Club looks for its most in demand 4 hours (say at Saturday morning 8-12) and least 24 hours sunrise mid week and/or sunset midweek or lunchtime( 4-9 holes) and then work backwards from there.

I am sure the guys that have sufficient disposable income will pay maybe $90 for one of those premuim Sat morning slots, and the golfer that has much less income available for golf, or is just miserly, will happily take an inconvenient tee time at $25.

Doesnt everyone then get what they what, golfers also then have the option as Neil mentioned to upgrade or downgrade as time or money allows them.

there are going to be a lot more happier customers than if the rate was set at $65 7 days per week.
Surely?

This model could be equally applied to Bandon Dunes (as it does now with peak, off peak shoulder, etc) or the local muni.

Let kids play when they have free time and the grown ups are working, let seniors play at a very cheap rate in the times that is convenient for them and the course is at it's quietest.

Does this give the best opportunity to the most golfers at the best price?


Brett:

I understand the reasoning behind your suggestion, but a couple of years back I listened to a speech on the topic from a guy at KLM.  He explained how the airlines set their pricing models and how a similar thing could be done for golf, but he also said that the airlines' profits from the venture had been quickly co-opted by the booking agencies, so that any increased revenue was going to them and not to the airline.

And, really, do you feel that you always get a fair deal from the airlines from their "optimized" business model?  I usually get just the opposite feeling, that I'm being ripped off arbitrarily.  If people start to feel that way about golf green fees, we are dead and buried.

Jud_T

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #57 on: May 03, 2012, 10:42:39 AM »
Anyone taking any advice on how to run a business from the airlines needs to seek out a mental health professional.. ;)  It does however bring up an interesting analogy.  Airlines are essentially seen as a utility.  Buses in the air if you will that are needed as infrastructure of the global economy.  Are golf courses parks which should be provided for the exercise and recreation of the public, or members, or are they businesses seeking to maximize profits at any expense?
Golf is a game. We play it. Somewhere along the way we took the fun out of it and charged a premium to be punished.- - Ron Sirak

Sean_A

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #58 on: May 03, 2012, 10:57:14 AM »
Chappers
 The answer has to be to reduce costs, but what I am seeing is budget increases and debt which is viewed as an investment to attract even more visitors.  Its a bad cycle.

Ciao

Not singling out RCP,but that is a cycle that brings into question why a club exists in the first place.
If money is being invested to attract visitors, and rates are rising to support this investment, why bother?

unfortunately, the answer is often that the membership demands better conditions and amenities, and that is driving the grab for revenue.

As in everything balance and moderation are key.
I'm sure many of the Ballybunion members wish Tom Watson and others hadn't sung its' praises so highly years ago

Jeff

Where do members get these raised expectations from?   I'll tell, when they play other courses, usually bigger name, more expensive courses which are trying to attract them and overseas visitors.  My only point is that there is not an endless pot of golfers with deep pockets and little sense and I suspect that pot will be shrinking in the next generation.  Unless it is clubs which know they can't rely on visitors' fees to sustain themselves, the model so far has been to raise dues (likely doubled in 15 years) and visitors' fees (more than doubled).  I am not hearing much other than lip service about actually cutting real costs - which I think should be an important part of the puzzle or there is a real risk of losing visitor fee customers.  

Ciao  
« Last Edit: May 03, 2012, 11:07:58 AM by Sean Arble »
New plays planned for 2024: Nothing

Greg Tallman

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #59 on: May 03, 2012, 11:15:39 AM »
The problem with pricing is perception.  While on paper you'd happily take whatever you could get to fill the tee sheet at off hours as it's mostly gravy (Pebble Beach Groupon anyone?), it affects your core prime-time players' idea of value.  While I may be able to easily afford $100 for a Saturday morning round and happily pay it, as soon as I find out that Joe Sixpack can play the course Tuesday after 3 for $25 I begin to wonder if I'm being had.  So, in B-School lingo there's an efficient frontier of pricing that optimizes the function of revenue and patron's perceptions of value vs. other times and local competition.

No doubt. I need look no further than my tee sheet to see that. We introduced the mid-day and afternoon rates while maintaining our rates for prime time in the morning. Everyone is getting essentially the same experience for a far different rate. This was simply our method of competing with those in the area that have gone the cut throat route without regard to profitability (because they can). It has served the purpose pretty well though it's a tough deal.

This is why I suggested different days of the week offering a different experience, albeit the same course, for a wide range of pricing. Heck I may try it here one day a week. Cups not moved, nothing mowed, 8 minute tee times, no free tacos... half price.
JUD, would you see value in that or simply poor service? Anyone?
 


Brent Hutto

Re: Rounds vs. Revenues
« Reply #60 on: May 03, 2012, 11:23:50 AM »
Well I ain't playin' nowhere when there's NO FREE TACOS! I mean that's just crazy talk.  :'(

Greg Tallman

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #61 on: May 03, 2012, 11:26:22 AM »
Well I ain't playin' nowhere when there's NO FREE TACOS! I mean that's just crazy talk.  :'(

If you only knew... I have tried to nix the tacos a couple of times. It's not going to happen.

Andy Stamm

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #62 on: May 03, 2012, 11:28:48 AM »
The problem with pricing is perception.  While on paper you'd happily take whatever you could get to fill the tee sheet at off hours as it's mostly gravy (Pebble Beach Groupon anyone?), it affects your core prime-time players' idea of value.  While I may be able to easily afford $100 for a Saturday morning round and happily pay it, as soon as I find out that Joe Sixpack can play the course Tuesday after 3 for $25 I begin to wonder if I'm being had.  So, in B-School lingo there's an efficient frontier of pricing that optimizes the function of revenue and patron's perceptions of value vs. other times and local competition.

No doubt. I need look no further than my tee sheet to see that. We introduced the mid-day and afternoon rates while maintaining our rates for prime time in the morning. Everyone is getting essentially the same experience for a far different rate. This was simply our method of competing with those in the area that have gone the cut throat route without regard to profitability (because they can). It has served the purpose pretty well though it's a tough deal.

This is why I suggested different days of the week offering a different experience, albeit the same course, for a wide range of pricing. Heck I may try it here one day a week. Cups not moved, nothing mowed, 8 minute tee times, no free tacos... half price.
JUD, would you see value in that or simply poor service? Anyone?

Value, no question at all for me.

What was the result of your green fee structure change? Was a lot of morning play repositioned to later in the day? Was there additional total play (revenue?) because of successful price discrimination? Effect on total revenue?

PS - Do you really give free tacos?

Jud_T

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #63 on: May 03, 2012, 11:33:20 AM »
Greg,

I guess the problem at your club is that it's a highly rated club that is seen as a premium resort course.  Unless I was a regular local I'd probably be looking for premium conditioning on the Ocean Course anytime I was coming out.  And having had the tacos, I'd definitely miss them.  8)  It might be an interesting thing to try out on the Desert Course however.  I'd probably be quite receptive to getting a deal on the Desert, particularly given the average cost of a round in Cabo.  You might even package the two, i.e. the discount "off day" on the Desert with a round on the Ocean and the sum is greater than the parts to the discerning golf fanatic...Then, of course, you run into the inevitable comparison:  Some yahoo puffing away on his Cohiba in the bar complaining in a loud voice about the conditioning on the Desert...
Golf is a game. We play it. Somewhere along the way we took the fun out of it and charged a premium to be punished.- - Ron Sirak

Matthew Petersen

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #64 on: May 03, 2012, 11:43:24 AM »
Tom,
I think the point is that the "going rate" for the median price for a clubs gree fee (lets keep it at unaccompanied visitors) is the number that needs to be analysed or highlighted or reviewed.

if that number is currently $60 - with rounds varying from $45 midweek to $75 on weekends - I think if this was downscaled to $50 as the median price point for a good semi private with decent 7 day access, then from there, the Club looks for its most in demand 4 hours (say at Saturday morning 8-12) and least 24 hours sunrise mid week and/or sunset midweek or lunchtime( 4-9 holes) and then work backwards from there.

I am sure the guys that have sufficient disposable income will pay maybe $90 for one of those premuim Sat morning slots, and the golfer that has much less income available for golf, or is just miserly, will happily take an inconvenient tee time at $25.

Doesnt everyone then get what they what, golfers also then have the option as Neil mentioned to upgrade or downgrade as time or money allows them.

there are going to be a lot more happier customers than if the rate was set at $65 7 days per week.
Surely?

This model could be equally applied to Bandon Dunes (as it does now with peak, off peak shoulder, etc) or the local muni.

Let kids play when they have free time and the grown ups are working, let seniors play at a very cheap rate in the times that is convenient for them and the course is at it's quietest.

Does this give the best opportunity to the most golfers at the best price?


Brett:

I understand the reasoning behind your suggestion, but a couple of years back I listened to a speech on the topic from a guy at KLM.  He explained how the airlines set their pricing models and how a similar thing could be done for golf, but he also said that the airlines' profits from the venture had been quickly co-opted by the booking agencies, so that any increased revenue was going to them and not to the airline.

And, really, do you feel that you always get a fair deal from the airlines from their "optimized" business model?  I usually get just the opposite feeling, that I'm being ripped off arbitrarily.  If people start to feel that way about golf green fees, we are dead and buried.

I agree with Brett that golf seems headed toward a dynamic pricing-type model. We already have (and accept) many elements of this--fees are higher on holidays and weekends, lower in the off-season, and lower later in the day ("twilight"). This is probably more true in Arizona and other desert climates than in other parts of the country because the "off-season" is actually the summer and it is still perfectly possible to play provided you don't mind the heat.

Golfnow and similar sites also are pushing this even further, and I think it's not long before you'll find that tee time prices can vary even as they are being booked--if a morning is seeing high demand, prices rise for the tee times still available, etc.

Consider how this might work in Arizona. Fees here are tied pretty clearly to the relative heat of the season and the time of day. Rates are generally still rather high in early April--but earlier this month we had an unseasonably early 100 degree day. I played that day and the course was not busy. Many people weren't interested in playing "spring" prices for "summer" temps. Meanwhile, you can often find an odd few days in June when the temps drop and it's wonderful to get out on the course on such days--you are paying the rates as if it were a 100-degree day, but it's only 85.

Sports teams are moving to this model more and more, as well. It started with higher prices for marquee opponents, moved into pricing day-vs.-night and weekday-vs-weekend, and is expanding from there. Many teams no longer have any sort of rate chart because there are so many different factors for any one game.

I think this can work for golf, too. So long as it's demand-based then I don't think golfers will have the issue Tom legitimately fears. Overall i think you're more likely to drive people away and make them feel as thought they're being tricked if rates remain artificially high even when there doesn't seem to be demand.

Greg Tallman

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #65 on: May 03, 2012, 11:51:34 AM »
Greg,

I guess the problem at your club is that it's a highly rated club that is seen as a premium resort course.  Unless I was a regular local I'd probably be looking for premium conditioning on the Ocean Course anytime I was coming out.  And having had the tacos, I'd definitely miss them.  8)  It might be an interesting thing to try out on the Desert Course however.  I'd probably be quite receptive to getting a deal on the Desert, particularly given the average cost of a round in Cabo.  You might even package the two, i.e. the discount "off day" on the Desert with a round on the Ocean and the sum is greater than the parts to the discerning golf fanatic...Then, of course, you run into the inevitable comparison:  Some yahoo puffing away on his Cohiba in the bar complaining in a loud voice about the conditioning on the Desert...

Jud,

Desert is available for as little as $99 and I'm not inclined to offer any better deal than that beyond the same day replay rates we have.

The reason I use The Ocean as the example is that there are likely many, many people each week that would love to play it but simply cannot bring themselves to pay the rate and/or miss out on the handful of twilight times where one can finish the round. If I were successful I could get the price conscious golfer to pay the $100 on a well conditioned Desert Course one afternoon and turn around and give the same player a taste of The Ocean Course at half price, in effect allowing them to play both for less than the prime rate on The Ocean Course while the maintenance staff scheduling is made easier.

As noted above I think the idea works better over multiple days in a local market where you define and cater to differnet segments of your market while offering a different product but these days I'm not averse to thinking way out of the box.

Patrick_Mucci

Re: Rounds vs. Revenues
« Reply #66 on: May 03, 2012, 11:54:32 AM »
Tom Doak,

I have a slightly different perspective on the transition based upon sitting on the green committees which fixed the guest rates and the boards which discussed and approved them.

As with any committee you get diverse opinions.
Those members who never brought guests wanted higher green fees.
Those members who brought guests wanted lower green fees.
Some wanted to increase revenues and thought that guest fees were a natural vehicle.
Others wanted to encourage more guest play, thinking that they'd attract new members from those guests.

Year in and year out these debates continued with little variation.
We also compared guest fees with both nearby and peer clubs.

Ditto caddy fees.

I think the spike in guest fees occured because the iconic clubs found that they were being inundated with guest play.
Members were complaining that guests were crowding the course and that they, the members, who were paying dues, were somewhat disenfranchised.  In addition, some of those iconic clubs found that the culture of the club was changing and moving away from members playing with members, to members bringing more and more guests (3 to 7 guests.)

As a result, those clubs, in one fell swoop, priced their guest fees through the roof in an effort to discourage guest play.
They felt that the increased green fees would act as a deterent to too much guest play and that if members did bring guests, it would result in guest play being a real profit center.  With guest fees of $ 200 to $ 250 along with cart, food & beverage revenues and caddies getting out, it was a home run.

Like many things done at the iconic clubs, increased guest fees soon found their way to the local clubs.

That's my story and I'm sticking to it  ;D


Jud_T

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #67 on: May 03, 2012, 11:55:53 AM »
Greg,

If you can fill open slots on the Ocean on off peak days and bring in new players it's a win/win.  But it's a delicate balance with the full rack guys and the perception of the course as a premium product.  Ferrari doesn't discount....
« Last Edit: May 03, 2012, 12:13:34 PM by Jud Tigerman »
Golf is a game. We play it. Somewhere along the way we took the fun out of it and charged a premium to be punished.- - Ron Sirak

Adrian_Stiff

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #68 on: May 03, 2012, 11:58:19 AM »
The problem with pricing is perception.  While on paper you'd happily take whatever you could get to fill the tee sheet at off hours as it's mostly gravy (Pebble Beach Groupon anyone?), it affects your core prime-time players' idea of value.  While I may be able to easily afford $100 for a Saturday morning round and happily pay it, as soon as I find out that Joe Sixpack can play the course Tuesday after 3 for $25 I begin to wonder if I'm being had.  So, in B-School lingo there's an efficient frontier of pricing that optimizes the function of revenue and patron's perceptions of value vs. other times and local competition.

No doubt. I need look no further than my tee sheet to see that. We introduced the mid-day and afternoon rates while maintaining our rates for prime time in the morning. Everyone is getting essentially the same experience for a far different rate. This was simply our method of competing with those in the area that have gone the cut throat route without regard to profitability (because they can). It has served the purpose pretty well though it's a tough deal.

This is why I suggested different days of the week offering a different experience, albeit the same course, for a wide range of pricing. Heck I may try it here one day a week. Cups not moved, nothing mowed, 8 minute tee times, no free tacos... half price.
JUD, would you see value in that or simply poor service? Anyone?
 


I would say "Dont do it", long term you will make a mess for yourself. Your different day clients wont understand the tee time intervals and wont notice cups not moved etc etc. Offering Half price golf is like knocking a knife into yourself, you may or may not recover, almost certainly you will drive some full price traffic into your half price slots, you might do more rounds, will you do twice as much though? You are cheapening your product and probably at a desperate stage either in or about to enter DS.  Hold your head up and just offer good value.... winter times, after coring and nearing sunsets are the only times I think you can defend lower pricing.
A combination of whats good for golf and good for turf.
The Players Club, Cumberwell Park, The Kendleshire, Oake Manor, Dainton Park, Forest Hills, Erlestoke, St Cleres.
www.theplayersgolfclub.com

Greg Tallman

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #69 on: May 03, 2012, 12:09:16 PM »
The problem with pricing is perception.  While on paper you'd happily take whatever you could get to fill the tee sheet at off hours as it's mostly gravy (Pebble Beach Groupon anyone?), it affects your core prime-time players' idea of value.  While I may be able to easily afford $100 for a Saturday morning round and happily pay it, as soon as I find out that Joe Sixpack can play the course Tuesday after 3 for $25 I begin to wonder if I'm being had.  So, in B-School lingo there's an efficient frontier of pricing that optimizes the function of revenue and patron's perceptions of value vs. other times and local competition.

No doubt. I need look no further than my tee sheet to see that. We introduced the mid-day and afternoon rates while maintaining our rates for prime time in the morning. Everyone is getting essentially the same experience for a far different rate. This was simply our method of competing with those in the area that have gone the cut throat route without regard to profitability (because they can). It has served the purpose pretty well though it's a tough deal.

This is why I suggested different days of the week offering a different experience, albeit the same course, for a wide range of pricing. Heck I may try it here one day a week. Cups not moved, nothing mowed, 8 minute tee times, no free tacos... half price.
JUD, would you see value in that or simply poor service? Anyone?

Value, no question at all for me.

What was the result of your green fee structure change? Was a lot of morning play repositioned to later in the day? Was there additional total play (revenue?) because of successful price discrimination? Effect on total revenue?

PS - Do you really give free tacos?

Andy,

To be honest it has been nearly impossible to judge the overall effect of the tiered structure given the changes to the lcoal golf market. As I have noted in other topics we compete for business with courses that are 1) selling golf in local cigar shops 2) Using all inclusive models at times(and at times not) 3) Public, then private, then grabbing people off the street for timeshare presentation and any other bizarre circumstance you care to imagine... simply put it has been a rather volatile marletplace and not conducive to drawing simple conclusions.

total rounds have stabalized somewhat over the last couple of years with some harmony in the distribution among the three rates and rather than look at it in terms of displacement it was seen more as capturing or recapturing rounds lost simply to price as the other courses entered into what amounted to an all out price war. What was once $290 can now be found for less than $200 while Ocean is still above $300 in the morning.

The morning rate is still the most utilized though that is due to limited inventory at the lowest, twilight rate.

Yes fish, shrimp and beef tacos are inlcuded with your round on The Ocean Course, always have been.

Greg Tallman

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #70 on: May 03, 2012, 12:14:35 PM »
Greg,

If you can fill open slots on the Ocean on off peak days and bring in new players it's a win/win.  But it's a delicate balance with the full rack guys and the perception of the course as a premium product.  Ferrari doesn't discount unfortunately....

Believe me I am the most anti-discount guy you will find. It is very slippery slope indeed. That said one day a week with a radically different product could be worth a look given the other benefits to the operation.
1. The Desert Course gets more attention that day thus perhaps elevating it in the minds of some
2. Staffing burden is eased every so silghtly (365 day golf operations are no picnic)
3. Ocean Course benefits... greens not being cut one day a week can only help, cups not moved helps... etc.

Man, I hope I do not talk myself into this! 

Greg Tallman

  • Karma: +0/-0
Re: Rounds vs. Revenues
« Reply #71 on: May 03, 2012, 12:21:08 PM »
The problem with pricing is perception.  While on paper you'd happily take whatever you could get to fill the tee sheet at off hours as it's mostly gravy (Pebble Beach Groupon anyone?), it affects your core prime-time players' idea of value.  While I may be able to easily afford $100 for a Saturday morning round and happily pay it, as soon as I find out that Joe Sixpack can play the course Tuesday after 3 for $25 I begin to wonder if I'm being had.  So, in B-School lingo there's an efficient frontier of pricing that optimizes the function of revenue and patron's perceptions of value vs. other times and local competition.

No doubt. I need look no further than my tee sheet to see that. We introduced the mid-day and afternoon rates while maintaining our rates for prime time in the morning. Everyone is getting essentially the same experience for a far different rate. This was simply our method of competing with those in the area that have gone the cut throat route without regard to profitability (because they can). It has served the purpose pretty well though it's a tough deal.

This is why I suggested different days of the week offering a different experience, albeit the same course, for a wide range of pricing. Heck I may try it here one day a week. Cups not moved, nothing mowed, 8 minute tee times, no free tacos... half price.
JUD, would you see value in that or simply poor service? Anyone?
 


I would say "Dont do it", long term you will make a mess for yourself. Your different day clients wont understand the tee time intervals and wont notice cups not moved etc etc. Offering Half price golf is like knocking a knife into yourself, you may or may not recover, almost certainly you will drive some full price traffic into your half price slots, you might do more rounds, will you do twice as much though? You are cheapening your product and probably at a desperate stage either in or about to enter DS.  Hold your head up and just offer good value.... winter times, after coring and nearing sunsets are the only times I think you can defend lower pricing.

Adrian,

I honestly do not believe I woudl lose a single full rate round such a weird "promotion". Jud is my target market for rack rate, He appreciates great golf while also enjoying some of the bells and whistles AND he expects a certain product in terms of condition. He's going to play on a regular day and pay the full boat to get the experience he wants.

I MAY lose a feww twilight guests to this GCA DAY but I would have no concern as those times will fill up anyway... win, win. I could only deem it a success if it were the busiest day of the week, every week and obviously rounds increased overall.

As noted I hate even thinking in such terms but those are the times in which we live.

Andy Stamm

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Re: Rounds vs. Revenues
« Reply #72 on: May 03, 2012, 12:22:49 PM »
Greg,

Thanks for the info. It's always very difficult to make those sorts of comparisons meaningful as you can never actually "hold everything else constant," particularly in your case. It's interesting that the morning tee times are still the most utilized as I would think that a vacation golfer wouldn't be as time sensitive as a player at his home course, but price sensitivity and inventory would have a big influence here, so that may explain it.

Jud_T

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Re: Rounds vs. Revenues
« Reply #73 on: May 03, 2012, 12:23:26 PM »
Greg,

I think it's too much of a risk to present the Ocean as anything other than a luxury top 100 course.  Rather I'd try to get creative in promoting the Desert.  How about a fun tournament?  Cute girls offering shots of tequila for closest to the pin.  Winning group get a round on the Ocean etc...
Golf is a game. We play it. Somewhere along the way we took the fun out of it and charged a premium to be punished.- - Ron Sirak

Greg Tallman

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Re: Rounds vs. Revenues
« Reply #74 on: May 03, 2012, 12:37:37 PM »
Greg,

I think it's too much of a risk to present the Ocean as anything other than a luxury top 100 course.  Rather I'd try to get creative in promoting the Desert.  How about a fun tournament?  Cute girls offering shots of tequila for closest to the pin.  Winning group get a round on the Ocean etc...

Oh, I'm with you... just conducting a quick market study if you will.

The Desert has, and always will, battle the "other course" perception which is kind of unfair given where it really stacks up in the local market.

As for promoting Desert that is where all of our efforts were focused for some time increasing rounds by roughly 250% from our arrival to it's peak a few years ago.

I am all about cute girlsbut...

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