Scotland Price Gouging

[Michael Whitaker]

These “private” clubs should buy visitors a round or two of free drinks whenever they visit. Without them their comps would be double or triple. 💷

[Michael Whitaker]

A lot of the money "required" to operate a club hoping to attract overseas cash these days is spent to attract overseas visitors. A load of clubs have spent tons of money on their course and house in the past few decades when it wasn't necessary. We see it every year now as a matter of course. In 1990 clubs operated just fine on far smaller budgets wioth far fewer visitors on much cheaper rates...even accounting for inflation. Now we have clubs guaranteed to take in tons of visitor cash still raising dues so as to not be so dependent on visitor cash  ....its comical. Yes, visitor cash is needed, as was the case for the past 40 years or more. Only recently, things have gone nuts. The clubs which could really use vistor cash generally aren't good enough to attract enough visitors. Look at Musselburgh Old. It struggled forever and is now doing alright, but could still use more visitor cash. People drive past it to spend £400 at Muirfield etc.

Ciao

Sean - It’s a slippery slope to become so dependent on visitor revenue. At Gullane they will probably clear in excess of £2M this year… and, they’ll still probably raise dues because of their concern about becoming “too dependent” on visitors. But, they have a closed waiting list of 100 prospective members, so they’re probably not too worried about a few dropping out. It’s a good problem to have.


I’ve also noticed that buggies… and buggy revenue… is eating its way into club/club professional business model. Once that revenue starts to become a significant part of your operating budgeting you’re hooked. No going back.  A lot of these clubs are learning from the  American-model courses (like Renaissance) that they have been leaving a lot of money on the table.

[Thomas Dai]

A lot of the money "required" to operate a club hoping to attract overseas cash these days is spent to attract overseas visitors. A load of clubs have spent tons of money on their course and house in the past few decades when it wasn't necessary. We see it every year now as a matter of course. In 1990 clubs operated just fine on far smaller budgets wioth far fewer visitors on much cheaper rates...even accounting for inflation. Now we have clubs guaranteed to take in tons of visitor cash still raising dues so as to not be so dependent on visitor cash  ....it’s comical. Yes, visitor cash is needed, as was the case for the past 40 years or more. Only recently, things have gone nuts.

Difficult to disagree with this. It’s become something of a viscous circle. A ‘circle of expectations’, a circle that has now unfortunately spread to many a U.K. golfer.
Where there used to be no frills or less frills there are now frills, often lots of them.
Indeed the lack of frills both on-course and within clubhouses was part of the attraction to some.
And as for the level of visitor revenue quoted in a post above, there are about 2,500 golf clubs in the U.K. and I doubt more than a tiny fraction achieve such levels and they’ll be the usual small number of big name venues.
Atb

[Tim Martin]

A lot of the money "required" to operate a club hoping to attract overseas cash these days is spent to attract overseas visitors. A load of clubs have spent tons of money on their course and house in the past few decades when it wasn't necessary. We see it every year now as a matter of course. In 1990 clubs operated just fine on far smaller budgets wioth far fewer visitors on much cheaper rates...even accounting for inflation. Now we have clubs guaranteed to take in tons of visitor cash still raising dues so as to not be so dependent on visitor cash  ....it’s comical. Yes, visitor cash is needed, as was the case for the past 40 years or more. Only recently, things have gone nuts.

Difficult to disagree with this. It’s become something of a viscous circle. A ‘circle of expectations’, a circle that has now unfortunately spread to many a U.K. golfer.
Where there used to be no frills or less frills there are now frills, often lots of them.
Indeed the lack of frills both on-course and within clubhouses was part of the attraction to some.
And as for the level of visitor revenue quoted in a post above, there are about 2,500 golf clubs in the U.K. and I doubt more than a tiny fraction achieve such levels and they’ll be the usual small number of big name venues.
Atb

It’s interesting to note that many that profess to want a “no frills or less frills” experience here in the U.S. are put off when they get just that in GB&I at many of the lesser known courses.

[Charlie Goerges]

It’s interesting to note that many that profess to want a “no frills or less frills” experience here in the U.S. are put off when they get just that in GB&I at many of the lesser known courses.

I’m guessing the definition of “no frills” differs dramatically.

[Kalen Braley]

I'm not seeing how this is problematic from the perspective of UK club members.

If they're investing the money back into the club & course and building reserve funds for deferred maintenance type items seems like they'd be in much better shape to survive a future downturn.  Nothing like implementing overdue upgrades and otherwise on someone else's dime. Should be smiles all around right?

[cary lichtenstein]

if you don't like their pricing, boycott them, simple as that

[Dave Doxey]

Sorry folks but private member clubs are private member clubs and what they do is up to them. Folks might not like it but private member clubs are under no obligation to let anyone other than their members play their course. Getting to play them is not some kind of right of passage, it’s essentially a privilege, even if it’s a privilege paying a greenfee might permit.
Now some private members clubs want the income that visitors bring, indeed some want lots of it while some want some and some don’t want much. It’s not an outsider decision however but the members choice who and how many visitors get to play and what the price should be. Indeed there’s not much worse than standing in the car park at your club, your club, the club you own, and not being able to get onto the first tee due to an excess of visitors or suffering a 5 hr round due to visitors playing ahead.
Resort, pay-n-play and local authority (ie muni/links trust type) courses are of course a different beast.
Atb

David - there are very few true PRIVATE clubs in the UK. Almost all the clubs popular with Yanks are semi-private (at best). Most would really suffer without the income they receive from visitors. I’m a member of two UK clubs, Royal Cinque Ports and Gullane. The local members at these clubs pay PER YEAR what most Americans pay PER MONTH for their membership. That’s why the Yanks are willing to pay the high visitor fees… they’re used to paying high rates for a round of golf.


Let’s face it, this is a supply & demand business. As long as the demand keeps growing the rates will continue to climb.


And, it’s true that the tour operators and club associations have been advising clubs to up their rates to attract more visitors. Doak’s comment about the tour operators getting a cut of the bookings helps one understand why they want to see trip prices go up. It’s time Arble gets serious about his Classic British Golf Tours and turns it into a real business! 😉

The answer is here.  It's a supply and demand business.  Simple economics.  The price will settle where supply and demand meet.  A club decide it's pricing and the customers decide where to play.

[Matt Schoolfield]

The answer is here.  It's a supply and demand business.  Simple economics.  The price will settle where supply and demand meet.  A club decide it's pricing and the customers decide where to play.

I don’t want to get too into the weeds here, but price discrimination isn’t actually part of basic supply an demand model in economics. It erodes the consumer surplus, which sort of defeats the primary benefit for society from the system. It’s off topic and it’s not exactly what’s happening here, but yeah, perfect price discrimination especially, is really not a great thing for anyone except those who control the desired goods.

[John Challenger]

Private clubs in the U.S., especially the ones on the top golf course lists, seem to be doing the same thing. They are mostly doing it in a quieter way by allowing for-profit "societies" to bring in their "members" on certain days for exorbitant rates. There are enough people willing to pay the high price. Many of these private clubs appreciate the extra revenue as long as it's not too "obtrusive."

[Mark Chaplin]

It is a fallacy that Americans only notice higher priced courses. I meet at least 2 groups a week sometimes more, most are on organised tours through an agent or their head pro, I’ve yet to meet anyone who knew what the individual green fees were.


The only tiered pricing I know is at high end American owned pay and plays in Scotland. I suspect the deep discounts for true locals within a postcode area were probably part of the planning process in order to gain local support/reduce objections.


Some of the high end championship courses have one or two off season tee times a day at at Scottish Golf Union rate.


You can be assured as an Englishman if I travel to Scotland and play unaccompanied (unlikely!) I’m paying the same as a Silicon Valley billionaire.

[Sean_A]

Brora now has a three tier visitor rate system. They introduced a UK rate which is substantially cheaper than the overseas rate.

Ciao

[Richard Fisher]

It's certainly true that in Wales, in general the cheapest option for high-class golf in the UK, there has been significant pressure from tour operators for places like Harlech, Conwy, Aberdovey etc to move to around £100 or so (which is obviously still miles cheaper than the championship venues of Cheshire and Lancashire 2-3 hours away). It's also true that there has been a completely legitimate uptick, fed in part by social media, in 'customer expectations' for what the latter are going to get for their £100, certainly in terms of course conditioning and clubhouse service. Clubs like RStD are massively dependent on green fees for their financial model (and always have been), but I know that in 2021/2022 only about 3% of Harlech green fee payers actually paid the full quoted rack rate, after discounts for web booking, county cards, party numbers etc had been applied. This is being addressed...
Fwiw I am a country member of four of Ran's original 147 clubs, for which I pay in toto about $3000 per annum, and that's where almost all my own 'away play' monies tend to go. It is I freely confess my one major extravagance in life. International membership is always worth looking at, although clearly at some Scottish venues even this is now being massively priced up.
Do I think what is now being charged at many of the Top 100 courses is discriminating against four middle-income six handicap guys who used to play a minitour with (say) one Open or Amateur venue and two satellite venues (36 holes on each) and have change from £400 for the lot? Yes. Will this change, going forward? Absolutely not.

[Sean_A]

It's certainly true that in Wales, in general the cheapest option for high-class golf in the UK, there has been significant pressure from tour operators for places like Harlech, Conwy, Aberdovey etc to move to around £100 or so (which is obviously still miles cheaper than the championship venues of Cheshire and Lancashire 2-3 hours away). It's also true that there has been a completely legitimate uptick, fed in part by social media, in 'customer expectations' for what the latter are going to get for their £100, certainly in terms of course conditioning and clubhouse service. Clubs like RStD are massively dependent on green fees for their financial model (and always have been), but I know that in 2021/2022 only about 3% of Harlech green fee payers actually paid the full quoted rack rate, after discounts for web booking, county cards, party numbers etc had been applied. This is being addressed...
Fwiw I am a country member of four of Ran's original 147 clubs, for which I pay in toto about $3000 per annum, and that's where almost all my own 'away play' monies tend to go. It is I freely confess my one major extravagance in life. International membership is always worth looking at, although clearly at some Scottish venues even this is now being massively priced up.
Do I think what is now being charged at many of the Top 100 courses is discriminating against four middle-income six handicap guys who used to play a minitour with (say) one Open or Amateur venue and two satellite venues (36 holes on each) and have change from £400 for the lot? Yes. Will this change, going forward? Absolutely not.

Richard

Do you get the impression that Welsh clubs rely heavily on UK visitors rather than overseas visitors?

Wales seems to be very popular with midlanders.

Ciao

[Tim Gallant]

Overseas membership is clearly the way to go on extended stays, especially with good recip. rates.


I did have a golf course person tell me, "I you green fee is under £100 Americans don't think your course is any good."

Ken,


I appreciate that it can help with cheaper golf, but I am very against this idea. Most decent courses over here have big waitlists, and it feels inappropriate that some from overseas are on the waitlist, simply because they get a cheaper greens fee. Meanwhile, the family that just moved into the village are told there's no way into the club, even though they would be the lifeblood of the place for years to come.


If there are separate waitlists and membership numbers for overseas and regular members, then fine. But often, it's all one number.

[Enno Gerdes]

Overseas membership is clearly the way to go on extended stays, especially with good recip. rates.


I did have a golf course person tell me, "I you green fee is under £100 Americans don't think your course is any good."

Ken,


I appreciate that it can help with cheaper golf, but I am very against this idea. Most decent courses over here have big waitlists, and it feels inappropriate that some from overseas are on the waitlist, simply because they get a cheaper greens fee. Meanwhile, the family that just moved into the village are told there's no way into the club, even though they would be the lifeblood of the place for years to come.


If there are separate waitlists and membership numbers for overseas and regular members, then fine. But often, it's all one number.

Tim,
I was under the impression that most if not all clubs have separate waiting lists for all the categories (junior, gents, ladies, country, overseas, etc.). That would also make sense, because a club would want to regulate expected usage of the course, and usage differs per category. I certainly know of one East Lothian club that has 125 overseas members, and a waiting list specific to that category. I see no problem with that, on the contrary: those overseas members will pay something like 50% of the dues, but will only play a few rounds per year on average. So this model is actually subsidising the dues for local members. Again, nothing wrong with that.

[Tim Gallant]

Overseas membership is clearly the way to go on extended stays, especially with good recip. rates.


I did have a golf course person tell me, "I you green fee is under £100 Americans don't think your course is any good."

Ken,


I appreciate that it can help with cheaper golf, but I am very against this idea. Most decent courses over here have big waitlists, and it feels inappropriate that some from overseas are on the waitlist, simply because they get a cheaper greens fee. Meanwhile, the family that just moved into the village are told there's no way into the club, even though they would be the lifeblood of the place for years to come.


If there are separate waitlists and membership numbers for overseas and regular members, then fine. But often, it's all one number.

Tim,
I was under the impression that most if not all clubs have separate waiting lists for all the categories (junior, gents, ladies, country, overseas, etc.). That would also make sense, because a club would want to regulate expected usage of the course, and usage differs per category. I certainly know of one East Lothian club that has 125 overseas members, and a waiting list specific to that category. I see no problem with that, on the contrary: those overseas members will pay something like 50% of the dues, but will only play a few rounds per year on average. So this model is actually subsidising the dues for local members. Again, nothing wrong with that.

Agreed - if it's a separate list, then I think that's ok. It's when the lists are combined and the sole reason for joining is for cheaper golf (per Ken's post). I believe Dornoch has a combined list.

[Richard Fisher]

Sean


Yes, the Welsh courses have always had (far) fewer American and international visitors than either Scotland or Ireland, and although numbers of the latter are beginning to increase, the bulk of Welsh golfing visitors still tend to be Brits. Since their foundation in the 1890s Harlech and Aberdovey have always had very strong links with Midlands golf and clubs like Blackwell, Little Aston and Edgbaston (check out the RStD Honours Boards for famous examples of this). Clubs on the north coast like Conwy tend to link across a bit more to the Wirral and Merseyside, with very fast road access down the A55.

[Thomas Dai]

As has been discussed herein before, private members clubs (as distinct from pay-n-play, resorts, muni's etc) have to be very careful with balancing local member generated income vrs visitor income and not letting the desires and expectations both members and visitors get out of hand.
As was seen a few years ago if there is too much reliance on visitor income to cover day-to-day operating costs plus repay any loans taken out to cover visitor desired or encouraging enhancements then when things go awry its begging bowl time.
Income from members is the cake. Income from local visitors is the icing. Income from distant visitors is the cherries.
atb

[Wayne_Kozun]

Income from members is the cake. Income from local visitors is the icing. Income from distant visitors is the cherries.

What is the revenue split from these three visitor classes.  Using your cake, icing, cherries analogy implies it is something like 70% members, 20% local visitors and 10% distant visitors.  But I am guessing that the split is much more even than that and that the cherries are becoming as large as the cake.

[Padraig Dooley]

It has been a very common theory in Ireland and elsewhere that overseas visitors will only go to golf courses where the fees are high and in order to attract more visitors you need to have higher fees. Typically there are a few courses in Ireland that are used as examples of an increase in visitors after the fees were put up.
However, this theory is flawed. The reason behind the increase in play was not the increase in fee but the increase in travel after the recovery of the crash of 2008, starting in 2012 there was a year on year increase of foreign travel into Ireland and more than likely Scotland too of higher than 10% a few years after 2012 the increase had jumped to 20%. This also meant an increase in golfers travelling and looking to play but there was no increase in the capacity of the golf courses they were looking to play. In the quieter travel times an easy travel schedule could be made to play the 6,7,8,9 etc courses the golfers had heard about and wanted to play. All of a sudden this couldn't happen so courses A,B or C was added in to make the schedule flow. These courses weren't as good as Lahinch, Ballybunion etc but still were good courses in the right location but lesser known, they were able to offer a similar enjoyable experience, typically links.
The increase in fees came from that most golfers travelling are coming on a package and they don't know what they were paying per round. This was noticed so the fees could be upped and no one paying would know which courses were charging more or less. All the golfers knew is they were paying 4,000, 6,000, 8,000 etc per trip. The tour operators then started telling courses you need to up your prices for the overseas visitors to come, some of the courses give a percentage to operators so then they would send the golfers to the places where they got a higher commission. The courses were hardly going to turn down more revenue and then started increasing their fees steadily.
If it was true that raising fees dramatically would lead to more outside play than a lesser known parkland course in the middle of the country could do so, but if they did they would lose all their business.

The golfers who did notice the rise in fees were relatively local golfers who might have played once or twice a year and these are the golfers who comment on the rise in the fees as they contact the club directly, whereas the overseas visitors have an operator doing the booking. Soon, a local rate started to appear to appease this golfers but if you are charging one golfer one price as they live close to the club and another golfer another price as they live overseas that is gouging. How can you charge two visitors playing, potentially at the same time, two different prices? Also, shouldn't the golfer paying the most get better treatment? I don't think it's a good idea to tell your best customers that you are openly gouging them.
I don't think these situations are the same as public courses charging locals in the municipality reduced rates as many times local tax dollars can go into the public courses.

Some of the courses are privately owned for profit organisations so they are going to try to maximise profits, others are members owned clubs and don't need to be making substantial profits and certainly shouldn't be charging membership fees that are dramatically subsidised by outside play. One club 25 years ago had annual dues that were about 8 times the visitor fee, the annual dues haven't really increased in the 25 years but now 2 visitor fees are more expensive than the annual dues. You also have a better chance of pulling hen's teeth than raising the annual dues at some of the clubs.
I do understand the requirement for all clubs to make a profit but charging fees at a club on the west coast of Ireland based on what Pebble Beach or similar charge where there is a dramatic difference into the inputs on the golf courses and staffing levels etc isn't always sustainable and during the crash of 2008 and restrictions on travel in 2020 and 2021 all the courses started charging a price that was more suitable to their local market. When the next unexpected event occurs, the prices will come back down again.
The other curious thing that happened during this period is now many of the links courses substantially rest the course in the off season to get it ready for the following summer, so now members take the ball off the fairway or use a mat whereas before there was a great joy in heading from soggy parkland courses to the dry links turf during the winter.

[Thomas Dai]

Income from members is the cake. Income from local visitors is the icing. Income from distant visitors is the cherries.

What is the revenue split from these three visitor classes.  Using your cake, icing, cherries analogy implies it is something like 70% members, 20% local visitors and 10% distant visitors.  But I am guessing that the split is much more even than that and that the cherries are becoming as large as the cake.

There are something like 2,500 golf clubs in the UK so it depends. The usual suspects and bigger names will be the clubs that see the highest proportion of cherry and icing distant and local visitors income but the usual suspects and bigger names only form a pretty small proportion of the total number of courses. For the remainder of clubs, the vast majority, local member cake activity is the most vital component. Local member cake income is also important for clubhouse and pro shop support through the quieter off-season when there will probably be few if any visitors wishing to play.
Atb

[Cal Carlisle]

As a regular visitor to Scotland and Ireland, I have paid my fair share of high green fees.  That said, I do not feel that it is Price gouging" at all.  Simply put, it's supply and demand.  No different than any other form of entertainment.  Have you looked at buying concert tickets lately? 


As long as there are enough people willing to pay $300, $400, or $500 for a round of golf at XYZ club, then that's what they will charge.  I don't have an interest in paying $950 for TPC Sawgrass of $525 for TPC Scottsdale as I've already played them.  But I am happy to pay $300-500 for another great golf courses I have yet experienced.  I am just appreciative that they will allow us on their private club.  What do you think the green fees would be if you could play Augusta National, Cypress Point, or Pine Valley?

I see things like the cost of an Epipen in the US as price gouging. This right here? This is FOMO. No one's dying if they don't get on a golf course, but they've got a list to check off. These clubs can name their price and will most likely get it - at least once.

[Garland Bayley]

This may be a minority view but given:

1)  Scotland as a country has the most golf courses per capita with plenty of other options.
2)  Golf is "entertainment" as opposed to a necessity like housing, healthcare, food, etc.

Gouging in this case doesn't really offend me.  (I will now take cover)

Make sure you advertise widely here when you plan to take your first trip to Scotland. And, be sure to let us know how much you will be paying for each round!

[Ally Mcintosh]

It has been a very common theory in Ireland and elsewhere that overseas visitors will only go to golf courses where the fees are high and in order to attract more visitors you need to have higher fees. Typically there are a few courses in Ireland that are used as examples of an increase in visitors after the fees were put up.
However, this theory is flawed. The reason behind the increase in play was not the increase in fee but the increase in travel after the recovery of the crash of 2008, starting in 2012 there was a year on year increase of foreign travel into Ireland and more than likely Scotland too of higher than 10% a few years after 2012 the increase had jumped to 20%. This also meant an increase in golfers travelling and looking to play but there was no increase in the capacity of the golf courses they were looking to play. In the quieter travel times an easy travel schedule could be made to play the 6,7,8,9 etc courses the golfers had heard about and wanted to play. All of a sudden this couldn't happen so courses A,B or C was added in to make the schedule flow. These courses weren't as good as Lahinch, Ballybunion etc but still were good courses in the right location but lesser known, they were able to offer a similar enjoyable experience, typically links.
The increase in fees came from that most golfers travelling are coming on a package and they don't know what they were paying per round. This was noticed so the fees could be upped and no one paying would know which courses were charging more or less. All the golfers knew is they were paying 4,000, 6,000, 8,000 etc per trip. The tour operators then started telling courses you need to up your prices for the overseas visitors to come, some of the courses give a percentage to operators so then they would send the golfers to the places where they got a higher commission. The courses were hardly going to turn down more revenue and then started increasing their fees steadily.
If it was true that raising fees dramatically would lead to more outside play than a lesser known parkland course in the middle of the country could do so, but if they did they would lose all their business.

The golfers who did notice the rise in fees were relatively local golfers who might have played once or twice a year and these are the golfers who comment on the rise in the fees as they contact the club directly, whereas the overseas visitors have an operator doing the booking. Soon, a local rate started to appear to appease this golfers but if you are charging one golfer one price as they live close to the club and another golfer another price as they live overseas that is gouging. How can you charge two visitors playing, potentially at the same time, two different prices? Also, shouldn't the golfer paying the most get better treatment? I don't think it's a good idea to tell your best customers that you are openly gouging them.
I don't think these situations are the same as public courses charging locals in the municipality reduced rates as many times local tax dollars can go into the public courses.

Some of the courses are privately owned for profit organisations so they are going to try to maximise profits, others are members owned clubs and don't need to be making substantial profits and certainly shouldn't be charging membership fees that are dramatically subsidised by outside play. One club 25 years ago had annual dues that were about 8 times the visitor fee, the annual dues haven't really increased in the 25 years but now 2 visitor fees are more expensive than the annual dues. You also have a better chance of pulling hen's teeth than raising the annual dues at some of the clubs.
I do understand the requirement for all clubs to make a profit but charging fees at a club on the west coast of Ireland based on what Pebble Beach or similar charge where there is a dramatic difference into the inputs on the golf courses and staffing levels etc isn't always sustainable and during the crash of 2008 and restrictions on travel in 2020 and 2021 all the courses started charging a price that was more suitable to their local market. When the next unexpected event occurs, the prices will come back down again.
The other curious thing that happened during this period is now many of the links courses substantially rest the course in the off season to get it ready for the following summer, so now members take the ball off the fairway or use a mat whereas before there was a great joy in heading from soggy parkland courses to the dry links turf during the winter.

Great post, Padraig. This is what I’ve seen.