A question about greens fees these days

[Ryan Van Culin]

As Tom alluded to it seems like fairly straight forward math:

Say you have 150 time slots in a given day that you can fill with a $100 green fee.  But if you increase the green fee to $200 only half are bought, 75. You'd still end up with the same daily revenue: 150 X $100 = 75 X $200 = $15,000

However the latter scenario results in half as much on course traffic (and theoretically half as much "damage") as well as you could space the tee times out and avoid waiting/congestion.

If you were a course operator which scenario would you prefer?

This is also assuming you sell half the slots at twice the price. There is a point where you will sell less than the price increase. If you sell 50 tee times, at $200, you've lost $5k.

[Chris Hughes]

Keep reading "the UK private clubs are so awesome because they allow outside play" but the more I hear seems in real-terms they are loosely slotted into the "semi-private" category, at best. 


Clubs that are solving for profitability, are not private, but rather public -- by definition.

[Brian Finn]

Keep reading "the UK private clubs are so awesome because they allow outside play" but the more I hear seems in real-terms they are loosely slotted into the "semi-private" category, at best. 

Clubs that are solving for profitability, are not private, but rather public -- by definition.

Categorize it how you like, Chris, but the model (for the majority of UK clubs) is superior in virtually every way.  Additionally, they are not solving for profitability, but rather covering operating costs, maintaining cash reserves, and keeping member dues low.  I'd think you, of all people, would recognize and respect those goals. 

[Rob Marshall]

Keep reading "the UK private clubs are so awesome because they allow outside play" but the more I hear seems in real-terms they are loosely slotted into the "semi-private" category, at best. 

Clubs that are solving for profitability, are not private, but rather public -- by definition.

Categorize it how you like, Chris, but the model (for the majority of UK clubs) is superior in virtually every way.  Additionally, they are not solving for profitability, but rather covering operating costs, maintaining cash reserves, and keeping member dues low.  I'd think you, of all people, would recognize and respect those goals.

Ben
Why is it superior in virtually every way?

[Brian Finn]

Keep reading "the UK private clubs are so awesome because they allow outside play" but the more I hear seems in real-terms they are loosely slotted into the "semi-private" category, at best. 
 
 Clubs that are solving for profitability, are not private, but rather public -- by definition.
 

Categorize it how you like, Chris, but the model (for the majority of UK clubs) is superior in virtually every way.  Additionally, they are not solving for profitability, but rather covering operating costs, maintaining cash reserves, and keeping member dues low.  I'd think you, of all people, would recognize and respect those goals.
 

 Ben
 Why is it superior in virtually every way?
 

At the majority of the ~150 UK clubs I have visited, something along these lines occurs:
 - Visitors are welcome at select times - a big plus on its own, in my view
 - Visitor fees supplement club revenue - at the clubs typically mentioned here, the contribution is substantial
 - Annual dues (subscription) at the vast majority of UK clubs are far lower than in the US - this allows more people to join a club, and for some (still a minority, I imagine), multiple memberships - I view these as positives
 - Members have access to prime tee times, with weekends (Saturdays especially) usually reserved for member play
 - Golf is the focus - the golf course and playing golf are prioritized
 
I recognize the above is vastly oversimplified, and also based on rather limited experience, as an American who visits a couple of times per year.  I am also not privy to any club financials (other than joining fees and subscription costs, which most clubs post on their public websites), so my views may be taken with a grain of salt.  Additionally, clubs in the UK have a far different operating environment, as it pertains to items such as taxes, land cost, and many more of which I am surely unaware.  So, many holes may be poked in my simplistic view of UK clubs.
 
Additionally, I recognize that visitor demand continues to grow at the best-known clubs, such that members are sometimes being squeezed out of playing when they would like.  It seems this trend has spread into some clubs that might be referred to here as "2nd & 3rd tier."  Some clubs have now blocked a greater portion of their schedule strictly for member play (e.g. Elie closed to visitors for 45? days during the prime summer season) due to this dynamic.  So, again, I recognize that even my rose-colored view is not without issue.  In many ways, the market seems overheated, but I will save my short to medium term forecast for the golf-course “industry” for another time. 
 
In summary, I far prefer the model employed by most of the UK clubs that I have visited.  I acknowledge no model is perfect, and even attempt to point out some of the potential flaws, but this, like the vast majority of posts here, is just my opinion.  I think it is a fairly well-informed opinion, but understand many people have different preferences than my own.  I’ve attempted to focus on more concrete issues (e.g. $/£ and tee time availability), avoiding concepts that lean political for many people.

[SB]

Matt, to answer your original question, yes, they are raking in a lot of money.  Expenses have definitely gone up too, particularly the labor costs, plus I think many courses are spending more to make things nicer.  But there's no question that in general, golf courses are making more money than they used to.  Which is good, because it was really rough there for a while.


There's a lot that goes into how much of that rate gets to the bottom line, for example most of the ones you mentioned are in seasonal markets so, while they are $400 in season, you can play for less than $100 off season.  So Tom's 66% might be right for a normal market, but it might be 40% in a seasonal market. There's packages and members and juniors that all get discounts.  There isn't a single golf course that is just (X Rounds) * (Y Rack rate) = total green fees.



It has really never been profitable to just go build a golf course in a typical city and make a decent return.  You either need houses to boost the returns or somebody willing to take a low return (a municipality).  The one exception has been high end resorts or high end private clubs.  And plenty of those are financial disasters.  But there are certainly some big winners, too.  Most people that own golf courses today bought them off the original developer for less than what it cost to build.

[Thomas Dai]

At the majority of the ~150 UK clubs I have visited, something along these lines occurs:
 - Visitors are welcome at select times - a big plus on its own, in my view
 - Visitor fees supplement club revenue - at the clubs typically mentioned here, the contribution is substantial
 - Annual dues (subscription) at the vast majority of UK clubs are far lower than in the US - this allows more people to join a club, and for some (still a minority, I imagine), multiple memberships - I view these as positives
 - Members have access to prime tee times, with weekends (Saturdays especially) usually reserved for member play
 - Golf is the focus - the golf course and playing golf are prioritized
 
I recognize the above is vastly oversimplified, and also based on rather limited experience, as an American who visits a couple of times per year.  I am also not privy to any club financials (other than joining fees and subscription costs, which most clubs post on their public websites), so my views may be taken with a grain of salt.  Additionally, clubs in the UK have a far different operating environment, as it pertains to items such as taxes, land cost, and many more of which I am surely unaware.  So, many holes may be poked in my simplistic view of UK clubs.
 
Additionally, I recognize that visitor demand continues to grow at the best-known clubs, such that members are sometimes being squeezed out of playing when they would like.  It seems this trend has spread into some clubs that might be referred to here as "2nd & 3rd tier."  Some clubs have now blocked a greater portion of their schedule strictly for member play (e.g. Elie closed to visitors for 45? days during the prime summer season) due to this dynamic.  So, again, I recognize that even my rose-colored view is not without issue.  In many ways, the market seems overheated, but I will save my short to medium term forecast for the golf-course “industry” for another time. 
 
In summary, I far prefer the model employed by most of the UK clubs that I have visited.  I acknowledge no model is perfect, and even attempt to point out some of the potential flaws, but this, like the vast majority of posts here, is just my opinion.  I think it is a fairly well-informed opinion, but understand many people have different preferences than my own.  I’ve attempted to focus on more concrete issues (e.g. $/£ and tee time availability), avoiding concepts that lean political for many people.

The number and variety of UK courses that Brian as a visitor from another country has played over a number of years is impressive and puts him in a good position to make the above assessment. From a UK perspective I suggest it’s a very fair and nicely balanced summary.
Atb

[Rob Marshall]

Keep reading "the UK private clubs are so awesome because they allow outside play" but the more I hear seems in real-terms they are loosely slotted into the "semi-private" category, at best. 
 
 Clubs that are solving for profitability, are not private, but rather public -- by definition.
 

Categorize it how you like, Chris, but the model (for the majority of UK clubs) is superior in virtually every way.  Additionally, they are not solving for profitability, but rather covering operating costs, maintaining cash reserves, and keeping member dues low.  I'd think you, of all people, would recognize and respect those goals.
 

 Ben
 Why is it superior in virtually every way?
 

At the majority of the ~150 UK clubs I have visited, something along these lines occurs:
 - Visitors are welcome at select times - a big plus on its own, in my view
 - Visitor fees supplement club revenue - at the clubs typically mentioned here, the contribution is substantial
 - Annual dues (subscription) at the vast majority of UK clubs are far lower than in the US - this allows more people to join a club, and for some (still a minority, I imagine), multiple memberships - I view these as positives
 - Members have access to prime tee times, with weekends (Saturdays especially) usually reserved for member play
 - Golf is the focus - the golf course and playing golf are prioritized
 
I recognize the above is vastly oversimplified, and also based on rather limited experience, as an American who visits a couple of times per year.  I am also not privy to any club financials (other than joining fees and subscription costs, which most clubs post on their public websites), so my views may be taken with a grain of salt.  Additionally, clubs in the UK have a far different operating environment, as it pertains to items such as taxes, land cost, and many more of which I am surely unaware.  So, many holes may be poked in my simplistic view of UK clubs.
 
Additionally, I recognize that visitor demand continues to grow at the best-known clubs, such that members are sometimes being squeezed out of playing when they would like.  It seems this trend has spread into some clubs that might be referred to here as "2nd & 3rd tier."  Some clubs have now blocked a greater portion of their schedule strictly for member play (e.g. Elie closed to visitors for 45? days during the prime summer season) due to this dynamic.  So, again, I recognize that even my rose-colored view is not without issue.  In many ways, the market seems overheated, but I will save my short to medium term forecast for the golf-course “industry” for another time. 
 
In summary, I far prefer the model employed by most of the UK clubs that I have visited.  I acknowledge no model is perfect, and even attempt to point out some of the potential flaws, but this, like the vast majority of posts here, is just my opinion.  I think it is a fairly well-informed opinion, but understand many people have different preferences than my own.  I’ve attempted to focus on more concrete issues (e.g. $/£ and tee time availability), avoiding concepts that lean political for many people.

Thanks for the reply Ben. I don't necessarily agree with all but you make some good points.

[Brian Finn]

Thanks for the reply Ben. I don't necessarily agree with all but you make some good points.

You're welcome, Roger.