[Adam Clayman]

Affect or Effect. I'm more confused now than ever.
But...

How much of the increased cost to the customer is related to having a management team run the golf course?
50%?
100%?
More?

[Steve Lapper]

Affect or Effect. I'm more confused now than ever.
But...

How much of the increased cost to the customer is related to having a management team run the golf course?
50%?
100%?
More?

Adam,

   If you are looking at the public or muni (and frequently some private clubs) business model, the answer to your question is far less than what you think. Most golf managment companies are quite competitive and likely offset much of their associated "extra" costs with increased efficiencies and savings (i.e accounting/bookeeping, technology and commodity purchasing, account payable leverage, right down to associated labor costs). The "pass-through" cost to the customer hardly exceeds 10-15% at it's farthest extreme.

[Jeff_Brauer]

Adam,

I am going to say it varies, but if we could measure it across the country, the net change would be zero or positive.

There are so many poorly run "mom and pop" or municipal golf courses that professional management helps them, not hurts them.   When a course is taken over by a Troon or Kemper, etc. they do get monthly management fees of $7,000-10,000 per month, which translates only to $1-2 per round.  But, they also bring some national account buying power, proven cost savings techniques, etc. that at least offset the inefficiencies that existed previously.

What really happens is that when a poorly run course is taken over by such companies, they are usually charged with making a profit where losses existed before, and they start eliminating revenue killers (like season passes that equate to a few bucks a round played) personal carts or beverages on the course, etc.  Those raised fees aren't because they cost more to manage, they are because they should have been charged in the first place.  If you want to blame them for that increased cost, go ahead, but it had to happen.

I hope I understood your question correctly!

[Adam Clayman]

Youz guys have covered it nicely. Save for that Yalie. Obtuse esoterics nudge nudge wink wink AAA I found it. Sorry, not perfect.

[Kyle Henderson]

Affect or Effect. I'm more confused now than ever.
But...

Affect is a verb.
Effect is a noun.

You can affect something, or what you do can have an effect on that thing. Yay for English!

[A.G._Crockett]

My club has just been bought by a company that owns or operates a number of courses/clubs in the general area.  I'll be very curious to see what happens to our dues at the end of the year.

They have realized some cost savings, for instance by bringing in workers and equipment from other courses for fall aeration and topdressing, as well as bunker maintenance and repair.  However, there sure are a lot more people around who are exec. types!

Additionally, I would think that the danger becomes fewer overall competitors in the market, which generally leads to higher prices, rather than lower.  (Not to sound too much like an Econ. teacher... )

[Jeff_Brauer]

AG,

I think most golf manager would tell you your thoughts on reduced competition are true, but will happen about the time the Dow reaches 36,000......

[Adam Clayman]

It varies from individual to individual customer too.

The annual pass golfer, who was use to getting his annual cost per round down, will be the most affected(Kyle?) correct?

[Steve Lapper]

It varies from individual to individual customer too.

The annual pass golfer, who was use to getting his annual cost per round down, will be the most affected(Kyle?) correct?

Not necessarily the case. The annual pass golfer (unless specifically mandated by local ordinance) is usually a revenue concession trade made by management done to produce a higher "reve par" figure. The bottom line is that mgmt co's DO NOT NECESSARILY, by their presence, bump up fees to the paying golfer.

[Gary Slatter]

The added "cost" of management companies varies, but there will always be an increase in greens fees, and not offset by the decrease in employees wages. Our investigations show Marriott Golf can have a positive effect on a golf operation, the rest I liken to the remoras attached to sharks, opportunists providing mediocre golf experiences at high prices. Many course owners and resort managers know beans about running a course and get sucked in to management deals, its easier than operating it themselves or making decisions or hiring real professional golf staff. Can't say more in a public forum......

[Steve_ Shaffer]

As a former member of a non-equity corporate owned private club, I can state that it was better managed than most private clubs in the area. The staff, even new hires, was trained to recognize members by name in the dining room instead of account number as is the case at many clubs here. Management was responsive to the members concerns.Financially, I don't know the numbers but member owned clubs should consider using a management company IMO.

[Don_Mahaffey]

There is absolutely no replacement for a qualified professional staff with a strong leadership component. If a golf enterprise can’t provide that on their own then there are a few, a very few, management companies that may fit the bill. But, there are a lot of sharks in the water.

One quick management company story. A very well known, highly thought of company managed a course near me. They had a national account ( big savings…right) to buy fertilizer from a major national brand. I, and many other supts in my area, bought our fert from a large local ag fert company that would blend anything we wanted for a price much cheaper than anything you could buy that had a pretty label with the word turf on the bag. The course managed by the company that provided all the “savings” paid more than twice for the same bag, but did get a nice rebate at HQ at the end of each year.

Pick your management company carefully

[Chris Cupit]

My club has just been bought by a company that owns or operates a number of courses/clubs in the general area.  I'll be very curious to see what happens to our dues at the end of the year.

They have realized some cost savings, for instance by bringing in workers and equipment from other courses for fall aeration and topdressing, as well as bunker maintenance and repair.  However, there sure are a lot more people around who are exec. types!

Additionally, I would think that the danger becomes fewer overall competitors in the market, which generally leads to higher prices, rather than lower.  (Not to sound too much like an Econ. teacher... )

A.G.,

You have a good company to manage your course!  

I've worked for a management company and now work at my family's course.  Many management companies can bring efficiencies, buying power, expertise and a heightened professionalism to many operations.  However, the best clubs that have that unique feel and that real "homey" sense of belonging are clubs that are "stand alone".  

[Adam Clayman]

I suspect bandon'ds green fees would be half what they are, if it weren't for the management company.

How many dept. heads do you really need?

[John_Conley]

Adam, if memory serves you've railed against management companies before.  

While they add a layer, they DON'T change the Supply-Demand interaction for a course.

On the maintenance side, OF COURSE the management company will cut costs to limbo under the budget so they don't lose money on the contract.  But think of why the management company came in to begin with.  They offered a reduction in that line item on the budget.

On the other side, groups like Kemper, Troon, Western, and American Golf don't have that much of an impact.  Jeff mentions the reasons.

With or without a management company World Woods was going to be in bad shape all those years when the droughts hit and there wasn't enough play going through the 48 holes for 9 months of the year.

[Robert Mercer Deruntz]

Overall, management companies are a waste.  Jeff Brauer is correct about mom & pop mismanagement.  However, it can easily be fixed by simply hiring a good clubhouse manager, golf pro, and superintendent.  Most management companies have professional staffs that are several levels below mediocre.  I have yet to find a pro at one of these courses that can truely shoot less than 85 and has a real clue about teaching the game of golf.  As for merchandizing and service, it is not brain surgery!  The hidden savings is that the pay scale is streamlined terribly low, hence an abundance of psuedo pros who diminsh the reputation of the profession.

[Adam Clayman]

With or without a management company World Woods was going to be in bad shape all those years when the droughts hit and there wasn't enough play going through the 48 holes for 9 months of the year.

John, You almost convinced me that I'm just an ogre until you added the above.

[Jim Nugent]

Mostly right.  Effect is also a verb, that means to bring about something: he effected change.    

[John_Conley]

John, You almost convinced me that I'm just an ogre until you added the above.

Adam, I reckon you and I would make the same decisions regarding our maintenance budget if the topline was suffering.  The argument, "if you invested in maintenance people would want to come here," is a tough one to hear if the income statement is showing red.

[Mark_Rowlinson]

Kyle and Jim, Mostly right.  

Affect is also a noun: the emotion associated with an idea or set of ideas.

As you say, Effect can also be a verb: to cause to occur, bring about, accomplish.

[bstark]

  Very interesting topic. Always asked myself that question about LI National since we started it. American Golf was involved from the get go. There were times they clearly drove up the grow in process by force feeding equipement and labor down our throat. We could have done a more efficient job with local equipment and material. Their supposed institutional knowledge never impressed me that much.  
  Operationally they never really understood the Eastern Long Island "shoulder season" and never lowered the overhead accordingly. Further, the constant rotation of middle management is not good for consistent marketing efforts. They seemed to want to continually reinvent themselves every time the new GM walked in.
  All in all local guys culled from competitors would have been the way to go.
 

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