For those who prefer numbers to anecdote, I will try it quantify it (Please pardon any errors or misconceptions, I am a liberal, so my calculations and conceptions are always suspect):
Pete L's analysis was on the right track, but I don't think it goes far enough.
Let's still assume that on a perfect day, everyone plays at 10 minutes a hole (3 hour round.) This day is not a perfect day, however. The wind and rough are up and money is on the line, and the course is packed, so everyone is playing at a respectable 12 1/2 minutes per hole (3 hour 45 min. round). That is the unencumbered pace, with no waiting. Any waiting time must be added on to get an accurate total. So if a group waits 10 minutes, their pace would be 3 hours 55 minutes.
On this windy day, golfers tee off every 5 minutes, but finish every 7 1/2 minutes. The Second Group would have played in 3 hrs 45 minutes, but they had to wait 2 1/2 minutes for the First Group at some point during the round (because of the "pace deficit" of 2.5 minutes). Doesn't seem to be much of a problem but look what happens as the day progresses, especially with regard to Shivas' late-afternoon "highest incremental margin" profit makers.
Tee time: 6:00 a.m. Round Finishes at 9:45:00 a.m. 3:45:00 per round, Already 184 golfers on course.
Tee time: 6:05 a.m. Round Finishes at 9:52:30 a.m. 3:47:30 per round.
Tee time: 6:10 a.m. Round Finishes at 10:00 a.m. 3:50:00 per round.
Not bad so far, under 4 hrs. per round. But let's skip ahead a little . . .
Tee time: 7:00 a.m. Round Finishes at 11:15 am. 4:15 per round, pace of play now over 14 minutes per hole, 212 golfers on the course, almost 3 foursomes per hole.
Tee time: 8:00 a.m. Round Finishes at 12:45 p.m. 4:45 per round, pace a little over 14 min. 50 sec. per hole.
Tee time 10:00 a.m. Round Finishes at 3:45 p.m. 5:45 hour round.
"Welcome to Rancho Park. Enjoy your round . . ."
Tee time 11:30 a.m. Round finishes at 6 p.m., IN THE DARK. 6 1/2 hour round.
Tee time 3:00 p.m. Last "full round" at 3 hr. projected time. Dark before foursome reaches 7 green. If they tried to finish, they would do so at 11:15 p.m. An 8 hour 15 minute round; Par 3's backed up 5-6 groups deep. "FOOOOOUUUUUURRRRRRRR."
As you can see, if you underestimate your pace, you have quite a problem by the afternoon. Not good for business.
Even with only a 1 minute pace deficit per hole, the pace would slow by 12 minutes per hour (5 minute projected pace). Over 5 hours, you are an hour off.
So, back to Rich's hypothetical. $ 100 dollars per round, everyone finishes in the light. First time 6 am; last time 11:30 a.m. 264 paying customers [(5.5hrs)(12grps/hr)(4 plyrs/grp).] $26,400 revenue, and plenty of pissed off golfers.
Now compare at 10 minute intervals but use the same unencumbered pace (Rich, I am not buying every group at 6 hrs-- with no one in front-- Americans are not that slow, are they?) No pace deficit because the potential round (6 hrs) is higher than the actual round (3 hrs 45 min.) So the last tee time is 2:20 pm. So there are 216 paying customers [(8hrs.20min)(6grps/hr)(4plyrs/grp)]. And a revenue of $21,600. There is a $4,800 difference in revenue (less than 20%), but everyone plays relatively fast and goes home happy.
All else being equal, which course do you think will be more financially successful over time?
Does my analysis work and do my numbers check out? (As if you would not tell me if I did not ask.)