News:

Welcome to the Golf Club Atlas Discussion Group!

Each user is approved by the Golf Club Atlas editorial staff. For any new inquiries, please contact us.


Carl Johnson

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #25 on: November 21, 2013, 01:19:59 PM »
Question, regarding private club practice.  Why not set dues to run the golf club without regard to expected revenue of golf cart (buggie) rentals?  Then, allow carrying, push trolleys, motor trolleys, and for those who want them, rent out the club's golf carts (buggies) at cost?  Seems everyone ought to be happy with this sort of arrangement.

BCowan

Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #26 on: November 21, 2013, 01:25:28 PM »
Carl you have too much common sense.  They didn't include cart revenue 60 some years ago, prior to the buggy.  

John Kavanaugh

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #27 on: November 21, 2013, 01:40:10 PM »
I am a member of a couple of clubs where you can play as you choose.  One revenue many of you miss associated with buggies is the money lost if I don't play at all.  If it weren't for carts, for one I wouldn't be a member, and would not spend at least $50 on food and beverage after every round.  Good luck finding some dedicated walker to replace me just because you don't allow carts.

Also please note that we baby boomers drive the economy and we are getting very old very quickly.  We can remain golfers, eaters and drinkers for quite longer these days on our artificial joints.  Walkers, not so much.

I did go out yesterday to walk a few holes using a trolley.  Oddly they were put up for the winter so I went to a seven club bag.  I am sure this is an oversight easily corrected.

Thomas Dai

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #28 on: November 21, 2013, 01:45:43 PM »
Also please note that we baby boomers drive the economy and we are getting very old very quickly.  We can remain golfers, eaters and drinkers for quite longer these days on our artificial joints.  Walkers, not so much.
Very true and nicely put.
All the best

Bill McKinley

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #29 on: November 21, 2013, 01:47:45 PM »
Question, regarding private club practice.  Why not set dues to run the golf club without regard to expected revenue of golf cart (buggie) rentals?  Then, allow carrying, push trolleys, motor trolleys, and for those who want them, rent out the club's golf carts (buggies) at cost?  Seems everyone ought to be happy with this sort of arrangement.

Carl,

That is a possibility for sure, but I would argue that setting the dues high enough to cover that line item may price out a number of members at most clubs.  90% of private clubs these days are doing everything they can to keep that dues number as low as possible to help maintain their existing membership and attract new members as well.
2016 Highlights:  Streamsong Blue (3/17); Streamsong Red (3/17); Charles River Club (5/16); The Country Club - Brookline (5/17); Myopia Hunt Club (5/17); Fishers Island Club (5/18); Aronomink GC (10/16); Pine Valley GC (10/17); Somerset Hills CC (10/18)

SL_Solow

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #30 on: November 21, 2013, 01:55:29 PM »
Barney;  I made that point in my first post.  Rounds will be lost from those who prefer to play that way.  So eliminating cart usage will require a course to replace those rounds along with the cart revenue.  As far as the common sense of eliminating cart revenue from the budget and then going to a laissez faire system, that will only work if the membership is willing to accept the resultant dues increase.  If all you are suggesting is that carts remain optional and a realistic number would  then be added to the budget, that is in line with what most clubs do today.  The only issue is whether the clubs allow walking carts or carrying.  That is a decision for each club and its members to make.  if by rule the club decides to require caddies when available then that is the choice the members have made.  those who disagree should either join somewhere else or work to change the rule.  Interestingly, at most clubs, none of the caddy fees come to the club so even a fee for a walking cart would benefit the bottom line.  Obviously, then, it is more than economics that drives some decisions.  While some of it may be driven by a sense of "snobbery", I suggest at many clubs it is viewed as a pleasant way to play while exposing youth to the game, allowing them an opportunity to be employed in the summer and to have a chance to further their education.  I don't have any problem with that attitude at all.
« Last Edit: November 21, 2013, 04:50:19 PM by SL_Solow »

BCowan

Re: Trolleys (Maint. savings) vs Buggies (revenue) New
« Reply #31 on: November 21, 2013, 02:58:34 PM »
...
« Last Edit: November 26, 2013, 09:20:22 AM by BCowan »

Jason Thurman

  • Karma: +1/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #32 on: November 22, 2013, 04:36:16 AM »
Cart Revenue should be rainy day fund, not operating capitol!  

Can you explain why? It's fun to say things like that, but it makes absolutely no sense from a practical standpoint.

I suspect there are many walkers that would be very upset if their clubs had the same philosophy. Memberships would get a lot more expensive if cart revenue wasn't included as a budget consideration. Greens fees would go way up at public access courses if they ignored the huge amount of revenue they get from carts. It's as reliable a revenue stream as any other, at least at clubs in the US.
"There will always be haters. That’s just the way it is. Hating dudes marry hating women and have hating ass kids." - Evan Turner

Some of y'all have never been called out in bold green font and it really shows.

BCowan

Re: Trolleys (Maint. savings) vs Buggies (revenue) New
« Reply #33 on: November 22, 2013, 07:08:30 AM »
...
« Last Edit: November 26, 2013, 09:20:41 AM by BCowan »

Brent Hutto

Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #34 on: November 22, 2013, 07:23:35 AM »
This whole concept of "cart revenue" is a Humpty Dumpty word...it means whatever the person saying it wants it to mean.

Let's say I want to play golf in a golf cart. So I show up and pay a $50 "green fee" plus a $20 "cart fee". How much of that is so-called cart revenue?

Next scenario. I want to play golf in a cart. So I show up and pay a $40 "green fee" plus a $30 "cart fee". How much of that would be deemed "cart revenue"?

Final scenario, I want to play golf in a cart so I show up and pay a $70 "green fee" which is "cart included". Same question, how much is the so-called cart revenue?

The revenue in all three cases is $70. That's the only number that has any relevance to the bottom line. Apportioning $20 or $30 or $0 of it to some accounting fiction labeled "cart revenue" is an rationalization for god knows what sort of bad decisions about managing the entire operation. It can rationalize bad budgeting, bad price setting, bad policies and it can most certainly drive away business.
« Last Edit: November 22, 2013, 08:33:47 AM by Brent Hutto »

Chris_Hufnagel

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #35 on: November 22, 2013, 07:28:46 AM »
Private clubs that have 50% of their membership walk do just fine.

Ben, welcome to GCA.  I have enjoyed following you on the various threads you are participating in - as a new poster, you may have the record for 0-60...

I have to ask, regarding your statement above - can you provide any data that supports this - I guess other than the two clubs you and your parents belong to?  If, in fact, your statement is accurate - do you think there could be other circumstances that lead to their financial success?

Chris.

Mark Pritchett

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #36 on: November 22, 2013, 08:30:00 AM »
If there really is a strong demand for trolleys, the market will respond accordingly. 

Stewart Abramson

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #37 on: November 22, 2013, 08:40:34 AM »
... But interestingly, a former club where I played, and where almost all the members took carts, the worst fairways were those that were cart path only. The holes that allowed carts in the fairways had wonderfully firm and compacted turf.

In most cases the holes that are CPO are the ones with the worst drainage or other maintenance problems. Fairways that are firm are rarely made CPO unless the entire course is CPO. It's not the absence of carts that made the bad holes bad, or the presence of carts that gave the "wonderfully firm" holes their firmness. It's the other way around. Carts are banned from the bad fairways because the super knows carts will make them worse.

Phil Lipper

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #38 on: November 22, 2013, 09:06:43 AM »
Ben your answer to questions on almost every thread makes it sound like most clubs except the fortunate few are losing money. Virtually every answer says something along the lines of they do this even though the club is the red. I'm  not sure where you live but I can tell you thats certainly not the norm in the NYC metro area. Are there clubs that have issues? Of course there are but its hardly the norm.  

BHoover

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #39 on: November 22, 2013, 09:07:30 AM »
... But interestingly, a former club where I played, and where almost all the members took carts, the worst fairways were those that were cart path only. The holes that allowed carts in the fairways had wonderfully firm and compacted turf.

In most cases the holes that are CPO are the ones with the worst drainage or other maintenance problems. Fairways that are firm are rarely made CPO unless the entire course is CPO. It's not the absence of carts that made the bad holes bad, or the presence of carts that gave the "wonderfully firm" holes their firmness. It's the other way around. Carts are banned from the bad fairways because the super knows carts will make them worse.

Ordinarily I would agree with your statement.  But in the case of the course I was referring to, that was not the case.  The fairways were CPO on those two holes because there was no convenient way of returning carts to the paths near the greens (in the opinion of club management).  The issue was not fairway drainage or maintenance.

Jason Thurman

  • Karma: +1/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #40 on: November 22, 2013, 11:27:35 AM »
Brent, my understanding of revenue is that it's streams are defined by the company, and not by the industry. So in your scenario, where Course A charges $50 green fee and $20 cart, they get $20 of cart revenue from you. Course B receives $30. Course C receives $0.

Most courses, then, are priced such that cart revenue is important to their bottom line (Courses A and B in your example). Another reasonably large percentage of courses (like your Course C) do not factor cart revenue into their bottom line at all, despite the fact that they offer carts and likely would lose customers if they didn't. They just consider the cart an automatic part of every round. And a VERY tiny percentage of courses don't use carts at all except for ADA accommodation. The fact that those courses comprise such a tiny portion of the market and generally charge either very large greens fees (Bandon, Whistling Straits) or substantial membership dues (Ballyneal) tells me that carts are an important part of the equation for the majority of courses looking to operate in the black (in the US).
"There will always be haters. That’s just the way it is. Hating dudes marry hating women and have hating ass kids." - Evan Turner

Some of y'all have never been called out in bold green font and it really shows.

Jason Thurman

  • Karma: +1/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #41 on: November 22, 2013, 12:06:12 PM »
Jason

    Public courses yes, but public also bans walking.

What public courses ban walking? A quick glance at the public courses I've played finds that over 90% allow walking.

Quote
There are a small portion of us, that refuse to play certain public that ban walking.

That's commendable I guess. I doubt very seriously that you comprise a large enough segment of the market to really damage their bottom line though.

Quote
Private clubs that have 50% of their membership walk do just fine.

Is that a universal truth? Do you have a source for it? Or a number of clubs that you're basing your observation on? Like the "cart fees should go to a rainy day fund!" line earlier, it sounds like you're just saying this because it's fun to say and you wish it was true. Bring some facts to support this nonsense.

Quote
The public/private courses will be very successful if they know how to maint. their course in a cost effective way.  Private clubs have a spending problem, not an income from golf cart problem.

Cost effective maintenance is important, but it's doesn't rectify lack of revenue. I'm personally familiar with several private courses in my area that keep a relatively low maintenance budget and still don't have the revenue to stay in the black. It's just a reality of the market right now. Ballyneal is a higher profile example of a course that has a low-input maintenance meld but still experienced some financial difficulty a few years ago. Clubs need to minimize expenses, but it's a simple fact that they also need revenue. A private club that does 12,000 rounds a year and gets cart fees on 8,000 of them just took in revenue equaling over half of your suggested maintenance budget of $280k. Do you really think $160,000 isn't a valuable addition to the bottom line in the current economic climate?

Quote
My parents club has lowest dues of all the private and as many walkers as any other club.

I'm sure that's not true. Do you mean the lowest dues in Toledo? And how do you know they have as many walkers as any other club? Isn't Inverness walking only for people under 60 without a medical issue?

Quote
When cart revenue is used to meet budgets, people use that philosophy to justify trail fees and overspending and waste in other areas.

Sometimes they do. Other times they just add it to their bottom line. For your own sake, you should really stop posting nonsensical generalizations with no supporting facts.

Quote
Clubhouses losing money, so we have to blame walkers for being cheap and not paying for carts.

It sounds like you've been around some memberships that really hate walkers. I haven't seen the same trend. There are plenty of lower-budget clubs that have modest clubhouses, reasonable dues, tighter-than-average maintenance budgets, and still rely on cart revenue as part of their bottom line despite fostering a strong walking culture.

Quote
The average maint. of a private club in the north is $700k and i have seen impeccable courses maint. at $280k.

What is your source? $700k actually seems low to me, but I'm in the lower Midwest so our 12-month maintenance schedule and more extreme climate during growing season might explain why. Where was your "impeccable course" at $280k? And define "impeccable." Here in Cincinnati, I don't know that you can even keep bentgrass fairways alive for $280k a year. My club's maintenance budget is right around $700k, and I've seen the numbers for other clubs in town. Ours is among the lowest, and our superintendent does an excellent job. I serve on our greens committee though, and our allotted budget leaves some very difficult decisions about what to allot money to. In my mind, when you have to make very difficult decisions, it means you've set your budget correctly. We spend to take care of needs, but we don't have many costs left to cut and certainly couldn't keep the turf alive on your implied suggestion of $280k. If my club has dead grass everywhere next summer, we'll be able to go to our annual meeting and proudly announce that we don't have a spending problem. However, there won't be any members left to make that announcement to, which means we'll have a big revenue problem.

Quote
Have you gone to city view tavern-best kept secret in Cinci?

I have not.

I have to agree a bit with Chris. It's clear from your posts so far that you're accustomed to being the smartest and most enlightened golfer in the room when you discuss courses and maintenance and cart revenue and the long term success of the game. You've really mastered the basic talking points of GCA. I didn't mean to go all Mucci on you in this post. I just want to make a point. A thesis is not evidence, and you can't simply string together thesis after thesis into a paragraph and post it as though it's a rational argument that sheds light on an issue. When guys like you and me are at our clubs, we may be the smartest and most enlightened golfers in the building. But when we're posting here, we're total idiots compared to all the guys who make a living as experts in this industry. You'll learn a lot from this site if you learn to read a bit more and type a bit less. There has been a large amount of discussion about the economic situation facing golf courses over the last few years. The issues facing golf courses in the current environment are MUCH deeper than a simple question of whether or not they allow trolleys, and shoestring maintenance budgets are a bit of a double-edged sword.

It's really important for clubs to strike the right balance between generating revenue and attracting members. There's a place in the discussion of finding that balance to talk about trolleys, which may help attract members despite not generating the same revenue as carts. There's also a place in that discussion to talk about maintenance budgets, which need to be set high enough to attract and retain members but low enough to not bankrupt the club. But it's really not a simple discussion and I doubt very seriously there's a meaningful correlation between financial solvency of clubs allowing trolleys versus that of those that don't.
"There will always be haters. That’s just the way it is. Hating dudes marry hating women and have hating ass kids." - Evan Turner

Some of y'all have never been called out in bold green font and it really shows.

Brent Hutto

Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #42 on: November 22, 2013, 12:08:40 PM »
Any enterprise more concerned with shuffling around nominally different pools of revenue than with their targeted customers deserves what they get.

The salient questions are these:

1) How many rounds of riding golf will you sell at any given price point

2) How many rounds of walking golf will you sell at any given price point

A simplistic analysis can treat these two questions as separate, perhaps arriving at a near-optimum pair of answers. A correct analysis will answer each question conditioned on the other and arrive at a global optimum solution.

The sort of bookkeeping, political gobbledegook you're describing is unlikely to lead to an optimum pricing plan. If you set $20 as the cart fee because you want some little pool of revenue to get $20 per round, without regard for the actual price sensitivity of your target market then you are not a serious business person.

Set pricing and policies for riding and walking so as to optimize revenue. Then allocated the resulting (larger) revenue in any way you like once it is taken in. How is that not the most obvious common sense in the world?

Brent Hutto

Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #43 on: November 22, 2013, 12:12:36 PM »
Jason

    Public courses yes, but public also bans walking.

What public courses ban walking? A quick glance at the public courses I've played finds that over 90% allow walking.

Jason,

At least a large minority and possibly even a majority of courses public and private in the Columbia, SC metropolitan area either completely or partially require the use of golf carts. Presumably they assume that they lose less money by not letting myself play there than they would by letting me walk the course, thereby offending the customers who are riding in carts. Either that's their belief or they are simply complete morons (a distinct possibility IMO).

ChipRoyce

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #44 on: November 22, 2013, 12:38:15 PM »
But public and private courses/clubs depend on cart revenue these days. 

I agree on the public; but it drives me crazy every time I hear about a member-owned private club depending on "X" for revenues.

To me its red flag that shows that the club's economics are broken and very vulnerable to an economic downturn.

I know others will argue, but at a private club, each amenity that the members offer themselves should be self-sustaining.

I’m of the opinion that if an amenity is not even close to sustaining itself, it’s a defacto tax by members who use the amenity on those that don't.

For example, if you have to subsidize the salary for a shoe guy in the locker room that only 10% of members use, that's a problem. Either eliminate the amenity or raise the fee to clean shoes to cover the expense to provide the service. That will sort out quickly how much demand there really is for the service.

Golf carts are a great example - if members want to walk, let them and reduce the size of your cart fleet. 

I know of a member owned club that started out riding only. In today's day and age of fitness and really efficient push carts, the members wanted to walk more and/or be able push their own cart. This club was too dependent on cart revenues to fund golf / club operations and at first fought the walking effort. The stigma of push carts being perceived as blue collar didn't help either. Finally, the club decided to buy push carts and rent to members for $10 a round or so (vs. $25 pp cart fee).

A great example of bureaucracy at work. First the club got too dependent on cart fees to subsidize operations. Then when demand dropped, instead of fixing this the right way - modify the dues structure to cover the potential shortfall in Cart revenues; they sought out an inefficient system that requires the club to own and maintain these carts (labor, capital expense and hassle) instead of eliminating a portion of their expenses.

Jason Thurman

  • Karma: +1/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #45 on: November 22, 2013, 12:47:00 PM »
Brent, I think the analysis you're talking about is ultimately what smart courses try to do. The end goal is to get as much total revenue as possible by maximizing the number of rounds while upcharging where possible. Some courses upcharge for carts. Other courses factor them into the cost of every round. But the bottom line is that they're trying to raise the average price per round while also increasing the number of rounds played to reach a maximum amount of revenue.

More and more, I see courses starting to try to maximize that revenue by varying their pricing throughout the day. Prime tee times in the morning and after work are more expensive than those slower hours of the early afternoon. Rustic Canyon is a high profile example of this, but it's starting to catch on everywhere. That may be more the way of the future than overthinking cart pricing.

As for Charleston, I haven't played golf there but it's very much at odds with what I see locally. Is walking forbidden at all these courses or do they just not offer a rate that doesn't include a cart? I've played a lot of courses that charged the same rate for walkers and riders, but I'm not sure that I've ever played a course that wouldn't allow you to walk. I know there are a few of them though. It seems like their usual reasoning is rooted in pace of play. While a lot of GCAers would be offended at the insinuation that walking is slower than riding, the fact is that guys in carts blame the guys they see walking when a course gets backed up. It may be a PR issue as much as anything.

Chip, there's a difference between "depending" on something for revenue and requiring it. My club absolutely depends on cart revenue, just like we depend on most of our revenue generators. If we cut carts, we'd be in big trouble. But we don't require carts, and we have a healthy walking culture that contributes to the #2 Evans Scholar program in terms of dollar contributions in the state of Ohio. Depending on carts doesn't necessarily mean depending on carts for EVERY round. It's simply that the cart revenue we collect is an important part of our bottom line.
"There will always be haters. That’s just the way it is. Hating dudes marry hating women and have hating ass kids." - Evan Turner

Some of y'all have never been called out in bold green font and it really shows.

Brent Hutto

Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #46 on: November 22, 2013, 01:13:51 PM »
Yes I mean no walking allowed. More courses each year. Got to be at least half by now, including totally "walkable" ones that have only started requiring carts in recent years.

Grant Saunders

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #47 on: November 22, 2013, 01:17:57 PM »

What is your source? $700k actually seems low to me, but I'm in the lower Midwest so our 12-month maintenance schedule and more extreme climate during growing season might explain why. Where was your "impeccable course" at $280k? And define "impeccable." Here in Cincinnati, I don't know that you can even keep bentgrass fairways alive for $280k a year. My club's maintenance budget is right around $700k, and I've seen the numbers for other clubs in town. Ours is among the lowest, and our superintendent does an excellent job. I serve on our greens committee though, and our allotted budget leaves some very difficult decisions about what to allot money to. In my mind, when you have to make very difficult decisions, it means you've set your budget correctly. We spend to take care of needs, but we don't have many costs left to cut and certainly couldn't keep the turf alive on your implied suggestion of $280k. If my club has dead grass everywhere next summer, we'll be able to go to our annual meeting and proudly announce that we don't have a spending problem. However, there won't be any members left to make that announcement to, which means we'll have a big revenue problem.


Jason?

Correct me if Im wrong, but I believe you posted somewhere that you are in your late 20's?

If what you wrote above is what you genuinely believe, then golf in your part of the world has a very dim future. If your generation is accepting of those figures as the "standard" then the industry has done a better job with their sales pitch than what I thought possible.

ChipRoyce

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #48 on: November 22, 2013, 01:25:50 PM »
My club absolutely depends on cart revenue, just like we depend on most of our revenue generators.

Jason;

Completely understand, but you nailed it right there.

The term Revenue has crept into the private club mentality even though I'd argue it should be a component of a for-proft biz, rather than the member owned club.

The distinction there is that its about having the members pay fairly for their use of the club and that at the end of the year, money in = money spent.

I'm of the opinion that Dues should cover the main expenses of the club and per use fees to cover exactly that, things that members use that are not sought by the super-majority as an amenity.

Instead, in your situation, revenues derived from member carts (different than outside play carts) are used to subsidize other facets of the club. Not to say that that subsidy isn't being utilized by all members, but basically golfers who use carts are subsidizing club operations for golfers and social members who don't use golf carts.


ChipRoyce

  • Karma: +0/-0
Re: Trolleys (Maint. savings) vs Buggies (revenue)
« Reply #49 on: November 22, 2013, 01:30:54 PM »
Question, regarding private club practice.  Why not set dues to run the golf club without regard to expected revenue of golf cart (buggie) rentals?  Then, allow carrying, push trolleys, motor trolleys, and for those who want them, rent out the club's golf carts (buggies) at cost?  Seems everyone ought to be happy with this sort of arrangement.

Amen