Greenfees and inflation

[Thomas Dai]

There are often comments herein about how course X or course Y has put their prices up, how their no longer worth visiting at their new price, how their ‘fleecing’ visitors etc.
But how much (no pun intended) of this is jumping on a price bandwagon or ‘fleecing’ visitors and how much is inflation driven?
Be interesting to hear from some in the business how the cost of various aspects of running their operation has changed over the last few years whether it be machinery, spare parts, sand, turf, seed, things that come in bags or plastic containers, fuels and oils, labour, etc, etc, you get the idea.
Atb

[Ally Mcintosh]

That’s a big and nuanced question.


To take it back to base level, construction inflation in Ireland has run at 11% for the last two years with many materials running higher.


Haven’t asked how much the operating costs have changed at the clubs I work at. But between consumables, sand, fuel and - to a lesser extent - labour, they are certainly going through significant increases.

[Jay Mickle]

I played Pine Needles for the 1st time 16 years ago (October 2006) and paid the rack rate of $235. This year the rate is $210. Go figure?

[Kyle Harris]

In the Eastern United States anything below $50 is *bargain*

[Adrian_Stiff]

Costs are obviously rising in the UK. Inflation is just over 10% officially but in golf terms many 'items' are wildly more:


Labour will be up 10% in the spring/April
Fuel is probably up 20% and could be 50% if we cant use red diesel. That still seems unclear.
Fertiisers are up 50%
Energy is up probably 400% if there is no gov help. One of our operations has gone from 22p a unit to 112.3.


Hopefully they will reduce business rates or at least continue with the 50% discount for hospitality/leisure.


Sunaks next statement/budget will be very interesting to see just how far he can push some business's to get tax or make them sink or just stifle growth. We have almost zero unemployment at the moment that could change quite dramatically if the construction industry takes a battering, that will be massively impacted on the ability not just to borrow but the ability of current borrowers ability to repay.


There is a very real possibility of houses becoming more expensive to build than what they could be sold for. For a long time there has always been great value in 'the land plot', that may go away.


All in all I reckon costs are more like 15% higher than last year and most I have spoken too are raising subscriptions by 10%. That will put us at £1485.

[Niall C]

In recent years there has been a number of threads that have descended into a mournful cry about rising greenfees, all of which makes me wonder if there were similar threads back in the day when I first came on this site (2009/2010) ? I certainly can't remember any but could be wrong, all of which leads me to believe the rapidly rising green fees we have seen over recent years during a period (until recently) of relatively low inflation that price rises are all about maximising income rather than recouping costs.


Could of course be wrong about that but it will be interesting to see what the non-tourist havens do in terms of their greenfees.


Niall

[Ally Mcintosh]

That said, Niall, for most clubs there was a race to the bottom around 2008 to 2012. Anecdotally, green fees at all but the very top clubs went significantly down during that period.


I think best comparisons are looking back to 2005/6, adjusting for inflation and then seeing where we have landed. No doubt our links courses and Top-100 courses have increased significantly, beyond inflation in most cases.


EDIT: UK inflation is compounded at 76% since 2005. The Open courses probably haven’t gone up too much more than that (with a couple of exceptions like TOC)… I think it’s the next level of links course that has mainly ridden off the back of a links resurgence.

[Tom_Doak]

all of which leads me to believe the rapidly rising green fees we have seen over recent years during a period (until recently) of relatively low inflation that price rises are all about maximising income rather than recouping costs.

Is that not the system we live in?  Few clubs are non-profits, and even those will take any extra money they can make to hire more greens staff or keep the dues down for the locals.


On the flip side, the ability to pass on rising costs is not guaranteed.  Golfers will play where they can afford to play.

[Niall C]

Tom


I don't disagree and that was the point I was trying to make. Clubs will charge what will give them the best return rather than charging based on costs. I'm just not sure that will mean much of an increase in greenfees if any at the type of clubs that don't get the tourist traffic, which begs the question of what do they do on costs ?


Niall

[Tommy Williamsen]

For private clubs, the model they have helps determine the guest fee. National clubs tend to charge a higher guest fee than clubs that have a local membership. My national club charges $185, while my local club charges $80. I played a top fifty very private club this year, and the guest fee was $100. At another, it was $600.

[Tim Martin]

I played a top fifty very private club this year, and the guest fee was $100. At another, it was $600.

The $600 is code for we really don’t want a lot of guests. I wonder what the unaccompanied fee is!?

[David_Tepper]

Adrian Stiff -

Do you have a ballpark idea of what your operating costs were 10 or 20 years ago vs. where they are now?

What green fees were you charging then vs. today?

DT

 

[Jeff_Brauer]

According to the NGF the average cost to play 18 holes is $61, and nine holes in the United States is $33.


The median rate, which is the price in the middle of the range instead of the average of a range, is $49 for 18 holes and $26 for nine holes.


I half recall the same survey a few years ago, and either the average or median back then was just $36.  Probably the median.

[Steve Lapper]

As an owner/operator of several courses, inflation hasn't missed golf.


Seed, Chemicals, Fertilizer and Labor are all up 20-40%. Fuel costs (gas carts) are up 40%. Out-sourced irrigation repairs or new systems at up 30-40%.


Labor markets for staffing, at least here in the Northeast, are very tight and as expected, salary competition is fierce.


At our semi-private facility, we've been able to raise the rack-rate approximately 15% without any demonstrable diminishment of demand. We are considering raising it another 5% for next season, but this venue is very competitive with nearby municipal facilities and thus already at a competitive disadvantage.


Our private course has experience the same materials inflation, yet labor (longer term contracts) has kept wage inflation reasonable (we will award end-of-the-year bonuses to help compensate our terrific staff). Trying to add a senior maintenance person to the team looks to be substantially more expensive than even two years ago. Dues will go up to make up for the food and house-side costs. FWIW, all of this and we will still be lucky to break-even!

[Adrian_Stiff]

Adrian Stiff -

Do you have a ballpark idea of what your operating costs were 10 or 20 years ago vs. where they are now?

What green fees were you charging then vs. today?

DT

20 years ago a years subscription was £850 joining fee was £1000
10 years ago we were £1000 and the joining fee was nothing
Today/ April next year we are £1485 joining fee is £400
Green fees I think were 20ys ago £35 - 10ys ago £40  today £64


Run costs have gone up a lot in the last 7 or 8 years I think. Chemical bans, huge hike on Sand, cost of machinery have been sort plus 10% for those years against say 1% inflation in the UK.


Strangely 5 years ago I reckon 20% of my enquiries would make a sound like you had just stabbed them when you said the green fee was £40...these days hardly anyone.

[Thomas Dai]

Would it be fair to say that if we as golfers want standards, conditioning etc to stay the same as at present or improve then we’re gonna have to get used to paying bigger numbers (as against what the numbers once were)?

Atb

[Tim Gavrich]

A few months ago, my local muni here in Florida raised the price of a small bucket of range balls from $3.50 to $4.00. And the cost of our weekly game is going up for the first time in 25 years by $10, from a peak cost of $60 to $70 ($20 goes into the skins and quota pots).

[Steve Lapper]

Would it be fair to say that if we as golfers want standards, conditioning etc to stay the same as at present or improve then we’re gonna have to get used to paying bigger numbers (as against what the numbers once were)?

Atb

Undeniably. Golf isn't immune to general economics. That said, unlike the sport of skiing, it'll be hard to jack prices so swiftly & steeply as golf remains a far more competitive recreational business.

[Peter Sayegh]

I played Pine Needles for the 1st time 16 years ago (October 2006) and paid the rack rate of $235. This year the rate is $210. Go figure?

Really? Both prices seem outta whack. Same season?

$235 in 2006? Wow.

[Rick Sides]

I was thinking about this the other day . Obviously operations have gone up for clubs but courses that would be a Doak 3 charging well over 100 dollars this time of year in south Jersey . I just wonder if this Covid Boom of golf interest will eventually bust .

[Stephen Smith]

I guess a lot depends on where you are.  Here in Columbus, you are lucky to find anything under $50-65.  I was just in Myrtle Beach this weekend and we played some lower end courses, and they were still over $80.  But stopped in Asheboro and played a couple of fun courses (Holly Ridge and Pinewood CC) for under $40.

[Tim Martin]

I played Pine Needles for the 1st time 16 years ago (October 2006) and paid the rack rate of $235. This year the rate is $210. Go figure?

Really? Both prices seem outta whack. Same season?

$235 in 2006? Wow.

The time to go is between November 21st and February 15th. $105 Monday to Wednesday and $115 Thursday to Sunday. Mid Pines is $95/$105 for same time period. Southern Pines is $85/95. Just like robbing a bank except there’s no threat of jail time.

[Mike Hendren]

Price always has been and always will be a function of the relationship between supply and demand.  Accordingly inflation is irrelevant.  Business is not sustainable on a cost plus basis.


If you can pass cost increases through to the consumer you simply were not charging enough in the first place.

[Alan FitzGerald CGCS MG]

Golf has always fallen foul to this. Looking at wages is a good place to start - the starting pay has barely gone up in 20 years in the States, to the point now that it is very difficult to get people, and now there is the situation where it is difficult to make a big jump as you have to bring the current staff up too.  The biggest expense is maintenance and the savings are usually found there by cutting out some practices or finding more efficient ways to do things. Unfortunately there is a limit until the downward spiral speeds up. Luckily I've tried to be proactive and stay ahead of it but many didn't so I think (hope) things will change a little now that courses are being forced to do it and can charge more to cover their costs, rather than keep cutting to make it work.

As with anything, there's a point where a golfer says its not worth x to play a course. Unfortunately golf is not a necessity, so supply will dictate demand, but on the other side, people have to realize that the x they would pay is no longer the same x it was three years ago - just as a gallon of gas isn't $2.50 any more. I don't think gas is worth $4+/gallon yet still I pay it......

[Ian Andrew]

The increase in cost of construction is around 30% in the last two years alone. Irrigation is worse.



It doesn’t happen without demand.


The initial increase in cost was labour going up (this was long overdue). Materials were next (expected).


Where things are different is the prices kept going up (limited supplies and inflationary pressure). This meant they kept going up as companies could maintain or increase their profit margins (usually that cycle doesn’t keep compounding, but this will compound again this winter).


This is driving up the cost for every aspect of golf.


That will be absorbed for a while, but not for the long term and not with a recession on the horizon. my2C