Best Practices

Successful Operators Use Business Metrics to Find the Clues to Profitability

Minor adjustments and fine tuning make the difference

To succeed in golf course operations, it helps to recognize that, in most cases, it’s a thin-margin enterprise. What you charge for a round of golf isn’t much more than what you’ve spent to make it available. If that sounds discouraging, it really just puts you on equal footing with the likes of Kroger, Costco or United Airlines—all low-markup vendors and all highly successful.

“What tends to work in a thin-margin business is attention to detail and motivating your team to rack up a lot of small successes,” says Charles Kingsbaker, a GOLF Business Solutions Senior Sales Specialist. “The good news is that revenue-management technology can provide the empirical data that will guide your detective work efficiently. Numbers that are easy to access and review will show an operator how to consistently squeeze additional revenue out of their course’s tee-time inventory.”

Representing the G1 technology platform in the field every day, Kingsbaker can demonstrate exactly how this game of small-ball works. The most natural starting point is creating baseline data for performance indicators like revenue per available tee time (RevPATT), a metric combining course capacity with actual dollars spent by golfers to play rounds. A course can apply the stat to a full season of play, to a single day of the week, or even to one four-hour block on the sheet that needs extra attention.

Capacity utilization is another metric that’s vital for smart decision-making and will alert you to the need to adjust. Putting the two together is part of basic analytics among effective managers. “If your tee time utilization is below 35 percent and your RevPAAT yield is only 55 or 60 percent of your highest-yielding round, that’s a scenario where the numbers are telling you some modifications of your pricing is in order,” says Kingsbaker.

Every course has tee times that go unused—the trick is to avoid “set and forget” pricing and be continually conducting tests and evaluating results. Kingsbaker worked with a GOLFNOW client course that identified a low-utilization period and “turned the dial down” on pricing for that part of the tee sheet. The result was higher utilization and a revenue boost of more than $5,000 for that particular block of times, versus the same period a year prior.

Every course counts rounds played, but there’s growing importance placed on the number of unique golfers making up that total. For example, the course that did 30,000 rounds in 2018 will help its cause greatly if it knows, for example, that 5,000 different golfers played an average of six rounds each. Loyalty is great, but a wide user base is a big advantage when you’ve got a marketing platform like the Plus service product offered by GOLF Business Solutions, which can connect with golfers readily via outbound communication and calls to action.

In a “destination” market, the number of unique golfers should be higher than in a very localized market. When that doesn’t happen, it’s a sign the course is missing out on visits from customers who would bring fresh energy to the operation and very likely spend as though they were treating themselves to a special day. “Growing your total of uniques isn’t something we know all about yet, but we do know it’s a negative when that data point trends downward,” says Kingsbaker.

Meanwhile, low markup is not the whole story for golf courses. You also sell high-profit items like beer, wine, hot dogs and golf shirts. Selling more of your tee time inventory (and building your population of unique users) positions your operation to move more high-margin products. “That’s a positive scenario that will show up in your spend-per-visit numbers,” says Kingsbaker. Again, the incremental gain for each unit—in this case a “visit”—doesn’t have to be much in order to add up to a significant boost in revenue. Small successes, all added together, will often spell the difference between disappointing results and impressive ones.

Deliver more at your course with G1.