D
oes more utilization of the
golf course mean more
revenue? This issue recently
came up at a private club I know.
The club has a strong membership
and excellent facilities. Access to the
course is plentiful, and is one of the
things the membership is willing to
pay for. Some club staff and leaders,
seeking to enhance the club’s
economics are looking to increase the
utilization of the golf facilities. This
can be a double-edged sword.
Often, one of the objections to
playing golf, especially during
weekends and holidays is crowded
course conditions. At a private club,
this can be the a big detriment, not
only to member use, but also stability
in membership. Many club members
are busy folks and can’t play whenever
they choose. If, when they can get to
the course, there’s no space for them
to play, it’s hardly surprising that they
will become less likely to retain their
membership. It also diminishes the
quality of the experience for those
who can play on flexible schedules
because the course is always crowded
if there are too many members. How
do clubs establish what is the right
number of members?
When we look at clubs, it is
important to understand that there is
no right number of members for all
clubs. Each club has its own behavior
patterns. Clubs have membership
ages and makeups that can
dramatically impact how much the
facilities are used. For instance, a club
with an older membership with many
wintering away from home, perhaps
in the South of the US, will play fewer
rounds than a club with a younger
membership where the entire family
may participate. There may be
opportunity to increase utilization at
the older club, but the younger club,
even if it has many fewer members,
may be at full capacity. First, ask
yourself some questions:
•
How many rounds does each
membership generate?
•
How many rounds does the
club want?
•
How many rounds can the course
(physically) handle?
•
What kind of practice and other
facilities does the club have?
•
What does the future membership
look like?
•
Is the club truly family friendly?
Once you know these and other
answers, the club can determine
how many rounds it truly wants and
establish that as a benchmark for
calculating utilization rates. Simply
dividing the number of rounds played
by the total capacity of the golf course
may very well produce a distorted view
of the utilization rate at your club.
Of course, this metric is much
different for daily fee courses, who
seek to maximize profits. While user
experience is important, most will
do whatever customers will accept
to maximize the bottom line, as they
should, being for-profit enterprises.
Again, each one is different and the
balance of fees and volume (rounds)
must be analyzed and considered to
identify the best fit.
The concept of utilization rates
can be useful in analyzing a club’s
performance, but only if the
maximum is clearly understood
and accurately established. It varies
from course to course and rarely (if
ever) should be based simply on the
number of playable hours based on
daylight and weather.
•
Membership models
|
Larry Hirsch
Does more use
equal more revenue?
EXPERT VIEW
Larry Hirsch
Larry Hirsh is the founder of consulting
firm Golf Property Analysts, which he
established in 1988. A member of the
Counselors of Real Estate (CRE) and
the Appraisal Institute (MAI) as well as a
Fellow of the Royal Institute of Chartered
Surveyors, he is a graduate of Penn
State University and has served as past
president of the Central Pennsylvania
Chapter of the Appraisal Institute and
the Society of Golf Appraisers.
15
Larry Hirsh explains how golf clubs should
structure membership models
