I’ve read a lot over the years about how discounting green fees is a bad strategy for a golf business to take. How financially struggling golf clubs are forced into offering visitors “deals” out of desperation and, in doing so, are actually falling further into the red.
However, in my experience I’m not so sure it’s correct to make the sweeping statement “discounting green fees is bad”. In fact, I’d go further to say that discounting green fees is one of a number of promotional strategies essential to any profitable golf business.I don’t have the exact statistics but I’d be willing to place a significant wager that 99.9% of golf clubs in the United Kingdom operate some kind of discounting strategy – even those with staunch discount phobia. I say this because I don’t recall ever coming across a club that charges the same amount to play at the weekend than midweek. So the midweek rate is a discount – surely.
It also occurs to me that probably the majority of golf clubs in the UK implement twilight rounds during the summer months. This can’t be argued as anything other than discounting green fees yet it appears to escape the venomous attacks from the discounting naysayers.
The truth, in my view, is that we’re in a yield management business that absolutely must engage in discounting green fees, as well as added value and loyalty promotions, in order to maximize revenues against a largely fixed course maintenance cost. However, any discounting must be done with the facts in front of you and a body of evidence that indicate the opportunities within the tee sheet – minute-by-minute, day-by-day and month-by-month.
I was fortunate enough to spend time recently working with a delightful little pay and play golf facility in Sussex. We found that, on a monthly average, 2.5 players occupied each visitor tee time. This statistic was remarkably consistent regardless of the month or weather conditions. With some quick maths we calculated that if we could increase it to just 2.6 each month, we would add an additional £10,000 of revenue over the course of a year. We did so through a graduated discounting green fees incentive for the 3rd and 4th players – using email and targeting only customers we knew regularly played as a 2-ball.
Another club I have worked with in Essex has started to operate a highly successful last-minute tee time discounting strategy using SMS text messaging. Their electronic tee sheet software tells them how many days in advance customers book for a Saturday and Sunday. They know that if certain tee times aren’t sold by late Friday morning, there’s a likelihood they won’t be sold at all. As such, every Friday at 12pm they review the tee sheet and selectively pick out unsold times that they offer, at a discount, to a share of their mobile telephone database.
An interesting phenomenon came up at another club I did some work with in East Yorkshire. They wanted to use the 2 for 1 schemes and a 3rd party web-based tee time seller to specifically sell their off-peak tee times Monday to Friday. However, they were also promoting twilight and super-twilight rates during the very same times that actually meant the utilization was really quite high. Perversely, off-peak had actually become peak – albeit after the discount. We did some further research into their historical tee sheets and found that the reality was that the hour before the twilight discount kicked in and 30-minutes before the super-twilight discount kick-in were by far the quietest times of the day. Offering these times in the 2-for-1 schemes and to the 3rd party sellers was far more beneficial for the business.
Discounting green fees per se is not bad. Arbitrarily deciding what the discount is, when it should apply and what media should be used to communicate it with is most definitely bad. However, discounting green fees derived from taking an analytical approach that focuses on historical patterns and considers very carefully the target audience? Well, I think that’s just good business.
Matthew Orwin, Principle Consultant