With almost 50 years in the business I believe the future of golf needs a big KIS (keep it simple). Golf courses have a better chance of success by eliminating swimming pools, tennis courts, fitness centers and oversized clubhouses (baggage). I believe on-site owner-operators, sans management companies and corporate overhead, are the comfortable future for the game. I’ve said it before and I’ll keep saying it: You can’t run a golf course from 1,000 miles away.
There’s an underground joke in the consulting business that while a golf course operates out of a doublewide it makes money. When the 20,000-square-foot “palace” opens, the course is doomed.
In a highly competitive golf market, daily fee players move around like a school of fish – following the best value. I proved that while managing a course in central Florida. We could fill our tee sheet by advertising a few dollars lower – often a momentary decision. We chuckled at our corporate counterparts (companies owning several golf courses), because their managers had to beg for weeks or months to change their fees. Later, corporate CEOs (from 1,000 miles away) would beat up their GMs for missing budget.
THEY’RE CHASING THEM AWAY
A study published by the National Golf Foundation (NGF) and McKinsey and Company, “A Strategic Perspective on the Future of Golf” (January 30, 1999), more or less concluded that participation in golf had stagnated through the 1990s.
A second quarter 2003 NGF report indicated a 1.1 percent drop in participation from ’01 to ’02. The report said 61 percent of golf courses had declines in rounds in 2002. The most worrisome statistic to me was that those who play golf are playing more frequently. New players were not appearing sufficiently to replace those who left the game - not good news for an overbuilt industry.
I believe recreational golfers backed off the game during the past decade. They found golf courses too long, too penal and too damned expensive. Paying $100 for a round of golf is an absurd notion to many people. Even after the public made it very clear, they kept building courses too long, too penal and too expensive to play.
I spoke to a woman in Jacksonville, Fla., who said her husband couldn’t afford to play a course, because he’d lose a fortune in balls. That’s exactly why I believe architects fail to address the 95 percent of golfers who will never break 80.
I’ve watched people play golf since I was 12, and I believe 90 percent of golfers simply seek a reasonably priced, entertaining golf course, with a place to match scores over a cold beer. As a consultant, I generally find the golf course, pro shop, practice range and 1,500-square-foot grill room cash flow positive, but those with amenities show operating losses. That means golfers are subsidizing tennis, swimming, fitness and 20,000-square-foot clubhouses. I have yet to meet the guy who goes for a round of golf and a game of tennis.
Corporate-owned courses are further burdened with expenses to cover their offices and bureaucracy. They’ve been increasing fees, cutting staff, reducing maintenance or, in desperation, implementing all three. Either way, most of those strategies failed (we know who they are).
Unlike predatory practices of large retail corporations, golf courses can’t be run cookie-cutter style, because they are as individual as people. That’s why on-site owner-operators can outmaneuver corporate competition.
On-site owner-operators have an agile advantage over corporate golf course owners. They can adjust to conditions immediately. Their overheads are substantially lower. They can greet and shake the hands of their customers. If they stick to the KIS theory I believe they’ll have an enduring business. The winners will be golfers who play for enjoyment – and the game of golf.
There’s an underground joke in the consulting business that while a golf course operates out of a doublewide it makes money. When the 20,000-square-foot “palace” opens, the course is doomed.
In a highly competitive golf market, daily fee players move around like a school of fish – following the best value. I proved that while managing a course in central Florida. We could fill our tee sheet by advertising a few dollars lower – often a momentary decision. We chuckled at our corporate counterparts (companies owning several golf courses), because their managers had to beg for weeks or months to change their fees. Later, corporate CEOs (from 1,000 miles away) would beat up their GMs for missing budget.
THEY’RE CHASING THEM AWAY
A study published by the National Golf Foundation (NGF) and McKinsey and Company, “A Strategic Perspective on the Future of Golf” (January 30, 1999), more or less concluded that participation in golf had stagnated through the 1990s.
A second quarter 2003 NGF report indicated a 1.1 percent drop in participation from ’01 to ’02. The report said 61 percent of golf courses had declines in rounds in 2002. The most worrisome statistic to me was that those who play golf are playing more frequently. New players were not appearing sufficiently to replace those who left the game - not good news for an overbuilt industry.
I believe recreational golfers backed off the game during the past decade. They found golf courses too long, too penal and too damned expensive. Paying $100 for a round of golf is an absurd notion to many people. Even after the public made it very clear, they kept building courses too long, too penal and too expensive to play.
I spoke to a woman in Jacksonville, Fla., who said her husband couldn’t afford to play a course, because he’d lose a fortune in balls. That’s exactly why I believe architects fail to address the 95 percent of golfers who will never break 80.
I’ve watched people play golf since I was 12, and I believe 90 percent of golfers simply seek a reasonably priced, entertaining golf course, with a place to match scores over a cold beer. As a consultant, I generally find the golf course, pro shop, practice range and 1,500-square-foot grill room cash flow positive, but those with amenities show operating losses. That means golfers are subsidizing tennis, swimming, fitness and 20,000-square-foot clubhouses. I have yet to meet the guy who goes for a round of golf and a game of tennis.
Corporate-owned courses are further burdened with expenses to cover their offices and bureaucracy. They’ve been increasing fees, cutting staff, reducing maintenance or, in desperation, implementing all three. Either way, most of those strategies failed (we know who they are).
Unlike predatory practices of large retail corporations, golf courses can’t be run cookie-cutter style, because they are as individual as people. That’s why on-site owner-operators can outmaneuver corporate competition.
On-site owner-operators have an agile advantage over corporate golf course owners. They can adjust to conditions immediately. Their overheads are substantially lower. They can greet and shake the hands of their customers. If they stick to the KIS theory I believe they’ll have an enduring business. The winners will be golfers who play for enjoyment – and the game of golf.
Mike Kahn is a golf industry consultant and founder of Bradenton, Fla.-based GolfMAK Inc.
Kahn’s Golf Business Chart
WORKS
Owner-operators
Good greens
Good fairways
Good tee boxes
Fair prices
Down home service
DOESN’T WORK
Absentee owners
Swimming pools
Tennis courts
Fitness centers
Off-site overhead
Oversized clubhouses
Explore the July 2003 Issue
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