Given the unprecedented demand experienced by golf clubs in the post COVID pandemic era, participation levels are at an all-time high. This inevitably leads to golf clubs reviewing their pricing strategies and increasing their green fees rates to drive better yield. Is this the right strategy?
It is worth noting that this blog is designed to not advise golf clubs as to the correct course of action. Our purpose is to educate using the insights the team at PlayMoreGolf have gained from working with our partner clubs. It shares insights and experience in establishing flexible membership schemes alongside other income streams.
When setting the pricing strategy for your club it is vital that we understand the different needs of golfers visiting our clubs. In most cases, golf clubs will offer full membership on a five or seven day basis. Green fees for members guests and visitors. Corporate golf days and regular golf days. Furthermore, it is crucial to understand utilisation – so when does each category of golfer play, how often they play, how much of the tee sheet does each group use.
By doing this exercise we will have a true understanding of the current situation and will be able to identify opportunities for growth. Growth does not necessarily mean more golfers but could mean attracting different golfers to play at quiet times for example.
Clubs that offer a flexible membership scheme tend to identify a customer base that bridges the gap between full members and visitors. A typical flexible member with PlayMoreGolf will play 8-12 times per annum with 75% of their golf being played at off peak times and midweek.
The value that a flexible member can bring to a golf club is centred around the points matrix and the selling price of the flexible membership. We recommend that the selling price is ideally suited to be a third of the clubs 7 day selling price. Why a third?
This is based on our knowledge of the number of times a flexible member will play golf (8-12 rounds) and the average value of a round of golf. We do know though; this varies from club to club.
In addition, with PlayMoreGolf members, they can bring some guests with them and use points to play other PlayMoreGolf partner courses. This is a huge benefit to them, and we know the members maximise this feature. Thus resulting, they deem they are getting excellent value from it which leads to higher retention rates. That feels like it could be a win-win situation.
Given the flexible member is paying in advance for their membership, showing the value that this provides is crucial. The value comes from the points matrix and what the round of golf is worth in green fee terms. We always recommend that partner clubs set a benchmark of aiming to position their matrix value to that of a member guest green fee. Why?
If we consider this carefully, the flexible member will pay the golf club upfront for their golf in 1 payment. In many cases, they will top up their points during the year, again purchasing points upfront in 1 payment. In return for this, the value of the round of golf that a flexible member play should be advantageous against the full visitor rate. Otherwise, why would you pay upfront for something that can easily be paid for as you play.
Given the unpredictable nature of the British Weather in 2023, having some guaranteed upfront revenue to compliment the subscription income from 5 and 7 members may seem like a welcome relief. Not forgetting that 75% of flexible members will play their golf at off peak times. I know from a previous life of running a busy green fee business, that a beautiful sunny day and full tee sheet was a joy. However, I did recognise how quickly that can change when the weather turns for the worse.
The danger to the course comes when prices creep up and the value runs too close to that of visitor rates. This can sometime lead to lower renewal rates as the golfer will see the value of their flexible membership reduce and, in many cases, will choose to revert to a pay and play golfer.
It is important to note that there is a place on a Golf Club’s Tee Sheet for different customer needs if structured in the right way. It comes down to the Club’s overall strategy for their tee sheet over the year.
I was speaking with a partner club over the summer who had a noticeably clear strategy for their tee sheet. They understood how much of the tee sheet was being used by 5 and 7 day members. How much much by flexible members, and how much by visiting green fees including society golf. This in turn linked back to their income targets. They could be assured that firstly they had a clear strategy in place and secondly recognised when it may need to be adjusted to accommodate changing circumstances.
So, understanding the makeup of our highly valuable asset, the golf club tee sheet is vital. Understanding the value that each golfer brings. Whether it is a full member, flexible members, visiting green fee player or member guest. By understanding the value, it can really help shape the overall pricing strategy for each of these categories.
Of course, the easiest and quickest solution would be to increase pricing across the board as a certain % increase. But will this yield the best results? Maximising the utilisation of the tee sheet, with each area priced correctly will certainly yield the best results.