Who Is the Golfer?

The Winning Playbook for Golf Courses

Shortcuts to Long-Term Financial Success

6th Edition in “The Business of Golf – What Are You Thinking?” Series JJ Keegan Envisioning Strategist & Reality Mentor

[email protected] | www.jjkeegan.com 2021 The Winning Playbook for Golf Courses

Shortcuts to Long-Term Financial Success

By James J. Keegan Envisioning Strategist and Reality Mentor JJ Keegan+ Golf Convergence, Inc. Copyright © JJ Keegan+, James J. Keegan, Envisioning Strategist and Reality Mentor, 2010, 2012, 2013, 2014, 2016, 2020, 2021

ISBN: 978-0-9860705-4-9 | Print ISBN: 978-0-9860705-5-6 | ePub ISBN: 978-0-9860705-6-3 | PDF

Library of Congress Control Number: 2020909449

All Rights Reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the author, except for the inclusion of brief quotations in a review.

Table of Contents

Acknowledgments �� xi Attributions �� xiv Introduction ��1 • We Took a Different Path �� 1 • Lowering the Hurdles for the Masses �� 3 • The Supporters Project Hope �� 5 • The Doubters See Doom �� 8 • Who is Right? Ignoring the Cacophony of Chaos ��15 • Definitions: The Basis for Financial Comparison of Course Benchmarking Options ��16 • How Will You Benefit? ��18 Chapter 1 – The Playbook Outline • The Formula ��19 • The Lucky Seven ��20 • Templates to Shortcut Your Path to Success ��23 • Do You Have Any Chance? ��24 • Rank and File ��27 • The MOSAIC Profile ��28 • The Predictive Index ��31 • Checkpoint ��31 Chapter 2 – Moral Algebra • The Spider and the Fly ��33 • Who is the Customer? ��34 • Competition – What is Your Niche? ��37 • Defining Your Vision ��40 • The Infinite Game ��42 • Why ��43 • The Strategic Plan ��44 • Who Decides? ��46 Chapter 3 – The Hand Dealt • The Winds of Change ��53 • The Staircase to Heaven in Golf ��54 • Buy or Sell? ��56 • Golf is an Outdoor Sport — Duh! ��58 • Playable Days — An Important Number ��63 • The Crystal Ball ��65 • Leveraging Weather to Your Advantage ��66 • Exercises ��67 Chapter 4 – The Farm • Where to Now? ��69 • How Many Are There Worldwide? ��69 • Golf Comes in Many Different Flavors ��72 • Who is the Golfer? ��74 • Did They Kill the Game? ��76 • Long Lists ��81

iv • Right-Sizing ��85 • Another Option — Reduce Distance ��89 • When is it Time to Remodel? ��90 • Exercise ��92 Chapter 5 – The Living Organism • Russian Roulette ��93 • Delicate Balance ��95 • Expenses ��96 • If They Were the Only Costs ��99 • Who Would Have Thought? ��99 • What About a Sod Farm? �� 100 • Baskin and Robbins — 31 Flavors �� 101 • Drugs That Kill �� 103 • We Should Be Loving and Kind �� 106 • A Beacon for Change �� 108 • Exercises �� 109 Chapter 6 – The Assembly Line • The Basics �� 111 • Game Time �� 112 • Step 1 — Motivating the Golfer to Select Your Course �� 114 • Step 2 — Making the Reservation Process Seamless �� 116 • Step 3 — Where Is It? How Do I Get There? �� 118 • Step 4 — First Impressions Offset A Few Hiccups �� 119 • Step 5 — The Ambience and Culture Resonate �� 121 • Step 6 — The Clubhouse: Once Inside �� 124 iv v • Step 7 — Chariots of Fire �� 126 • Step 8 — Setting the Tone: Warming Up �� 128 • Step 9 — You’re Off and Running �� 130 • Step 10 — 18 Tees, 18 Fairways, 18 Greens: The Thrill Ride �� 132 • Step 11 — Do I Really Have to Go? �� 134 • Step 12 — Exit Stage Left? �� 135 • Step 13 — Rub A Dub Dub – Time for Some Grub �� 137 • Step 14 — A Luxury Once Experienced Becomes A Necessity 138 • Exercise �� 139 Chapter 7 – The Price is Right • What is Wrong With This Picture? �� 141 • Eliminating the Guess Work �� 144 • Here is One Quick Thing You Can Do to Increase Revenue �� 149 • While You Are At It �� 151 • Compounding the Error �� 153 • Spin the Wheel �� 155 • Barter �� 156 • Is the Industry Benefiting from Barter? �� 161 • Expensive Software �� 161 • Who is at Fault? �� 162 • Final Thought — Rates Should Be Set with Costs in Mind �� 164 • Exercises �� 165 Chapter 8 – Champagne Tastes: Beer Budgets • All for Naught �� 167 • Changing Habits �� 168

vi • Are the Needs and Desires of All Customers the Same? �� 168 • Diverse Interests — What Is Important to Them? �� 171 • Communication Challenges Amongst Four Generations �� 174 • Data Segmentation: Harder Than It Sounds �� 176 • A Lesson in Effective Email Marketing �� 181 • A Fair Loyalty Rewards Program �� 182 • Do Loyal Customers Really Matter? �� 184 • Exercise �� 186 Chapter 9 — The Divining Rod • Can’t Tell the Players Without A Scorecard �� 187 • Cuttingo t the Chase �� 188 • Peeling the Onion: The 15 Numbers that Matter �� 191 • The 14 Reports That Provide Proactive Options �� 194 • Benchmarking Resources �� 205 • Leading National Data Services �� 208 • My Food Operation Is Eating Me Alive �� 211 • The Barriers to Liquid Commerce �� 213 • Exercises �� 218 Chapter 10 — AI Imagined • Today’s Green Eye Shade and Calculator �� 221 • Many Paths to Take — Most Take You Down a False Trail �� 222 • All That Is Required �� 224 • Quick Tricks �� 225 • Mirror Mirror on the Wall — Who’s the Fairest of Them All? 228 • Requirements are Daunting — The Audience Is Challenging 231 vi vii • The Next Generation �� 232 • Turned on a Dime �� 235 • Exercises �� 238 Chapter 11 — The Magic Potion • Turning to Home �� 239 • What Won’t Change �� 240 • A Soothsayer’s Prognostication �� 243 • What is Missing? �� 249 • It Could Be a Great Life �� 253 • Transaction vs. Personalization �� 256 • On the Cuttingdge E or Over the Edge? �� 257 • Golf 2030 �� 261 • A Hope and a Prayer �� 264

Appendix A: Recommended Reading �� 267 Appendix B: Golf Industry Research Reports �� 269 Index �� 273

viii Acknowledgments

“Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to take rank with those poor spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows neither victory nor defeat.” — Theodore Roosevelt

A Sincere Thank You

What is the meaning of life? Are our lives connected, and if so, to what and how? Such a question seems to be fundamental to the human experience.

For each of us, the meaning of “my life” is different. We have embarked on this journey from many different starting points. Our views are drawn from our small but vastly unique experiences. Some stress peace amid chaos. Others emphasize community. Where life is good, we believe that we have dominion over nature such that each “loss” feels like a life crisis when in actuality, merely the daily flow of our lives has been interrupted.

However, no one goes through life undefeated.

One person can not answer the meaning of life. Each of our lives is different. As I start to pen this tome, I ponder how many individuals my path has crossed who have influenced my life during the 26,580 days I have been on this planet. From schoolmates to teachers to parishioners in church, professional associates to those casually met on airplanes, in hotels, at car rental agencies, in restaurants, while shopping for consumer goods, at sporting events, or having played golf with, and each one has shaped my views.

I realize now, that if I live as long as my father, I have 6,935 days left. The number becomes 8,760 days should I live as long as my mother. It is with this realization that I am in the fourth quarter of my life, and hopefully not in overtime or sudden death that in this journey of experience, we are a team dependent on each other.

Eugene O’Kelly, in his memoir, “Chasing Daylight – How My Forthcoming Death Transformed My Life,” (click here)1 outlined what he called the circles of life. With less than 100 days remaining, he decided to do a “victory lap” of life by enjoying a life experience one more time with each of those whose path in life he crossed who was exceptional.

1 https://www.amazon.com/Chasing-Daylight-Forthcoming-Death-Transformed/dp/0071499938

ix Applying his templates to my life, it becomes:

Level 6 — People With Whom I Have Shared Experiences: Mark Welsh, Gary Lisbon, Cathy Harbin, and Golf Magazine Panelists, where I served from 2002 – 2019, the Perry Golf Travel Team, and the numerous clients representing over 2,000 golf courses I have had the privilege to serve

Level 5 — Close Business Associates: M.J. Mastalir, David Smith, Eddie Ainsworth, Del Ratcliffe, Stuart Hayden, Kevin Norby, Mike Vogt, Peter Aiello

Level 4 — Lifetime Friends: Frank Cain

Level 3 — Adopted Family: Marianna Muck and the Witmers (Marissa, Christian, Avery, Ben, Emmy)

Level 2 — Immediate Family: Mark (my brother), Sandy (Mark’s wife), Patrick (nephew), Martha Pettinga and the Greytoks (Joe, Celie, Jill, Eric, and Lynn)

Level 1 — Life Partners: Debra June (my wife), Janna Michaela (my daughter)

x My life has evolved around the game of golf. First was as a caddie at the Philmont Country Club — a Willie Park Jr.-designed golf course in Huntingdon Valley, PA, established in 1906. The first car I drove was the jeep on the range picking up the balls. I was fortunate enough to be selected as a J.W. Platt Caddie Scholar. My early schooling led to an Eagle Scout in the Boy Scouts. Four years at Texas Christian University provided a BBA Cum Laude in Accounting. That inculcated the ability to look at a balance sheet and income statement and understand the strengths and weaknesses of a business. The MBA from the University of Michigan framed the strategic perspective, and my experience as a Captain in the USAF Audit Agency during the Vietnam War, where I was stationed in Korea, provided the preliminary practical experience that was solidified as a CPA for four years with Peat, Marwick, Mitchell (KPMG).

As I look back on the over 3 million miles flown on United, representing 308 24-hour days sitting on an airplane or over five years of my life sleeping in Marriott hotels while visiting 58 countries and over 6,000 courses, I have come to appreciate that change is a challenge.

Why is that? Is it as Yogi Berra once stated, “The Average Person is Average”? Are you most satisfied with being a spectator in life? Whether it be 21 days as some advocate to adopt a new habit or 60 days as others say is necessary, we are all looking for shortcuts.

Understanding that change will be a challenge. I wrote this book with a deep love for the game and the business of golf, with the sincere hope that you who have shown a desire for change will embrace the thoughts contained herein—recognizing that limited capital and even more precious time are formidable obstacles. Hopefully, you will be able to craft a strategic vision, determine the appropriate tactical resources required, and adjust your policies and procedures so that the financial results of your golf course are enhanced. In turn, your life is more enriching. I acknowledge and salute those who are passionately committed to growing the game of golf on a financially sound foundation because the lessons of life that golf teaches to those who play are priceless.

It is thus with great appreciation that I thank those who made this book possible including Beth Edwards, the publisher; Rose Marie Scott Blair, the editor; and Bradley Klein and Harvey Silverman, who provided a substantive review of the content to ensure that between the area of white, gray, and black in tone, I stayed on the line between white and gray.

Thus, as you are reading this book, our lives on this journey have crossed. It is with deep humility and hope that from this crossing, you derive insights and perspectives that will enhance your experience and that you will enjoy the fruits of your life’s harvest.

Concluding Thought “Gratitude is not only the greatest of virtues, but the parent of all others.” — Cicero

xi Attributions

“I learned a lesson — that I could not edit my work because I was too caught up in the story and the narration.” — Harvey Silverman

Here Is How You Will Benefit

How does a writer measure success? Writing is a lonely sport. Hours are spent crafting words with alliterations and cadence to humor the writer and to ensure that the reader benefits from the research, insights, and perspectives offered. Long sentences are rewritten time and time again with the hope of creating a single thought. When a client, reader, webinar participant, or caller sends an unsolicited comment, whether positive or negative, the circle of connection is complete, and each provides us valuable guidance.

Every day we strive to improve the profitability of our clients’ golf courses. We deliver advice in many different ways: comprehensive strategic plans, targeted client engagements, teaching at Professional Golf Management programs, webinars, blogs, articles for leading golf industry magazines, social media, and answering frequent telephone calls asking our viewpoint. We fly over 100,000 miles per year, often to as many as 15 countries and hundreds of cities and towns, trying to perfect our work.

Are we making a difference? Change is tough. Excuses are easy to formulate. Perfection is not an attainable goal. Creating a consensus through inspired leadership is rare. It seems that our society has become one in which critics abound; critics who highlight the flaws of an idea rather than offering an alternative.

But we are motivated by those who take precious moments of their time to send us an unsolicited comment or encouragement.

Patricia Armstrong, Director of Parks for Town of Yarmouth, Mass., wrote, “Happy New Year My Friend, I hope only the best for you in 2020. You have been a kind ear, and I appreciate you greatly.”

Brad Archibald, President of Pioneer Technical Services, emailed on Dec. 24, 2019, “I wanted to extend my gratitude for all the help and guidance you provided to the entire Old Works team. The golf course is near and dear to my heart as well as many in the community, and your contributions will help it persist and thrive.”

xii Paul Schock, Founder of the Prairie Club, wrote, “The afternoon you spent counseling me on our strategic options was very impactful, changed the direction of my life and helped me to set the correct priorities. I will be forever grateful.”

We took great comfort in receiving the following anonymous comments in an evaluation of our presentation to the National Parks and Recreation Conference in September 2019:

“Great session.” “Great information that I can take back to my golf course management.” “Fantastic speaker with invaluable knowledge, one of the best sessions I have participated in!” “Good information for enhancing your golf programs.” “Well presented speaker was incredibly knowledgeable.” “Definitely want more classes/sessions with JJ!” “Worth getting up at 8 am to listen to.” “Mr. Keegan did a great job on his presentation and was able to relate to all the different issues the audience faced in their respective areas.” “Well organized presentation, with useful, statistical information.” “Finally, a presentation with real data and expertise.” “The most informative golf session I’ve had at NRPA in 15 years.” “Excellent analytical information.” “Great presenter with valuable information. The best presentation that I have been to this week!” “Very useful with lots to act on.” “This was my most interesting session of the week. I look forward to reaching out to him after the conference.” “I have been attending this conference since 1997, and by far, this was the best session ever.”

Beyond those sentiments, presented below is a smattering of other emails, not to fan our pride, but to share the insights provided by readers who are the leaders in the golf industry. From their words, we hope it fuels the motivation within you to adopt the suggestions contained herein for the benefit of your career and ultimately at facilities that you may have the opportunity to lead.

Outstanding Golf Course Operators

“Your book is an entertaining, informative read. Thanks for taking the time to write such a thoughtful, educational, and valuable resource for the golf industry. It’s easy to see that your insights are right on target, but actual application in the golf industry is sorely lacking. Your book is a ‘must-read’ for anyone in the golf business. I can understand why Clemson wants to use it in the classroom. The knowledge the PGM students will gain from this exposure will be a HUGE benefit to them as they embark on a career in the golf industry.” — Del Ratcliffe, PGA, President, Ratcliffe Golf Services, Inc.

“Jim Keegan’s unique business and life experience have brought a new level of critical thinking to the golf industry. On the golf course, he may be a seven handicap, but his insights into the business side of the game are no less than ‘scratch.’ This book is about the business of golf, and what the Rules of Golf are to be playing that game.” — Nick Mokelke, CCM, Former General Manager, Cog Hill Golf and Country Club

xiii “Jim Keegan’s comprehensive analysis of the golf business is a highly enlightening manuscript for the golf business person. Whether you are a 35-year operator like myself, or just getting started in the golf business, each chapter is packed full of useful insight that can be used TODAY to make your golf operation better.” — Jim Roschek, PGA, Former President, Alamo City Golf Trail

“What an excellent book for every golf professional or anyone running a golf property in our business! It should be a required book for all PGA members and apprentices. The fundamentals illustrated could be used in any business, but certainly, apply to the golf business. Congratulations on a great resource guide to the business of golf. You are the best lighthouse the golf industry could have. Any boat rocking is self-inflicted by the stubborn and more traditional old guard that currently believes they are the golf industry captains.” — Steve Friedlander, Former General Manager, and PGA Professional, Pelican Hills Golf Course, and Destination Kohler

“Jim has consolidated years of experience, and visits over 5,000 courses around the globe, into a comprehensive review and guide to the business of golf. More importantly, he shares the tools, techniques, and best practices he has developed and repeatedly implemented to decrease operating costs, drive revenues, and improve customer service. Anyone interested in accomplishing any, or all, of these three objectives, is sure to find this book insightful and a valuable reference.” — Stuart Hayden, Co-Owner, Strato Partners

“At Play Golf Calgary, JJKeegan+ confirmed the economic viability of two new courses we are building while identifying the potential hurdles. They were a passionate sound boarding delivering progressive ideas for the brand we are developing, even providing valid suggestions as to the architectural style of the green complexes under construction. We tested their golf profit formula, consisting of 21 templates, which gave us great confidence that we are on the right path while stimulating our team on how to further excel. The worksheet providing insights on what is an appropriate green fee is uncannily accurate that is only possible with a thorough understanding of the golf experience. Would I recommend JJKeegan+? Depends. If you are an average operator, JJKeegan+ will likely crush you if you don’t have a firm grasp of the fundamentals to absorb their fast pace. If you are good and seeking to be great, JJKeegan+ is awesome. They love helping you. It is perhaps the best money we have spent on education in the twenty years we have owned golf courses.” — Scott Atkinson, Play Golf Calgary

“You were too humble in your involvement with Colorado Golf Club. It was a total team effort with you included. I appreciate everything you opened our eyes to at CGC with your assessments.” — Graham Cliff, Head Golf Professional

xiv “Words cannot express the gratitude and value that we have received over the past two months. Your reading material, templates and tools will be used going forward. The team has learned a great deal that will last a lifetime.” — Dan Campbell, CSSM, Master Golf Professional. St. Andrews (East) Golf Club, Canada

A Preeminent Professional Golf Management Program

“I am confident of one thing. For those who diligently read the book and studiously complete this case study, the vast knowledge gained will place you significantly ahead of your peers in being able to manage the profitability of a golf course. I believe students learn best by doing, and the case study has provided exercises and opportunity to grasp the essential JJ Keegan’s formula concepts and their positive effects on financial performance.” — Rick Lucas, PGA, MBA, Doctoral Student, and Director, PGA Golf Management Program, Clemson University

Industry Leaders

“JJ is one of the Smartest People in the Golf Industry.” — Joseph Steranka, Golf Sports and Media Strategist, and Former CEO, PGA of America

“In today’s business of golf, this book is a must-read to ensure you’re on the right course. Jim Keegan splits the fairway in this approach to strategic planning!” — Eddie Ainsworth, PGA, Executive Director, Colorado Section PGA

“I consider JJ Keegan a friend and a mentor. He has worked with my firm on dozens of projects and provided insights and recommendations that, at times, have provided astonishing results for my clients. After 30 years in the golf business, I’ve come to the conclusion that there simply is no one better to effect positive change in the management of a golf course.” — Kevin Norby, ASGCA

“Anyone who does not study J.J. Keegan’s informative “The Winning Playbook” is placing themselves and their golf facility at a serious competitive disadvantage, since everyone else will be reading it and incorporating its lessons into their business model.” — Bradley S. Klein

xv Respected Research Groups

“Jim Keegan is golf’s answer to ‘Money Ball.’” — Greg Nathan, Chief Business Officer, National Golf Foundation

“How many times have you heard, ‘Boy, I’d like to run my golf course?’ Well, before you do, or if you already do, you should work behind the counter in a pro shop and read everything you can about the business. You can start with this book. It is well researched by someone who knows how to apply it to a broad range of golf course operations.” — Tom Stine, Co-Founder, Golf Datatech, LLC

Concluding Thoughts

“The best way to find yourself is to lose yourself in the service of others.” — Mahatma Gandhi

“Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things you only hoped for.” — Epicurus

xvi Introduction

“A Journey of a Thousand Miles Begins with a Single Step.” — Lao Tzu

We Took a Different Path

Life is like a kaleidoscope. As you peer through the lens, one image is seen and appears static. Turn it slightly and the reflection changes imperceptibly at first. As the journey of life evolves, as the minutes become hours that become days, which turn into months, years, and decades, only in reflecting on the past is change noticed.

In 2016, I wrote the fifth edition of “The Business of Golf – What Are You Thinking?” The series originated in 2010, with updates published in 2012, 2013, 2014, and 2016. Over 7,000 copies of the book have been purchased in 16 countries, including 15 Professional Golf Management Programs.

In writing this book, the easy path would have been to take the manuscript from 2016, update it, and republish it. Had I chosen to do that, I would have been shortchanging you, the reader. It would have been a quick and easy path. You deserve better.

As importantly, I would have been shortchanging myself. Over the past four years, we have conducted extensive research. We have significantly improved the insights and perspectives on why golf courses struggle and others mightly succeed while grounded in the fundamental aspects of our previous editions.

Every chapter has been updated with new data. A few, i.e., geographic local market analysis, weather and financial benchmarking, slightly mirror previous editions because the central lessons remain consistent. Upon finishing writing the book, I scanned the prior five versions, and if there was an essential point or chart that was not included, I added it. There are fundamental lessons in the professional management of a golf course that transcend time. This book represents, in essence, a consolidation and compilation of the insights and perspectives provided in the previous five books. Thus, the methodology has been validated as a sound foundation to help a golf course achieve its potential.

However, this book is different from the others we have written in many ways.

Previous editions provided a holistic view of the industry, both internationally and nationally, and the macroeconomic impact of golf. This one doesn’t. The role of the industry-allied associations (American Society of Golf Course Architects, Club Managers Association of America, Ladies Professional Golf Course Association, National Golf Foundation, National Golf Course Owners Association, National Recreation, and Park Association, Professional Golfers Association of America, PGA Tour, Royal & Ancient Golf Club of St Andrews, United States Golf Association, World Golf Foundation) were discussed in depth in previous editions. This one doesn’t.

Previous editions covered the valuations of courses and the art of buying and selling a golf course. This one doesn’t.

Previous editions covered the varying ownership and management models. This one doesn’t.

If the subjects not covered make you feel shortchanged, for the first 250 readers, send me an email message at [email protected], and for $29 (plus $5 for shipping, U.S.), I will send you a copy of that 2016 Edition of “The Business of Golf – What Are You Thinking?” book that retailed for $99. The narrative presented there on the subjects not covered here is as current today as it was then.

What the 2021 edition focuses extensively on is:

• What is the financial potential of a golf course? • How does one create the strategic, tactical, and operational components to maximize the investment return? • Why is consistent execution essential to ensure one achieves the goals defined?

Importantly, the principles of sound business management, as articulated in this text, remain valid regardless of whatever the issues that are presented by the COVID-19 pandemic. While previous editions have been distributed in printed and digital format, this book is unique in that it is shorter, but with the evolution of technology, we are providing you a plethora of supplemental resources, including but not limited to:

• Hotlinks to numerous books, online publications and video content. When you see “click here,” if you have invested in the electronic edition of the book, you will be redirected, if online, to that information. If you have purchased the print edition, at the bottom of each page in which there is a “click here,” we have listed in BLUE the URL that you enter in a browser to view that information. Note that if the LINK is in BLACK, we are providing it merely as a source reference.

• The ability to download templates for a nominal supplemental fee that will facilitate your creation of a strategic plan to ensure you have sufficient resources to be highly profitable in the operation of a golf facility. Note that the inside of the hardback book cover includes a code to provide you

2 substantial discounts to these field-tested templates. These templates were available in total at retail from our website, jjkeegan.com, for $4,790 (click here).1 They are now offered to purchasers of this book for $1,000. For those that buy the electronic version, at jjkeegan.com, you will be given the opportunity to register for the discounted templates.

• Appendix A lists business books we recommend for your additional reading pleasure. Many of the central tenets of those books are referenced within this book.

• Appendix B contains a reference library for leading research studies within the golf industry in the public domain that is available for download. Note several of the reports are available for separate purchase or are complimentary to members of various Associations. In respecting their intellectual property, we have a link to the site where they may be acquired.

It is for that reason that the digital format for this book is priced higher than the printed version. The convenience of click and play vs. having to copy and paste a link into a desktop computer comes at the cost of our most valuable resource — time.

There is a second reason why we would give away or massively discount such valuable, market-tested content that is core to our role as an envisioning strategist and reality mentor.

Lowering the Hurdles for the Masses

Truth be told, we have become increasingly frustrated over our career with the inability of the average person to do the intuitively obvious that is clearly in their best personal interest and the optimum financial interest of the golf course. We have become weary listening to the plethora of excuses offered as to why their golf course is underperforming:

1) Our course is unique, and standard business rules aren’t applicable. 2) The weather has been consistently adverse. 3) Supply vastly exceeds demand. 4) We can’t raise prices without losing a substantial number of golfers. 5) Barter is killing us. 6) Expenses from wages to agronomic inputs are growing exponentially. 7) Qualified taffs is difficult to find. 8) Software systems don’t provide the tools and information needed.

3 9) Marketing efforts produce little results. 10) We are unable to control the pace of play effectively. 11) The Allied Associations in the industry promote their self-interests at the expense of the golf course owners.

For municipalities, the reasons expand to include:

1) It is an election ear,y and we can’t make changes. 2) We operate in a political arena, and it requires several years to make incremental changes. Exponential changes are out of the question. 3) Our Golf Advisory Board is inflexible in recommending rate changes 4) The City Council doesn’t understand the recurring capital requirements of the golf business. 5) We cannot issue another bond until we pay off the current heavy debt load.

6) Our financial ecordr formats are dictated to us by the City’s controller, and we know that they are not consistent with generally accepted accounting principles for golf, but they won’t provide us the information we need in a meaningful format. 7) Regulations on procurement, labor, the environment, and citizen advocacy groups extremely limit our ability to manage the facility professionally. 8) Our fringe benefits are an uncontrollable burden. 9) Municipal employees are not expected to issue a notice of award resulting from the issuance of a Request for Proposal to responding third parties, and therefore, many choose not to submit again due to our lack of professional courtesy.

We summarily reject the notion that merely because a municipality owns the golf course that it is given a King’s X from proper professional management solely because elected officials govern it, and citizen gadflies often dominate the decisions.

Note that similar lists for private clubs and resorts could be created.

We are strategists who precisely execute based on field-tested quantitative data. Most of those we meet in the industry immerse themselves in finding reasons to explain their underperformance. They sabotage their chance of success by being locked in a menial myopic mindset, believing that uncontrollable forces dictate their results. The list of excuses is long, and the number of valid reasons for nonperformance is short.

4 I often think that “Eeyore” from A. A. Milne’s “Winnie the Pooh” (click here)2 should be the designated golf industry mascot.

By providing access to all of the resources we have built over a 30-year career, we hope to remove a few of the barriers to the successful operation of a golf course.

The tone of the above paragraphs may seem cynical, sharp, or perhaps too blunt for the politically sensitive reader. It is easy for the idle spectator to find fault to justify their inabilities to perform.

In writing, we sometimes struggle to find the proper balance in tone or style. An adjective here or an adverb there may unduly lead you to form an incorrect opinion about the message we are trying to convey.

We vacillate widely on the spectrum at times between being kind and reflective, insightful, and provocative and, hopefully, rarely critical or harsh. Our hope is merely to present the economic data and let you, the reader, through the Socratic method, answer the questions for yourself.

The Supporters Project Hope

This bifurcation in writing style also lingers over us in how to cover the economic realities of the industry. There is a vast chasm between the proclamations and publications by the Allied Industry Associations, notably the National Golf Foundation, that have a blue sky “Chamber of Commerce” feeling and the failing operating results of many golf courses that are highlighted daily by Google alerts.

On the positive side, there is a growing sentiment that the golf industry has stabilized.

In the 2017 presentation, “The Real State of Golf – Fact or Fiction,” (click here)3 Jon Last, president of Sports and Leisure Group, made the case that citizen journalism, which reports through “echo chambers” that the golf industry is a train wreck, misrepresents fact. He said the golf industry has now stabilized, and “flatness isn’t necessarily a perfectly straight line.”

He noted that in a fast-paced world with abundant reporting, we tend to select those statements that reinforce our perspectives in a polarized world, regardless of their veracity.

2 https://www.amazon.com/The-Complete-Tales-of-Winnie-The-Pooh/dp/0525457232/ref=sr_1_1?keywords=Winnie+the+Pooh+book&qid=1578005449&sr=8-1 3 http://www.jjkeegan.com/?ddownload=86381?LLM=*|HTML:EMAIL|*

5 It should be noted that 2020, due to the world pandemic, is a “throw-away” year for golf courses that are likely to see revenues fall precipitously and expenses rise. Thus, the lessons provided herein are even more important to stabilize a golf operation for future financial success.

Here are the facts.

In the U.S. in 2019, 14,336 golf facilities were representing approximately 16,383 golf courses. 24.3 million golfers played an estimated 441 million rounds, and 2019 marked the second increase in golfers in 15 years.

The National Golf Foundation reported that one in four Americans, 82 million people in total, consumed some form of golf media in 2017.

Rounds were up in 2019, due to favorable fall weather in the Northeast section of the U.S. Programs were introduced designed to attract new entrants, and Get Golf Ready and PGA Junior League are making a measurable impact.

Get Golf Ready has generated over $1 billion in revenue for the industry. The retention rate in the first year of participants is 78%, and incremental spending in the first year exceeds $1,000. The five-year retention rate is 60%, compared to a 25% retention rate for those introduced to golf through a non-structured program.

PGA Junior League participation soared in 2016 to 36,000, of which 80% were new to golf. One of the great secondary benefits of PGA Junior League is the exponential value of the kid’s parents buying memberships, merchandise, and food and beverage while attending events. Regretfully, due to COVID-19, PGA Junior League was canceled for 2020.

The participation rate of 11% of the U.S. remains constant. Golf is one of the country’s most popular recreation sports, as highlighted below.

Sport Participation Rate Golf 1:9 Basketball 1:12 Tennis 1:17 Baseball 1:19 Skiing 1:20

Soccer 1:26

Over the past five years, more than 11.5 million have taken up the game of golf. Of these beginners, over 31% are women compared to 23% of current golfers, 26% are non- Caucasian compared to 18% currently, and 62% are under 35 years of age compared to 35% currently. Other positive indicators include an estimated 400,000 new golfers

6 over the age of 65 and 4.7 million business golfers who played nearly 25 million rounds annually. With full disclosure, over 12 million have ceased playing.

There are positive currents that are reshaping the golf industry:

• Total participants, including those engaged off course, now total 34.2 million individuals. • The latent demand for golf (non-golfers who have indicated an interest in learning the game) is nearing 15 million. • TopGolf, founded in 1997 in Watford, England (click here)4, saw its first location open in the U.S. in Alexandria, Va., in 2005. Today there are 58 locations: 54 in the U.S., 3 in England, and 1 in Australia. Eleven more sites are under construction.

TopGolf is not ‘regular golf’ — it is an elaborate driving range and entertainment center. It is a game that anyone can play. Participants score points by hitting micro-chipped golf balls at giant dartboard-like targets on an outfield. There are many variations of the game, and points are determined by how close the ball comes to the targets and by distance.

TopGolf resonates well with all for three simple reasons: 1) you are not required to have successive well-executed shots to have success, 2) the time between shots is measured in seconds, not minutes, and 3) its popularity, which has spawned competition from Big Shots, Drive Shack, and OnCore Golf Technologies.

What is compelling about the off golf course options are the demographics of TopGolf golf as reported on Jim Cramer’s Mad Money (click here).5 What is fascinating is the age difference between green grass golfers and those who frequent TopGolf, as highlighted below:

Age Green Grass Classification Golfers Top Golf Variance Under 17 10.10% 14.00% 3.90% 18 – 34 24.95% 53.00% 28.05% 35 – 44 16.40% 16.00% -0.40% 45 – 64 30.40% 15.00% -15.40% >65 18.05% 2.00% -16.05% 100.00% 100.00%

4 https://en.wikipedia.org/wiki/Topgolf 5 https://www.cnbc.com/2017/12/11/topgolf-ceo-seeing-real-growth-in-golf-winning-with-millennials.html

7 Considering that 60% of TopGolf participants have not visited a golf course, it provides an excellent opportunity for the growth of the green-grass game. TopGolf believes up to 25% may eventually play at a green-grass course.

Other interesting facts gleaned from over 1,000 green grass golfers surveyed by Jon Last of Sports and Leisure Research (click here)6 include:

• 25% do not always keep score. • 50% met a stranger at a course who became a friend. • 60% have introduced someone to golf.

• Only 4% show an interest in footgolf or disc golf.

One of the true positive stories about golf is that the World Golf Foundation reported that the golf industry contributes $3. 9 billion to charity annually, with 143,000 charitable events in which 12 million participated. The $20 billion raised in charity over the past several years by the golf industry exceeds that of the NFL, NBA, MLB and NHL combined.

The defender for the golf industry rests.

The Doubters See Doom

How long would you fund a business if you knew that you were losing money?

According to the National Golf Foundation, 70% of municipal golf courses can only cover operational expenses, 40% of municipalities have debt on which 60% of them can’t cover the principal and interest obligations from the course’s cash flow, 73% are deferring capital expenses, and 39% are lowering maintenance standards.

The PGA Performance Facility Operating Scorecard (click here)7 reports that the median financial performance of a municipal golf course is challenged:

6 http://sportsandleisureresearch.com/ 7 https://resources.pga.org/increase-revenue/business-toolkit/pga-facility-operations-scorecard

8 The performance of Daily Fee/Semi-Public is slightly different. Revenue and expenses are a comparable $1.2 and $1.1 million, respectively. Green fees for Municipal Golf Courses are $49 compared to $56 for daily fee golf courses, and rounds played are 30,150 for municipal golf courses vs. 24,499 for daily-fee facilities.

For the industry in the aggregate, Dr. Eric Brey, University of Wisconsin – Stout, reported at the 2019 USGA Innovative Symposium, that golf facilities lost $66,500,000 annually from 2014 – 2017. (Click here)8

The statistic that concerns me is the NGF’s forecast of the number of golf courses that need to close for demand and supply to be in balance. The NGF projects that assuming 150 courses close per year, and there is no growth in rounds, demand and supply will not be in balance until 2030. Even with a 1% growth in rounds, stasis will not be reached until 2023.

The NGF undertook a financial analysis of golf courses and concluded that 26% of public golf courses and 14% of private courses were in poor health. Since 2006, supply has already contracted by 10%. In 2019, 279.5 golf courses closed while 9 courses opened. Not much growth is anticipated.

It is my opinion that there is a divergence in the principal drivers in the golf industry and why that change occurs at a glacial pace and not an incremental or exponential pace.

8 https://www.usga.org/content/usga/home-page/videos/2019/03/14/2019-golf-innovation-symposium--defining-golfer-experience.html

9 The industry tries to embrace what it is not. Well-meaning Associations create programs and buzz, in part for self-preservation to protect their turf, with the hopes that the masses will follow their lead. The allocation of money for marketing and resource assistance is too low for these programs to become effectively implemented.

Further, even if the Association expended sufficient funds, it is debatable whether golf course operators, in the aggregate, possess the capability (motivation, desire, or time) or the capital to implement necessary changes.

Simply stated, if the industry is to expand, it will need to appeal to middle-income folks, ethnic minorities, and women — all of which is unlikely.

First, golf is a game that has been, is currently, and will always be a game of the wealthy. The participation rate of golfers is less than 5% among those with an income of less than $40,000 in the current decade. The participation rate soars to near 15% when an individual’s income exceeds $125,000. This separation of participation by income has been consistent over the past 30 years and will likely remain such for the foreseeable future.

Thorstein Veblen, in “The Theory of the Leisure Class” (click here),9 described golf as the conspicuous consumption of leisure by the wealthy and an integral component of social stratification.

Contributing to the challenges of growing the game is the diversification of American society. The participation rates of Caucasians, with an annual income ranging from $15,000 to $150,000, is 275% greater than Non-Caucasians. It has often been said that for every round a Hispanic American or African American plays, Caucasians play seven rounds. For every one round an Asian American plays, Caucasians play four rounds.

Sandy Cross, Chief People Officer of the PGA of America, gave a compelling presentation at the 2018 PGA Merchandise Show where she cited a 2015 study by Golf 20/20, which found that:

• Of 12 leading golf organizations, 95% of the Board of Directors, 97% of Senior Leadership, and 86% of full-time staff were Caucasian.

• 92% of the U.S. population growth from 2000 – 2014 was multicultural and represented $3.5 trillion in spending power.

• Caucasians will become a minority in America within the next decade or so.

9 https://www.amazon.com/Theory-Leisure-Class-Thorstein-Veblen/dp/1689487550/ref=sr_1_1_sspa?d- child=1&keywords=Theory+of+the+Leisure+Class&qid=1585166937&sr=8-1-spons&psc=1&spLa=ZW5jcnl- wdGVkUXVhbGlmaWVyPUExTUtNRFk4MVY5MFo5JmVuY3J5cHRlZElkPUEwMTc1MTczMVRZUDU3QjQwRFJZ- JmVuY3J5cHRlZEFkSWQ9QTA4OTk0NDIySzExUUZBOEJMTjRQJndpZGdldE5hbWU9c3BfYXRmJmFjdGlvbj1jb- Glja1JlZGlyZWN0JmRvTm90TG9nQ2xpY2s9dHJ1ZQ==

10 Cross also cited some alarming facts in her presentation. According to “A New Context for Business Golf” study (click here)10 conducted by Sports & Leisure Research Group for the PGA of America in 2016:

• Only 30% of male golfing executives business rounds are played with mixed- gender groups. • Only 45% of golfing men executives enjoy playing business golf with women. • Only 61% of the golfing women executives enjoy playing business golf with men.

• 41% of golfing businesswomen feel that they have encountered discrimination on the golf course.

Coming out of the study in 2016, PGA of America held a committee meeting to determine how to attract more qualified women to the golf profession. The answers were not immediately apparent, obviously.

Since that time, PGA of America launched a strategic initiative in 2019 called PGA WORKS, designed to evolve the golf industry’s demographically homogenous workforce. Individuals need to see others that look like themselves and individuals from similar backgrounds as their own successfully enjoying careers in the golf industry, if they are going to consider pursuing that career path. PGA WORKS offers very clear pathways into the golf industry workforce, and for PGA of America membership, for women and individuals from diverse backgrounds. Those pathways include fellowships, scholarships, internships, career exploration events, and the PGA WORKS Collegiate Championship, where the student-athletes’ competition rounds double as their PGA of America Playing Ability Test — the first step on the pathway to PGA of America membership.

Cross often talks about golf being “a sport of invitation.” It is not a sport that someone takes up on their own. One’s golf journey almost always starts with an invitation from someone who’s already on the “inside” of the sport. She talks further about the “self-reinforcing vortex of sameness” in the industry where individuals from similar backgrounds, often with similar educational pedigree, and often wearing similar garb, are inviting “sameness” to join them at the club, on the tee or at the practice range.

The most powerful thing the industry and golfers can do to evolve the demographic composition of who plays the game, works in the business, or participates in the golf industry’s $85 billion supply chain, is to actively, intentionally and authentically invite individuals from diverse backgrounds in.

10 http://www.jjkeegan.com/?ddownload=86380?LLM=*|HTML:EMAIL|*

11 This gender bias in the golf industry is reflected in the picture below taken at the 2019 PGA Merchandise Show at the Titleist presentation: eality Mentor

Can you spot a female or minority person in this picture? I can’t. Please help me out. Did I miss something? Titleist is a fantastic company. Are they insensitive to today’s reality? Absolutely not. The picture merely represents an accurate depiction of the sport.

In September 2018, a presentation titled “Three Macro Trends that Will Impact Golf in the Future” (click here)11 by Jon Last, Sports and Research Leisure Group, concluded that engaged golfers are mired in flatline participation. His survey of 2,000 golfers found that:

• The reality is that the engaged golfer who drives 80% of the spending is maxed out. • Less than one in five golfers believe that participation growth can be achieved by existing golfers playing more. • Expected expenditures across all categories are trending lower for the first time in three years.

Looking a decade into the future doesn’t project much growth for the golf course industry as the number of golfers may range from under 22 million to slightly over 26 million, depending upon the participation rate of Generation X, which is forecast to likely decrease.

11 http://www.jjkeegan.com/?ddownload=86176?LLM=*|HTML:EMAIL|*

12 The challenge within the industry can be seen during the past four years. Although the Keiser University College of Golf is doing well, the five-campus Golf Academy of America closed, and the Professional Golfers Career College is struggling, as are several PGA Professional Golf Management Schools.

It makes little sense for a college student to spend upwards of $200,000 for a four-year education in the golf industry when their starting salary may only be $30,000. First-year students in PGA PGM Programs have dropped from over 800 students to less than 500 in the fall of 2019. The cost of education is increasing at a rate far higher than inflation. Some ponder the economic viability of Golf Academies that don’t provide accredited degrees. Students receive a career foundation, but opportunities in the golf industry may not present themselves.

Our experience as an envisioning strategist and reality mentor shows us the dark side of the industry. Perhaps our view is overly negative, but most of our clients are losing more than $200,000 annually in cash flow and have no capital reserves.

Email messages I receive regularly reinforce these thoughts. In December 2019, I heard from three of the best golf operators in the United States.

A leading multi-golf course operator in the eastern United States wrote:

“For what it is worth, I think that any golf operation grossing below $800K is going to have a challenge in making it in today’s world. The increased cost of labor (where market conditions, forget about minimum wage laws) are pushing wages well beyond the range we are offering for positions such as cart attendants, increased costs of maintenance equipment, fertilization, pesticides, water use, the list goes on and on — continue to constrict the gross profit margins of any operation below that number.

For a single-owner facility, where the owner is behind the counter or on the mowers him/herself, it is more feasible, but as a business model, it is tough. The revenues have to come up in this operation unless it is going to continue to be subsidized.”

Another multi-course operator in a major midwestern city also expressed his feelings:

“With the labor shortages, at least in public golf, the price needs to go up to pay for staff or the jobs can’t get done. People have no idea what it costs to provide the 150 acres plus, of green open space on which to play the game of golf. The profession, in my view, needs to step up and educate its customers.”

13 Finally, a West Coast operator, who is spending more than $350,000 leasing a municipal course, shared his woes:

“California minimum wage is going to $13 on January 1, 2020. 67% of our workforce will get the $1 min wage increase resulting in payroll increasing $146,000. This expense isn’t counting; I had to give my GM’s and Supt a 3% to 5% raise. By 2022, the minimum wage will be $15.

The municipality is dysfunctional now that key members of the Board are termed out, and the new members are clueless. We are well over a year past due to a rate increase, and it is perpetually delayed because of the Parks Dept. Water ($300,000 per year) and electricity have increased significantly. Our carts come off lease late next year, and the cost of new carts has gone up about 5% a year for the last four years, so we are looking at approximately a 20% increase in cart costs in 2021.

“Rounds have been up and down due to crazy rain and heat in 2018 and 2019, and we are not seeing rounds growth. We see some of our best customers either dying, quitting due to age in several cases, or quitting due to severe dementia. We know the names of the customers. This is not ‘theory.’

“A large percentage of our customers are either low or fixed income. Even as we raise prices, I believe demand will soften. We raised many F&B prices last year by 6%, and our business declined slightly.

“We can’t afford enough water or labor to maintain the standards I’d expect to see. We are closing operations earlier unless extremely profitable. Driving range night hours being cut way back, closing the diners earlier, and closing the bars earlier. Using this metric end of day hours aren’t profitable on many weekdays and most winter days. This compounded by the fact the courses do so many senior rounds, and they don’t spend money in the diner and bar. So with rounds in the 73,000 – 80,000 range, there aren’t enough non-senior golfers to make these venues busy later in the day.

“The Superintendent is resistant to seasonal staffing because finding new people to hire and train at the minimum wage is difficult.

“Thought you might like to hear about my real-world experience as a knowledgeable operator in the best golf market in the world. It’s tough.”

Supporting the West Coast operators regarding the frequency of senior golfers, an analysis of rounds by age shows that while the average golfers play 18 rounds per year, those over the age of 65 play greater than 35 rounds per year, topping out at over 50 rounds per year by golfers in their mid 70s.

14 Who is Right? Ignoring the Cacophony of Chaos

What is the lesson for the golf course operators? Listen a lot and choose selectively. Your success is ultimately dependent upon your efforts. While Associations mean well and believe their efforts contribute positively to the golf industry, it is sometimes hard for them to separate their interests from what will ultimately benefit you as an individual operator in the golf industry.

Thus, the purpose of this book is to insulate you from the noises within the industry and create a laser focus on your operation to ensure its success.

Here is an executive summary of the ten keys to the success of a golf course:

1) Define your vision consistent with Maslow’s Hierarchy. Maslow posited that human needs are arranged in a hierarchy and that certain needs take precedence over others. 2) Understand the competitive aspects of your market: demand vs. supply. 3) Offer the proper experience based on blending the slope rating of your golf course to the MOSAIC profile, which is a geo-demographic classification of households reflecting attitudinal behaviors. 4) Understand the number of playable days and adjust your staffing and your rate schedule accordingly. The golf course packages various types of discounts by the time of day, day of the week, time of year, and age. Golf is one of the few industries that prostitutes itself seeking to appease every golfer by the least they are willing to pay. 5) Don’t offer seasons, loyalty cards, and punch passes. Your customer is smarter than you are, and they will purchase the program that generates the lowest yield to you. 6) Implement technology where possible to eliminate labor expenses. Explore check-in kiosks and mobile apps to empower the customer to serve themselves.

7) Fifteen vital key benchmarks provide navigational guidance to the successful operation of a course. One is to ensure your revenue per green and cart fee round purchases is at least 60% of your prime time rate. You will learn the other 14 later, in Chapter 9. 8) The golf course is a living organism that requires constant reinvestment: $130,000 in annual course improvements and $75,000 for building reserves. Your EBITDA (earnings before interest, taxes, depreciation and amortization) target should be higher than these two financial reserves.

15 9) The green fees should be set based on the experience you provide and not on what your competitors are charging. While barter is terrible, resist the temptation to set your green fee to capture the last possible round of the golfer who is willing to pay the least. 10) Understand your customers’ loyalty through consistent feedback via electronic surveys and text message polls.

This book is going to take you on a journey that will identify the financial potential of your facility and provide a path to guide you to your success. The starting point is understanding the definitions used within the golf industry.

Definitions: The Basis for Financial Comparison of Course Benchmarking Options

The National Golf Course Owners Association (NGCOA) and other organizations have adopted a set of standards to facilitate the comparison of financial data between facilities.

The essential definitions included in this industry list follow.

Rounds • Regulation Round: A regulation round of golf is defined by one person who tees off in an authorized “start” on a regulation golf course. The round is not determined by the number of holes played or the fees paid.

Participation • Participant: A participant is a person five years of age or older who played at least one regulation round of golf or utilized an alternative facility or golf range at least once in the past 12 months. Determine the total number of participants by adding the number of golfers, alternative golfers, junior participants and range users.

• Golfer: A golfer is a person age 18 or older who has played at least one regulation round of golf in the past 12 months.

• Occasional Golfer: An occasional golfer is a golfer who plays fewer than eight regulation rounds in a year.

• Core Golfer: A core golfer is one who plays 8 to 24 regulation rounds in a year.

• Avid Golfer: An avid golfer is one who plays 25 regulation rounds or more in a year.

16 Types of Facilities and Courses

• Regulation Golf Facility: A regulation golf facility is a golf complex where there is at least one regulation golf course.

• Regulation Golf Course: A regulation golf course is any 9- or 18-hole golf course that includes a variety of par-3, par-4, and par-5 holes, and is of traditional length and par. A 9-hole facility must be at least 2,600 yards in length and at least par 33; an 18-hole facility must be at least 5,200 yards in length and at least par 66.

• Alternative Golf Course: Alternative golf courses include the following:

• Par 3 Courses: Par-3 courses are courses consisting exclusively of par 3 holes that average at least 100 yards in length.

• Executive Courses: Executive courses are short courses with a variety of par- 3, par-4, and par-5 holes. Eighteen-hole executive courses are 5,200 yards in length or less, with a par of 65 or less.

• Pitch & Putt Courses: Pitch & putt courses are short par 3 courses where the holes average less than 100 yards in length.

Courses: Structure

• Public Access Golf Course: A public access golf course is a facility that provides the least limited access and which may or may not offer memberships. Public access courses include:

• Municipal Golf Course: A municipal golf course is one that is owned by a tax-supported entity such as a city, county, or state and which is open to the general public at all times.

• Daily Fee Golf Course: A daily fee golf course is a privately owned course that is open to the public without restriction.

• Semiprivate Golf Course: A semiprivate golf course is a public course that also offers memberships.

• Military Golf Course: A military golf course is one affiliated with a military base where members of the military and their families receive preferred rates.

17 • Private Golf Course: A private golf course is a facility that restricts play to members and their guests. A private golf course can be either equity (owned by the membership) or non-equity (corporately owned).

• Resort Golf Course: A resort golf course is a golf facility usually affiliated with a lodging component.

These definitions are important because they serve as the foundation for the accepted accounting principles for the golf industry. Meaningful comparisons are made by ensuring that the financial statements are consistent with industry definitions.

How Will You Benefit?

As a writer I am very mindful of who is the reader.

We hope that the college student studying in a Professional Golf Management Program will acquire a fundamental knowledge of the principles to manage a golf course successfully. Your passion and interest in the business of golf will ensure its longevity.

For the current professionals employed in the management of a golf course, to you, we extend our gratitude for enhancing the quality of life of all those who visit your facility. It is our wish that the insights in this book will provide you with a renewed perspective and motivation to enhance the experience you provide because golf is a fabulous arena for family, friends, and associates to bond in an outdoor environment.

To the owner, we desire that your love for the game and the business creates value for your customers on a foundation that optimizes the quality of your own life and the financial return from your investment.

Concluding Thought “As long as the reason of man continues fallible, and he is at liberty to exercise it, different opinions will be formed.” — James Madison

18 Chapter 1 – The Playbook Outline

“The more challenging the climb, the more rewarding the view. From the view comes the vision.” — Caribou Coffee

The Formula

The ultimate financial success of a golf course rests principally with the owner and management team. It is purely an entry-level business, albeit a small one at that. The ownership of a golf course is challenging because every golf course is unique. However, a standard set of business principles fashions the success of each golf course.

Every business has a formula for success. Every enterprise has the opportunity to create value for its customers on a foundation that optimizes its financial return. The foundational formula for a golf course is [value = experience – price]. The golf course creates loyalty when it provides an experience equal to or greater than the price. The converse is also true when the price exceeds the experience; the course will find itself in a downward spiral.

While that is a fundamental concept, there are many components to an effectively managed facility.

The management of a golf course encounters uncontrollable and controllable factors. To create a strategic plan to effectively manage a golf course consists of a sequence of seven steps highlighted below:

19 The methodology, tested over two decades, is based on heuristics, which refers to experience-based techniques for problem-solving, learning and discovery. The result is to find a solution, which is not guaranteed to be optimal, but good enough for a given set of goals. We use heuristic methods where the exhaustive search is impractical, to speed up the process of finding a satisfactory solution via mental shortcuts to ease the cognitive load of making a decision.

The Lucky Seven

The creation of a strategic plan requires work.

This seven-step process, outlined in this book, is the “critical path” that moves you from strategy to tactics to operational execution.

Here is an overview of each of these steps:

Strategic Plan

1. Geographic Local Market Analysis This analysis includes the six vital measurements that accurately forecast the potential of your facility. They are the MOSAIC profile; the age, income, and ethnicity of your customers; the number of golfers per 18 holes; and the slope rating within your competitive market. Only exclusive remote private clubs and resorts escape precise classification based on these factors.

20 21 This step answers what:

• The course’s financial potential is. • Annual revenue should be. • The appropriate green fee is.

These are vital data points you need to know if you are going to manage a golf course profitably.

The key questionsto be answered are: Are the MOSAIC profile, age, income, ethnicity, and population density sufficient to sustain the golf courses? Do the demographics indicate that there is enough demand to meet the available supply? How many golfers per 18-holes are there within the competitive local market? Where does your course rank as to its financial potential amongst the 14,336 golf facilities in the United States? (Chapter 3)

2. Weather The axiom that “if rounds are up, it’s because of good management, and if rounds are down, it’s because of bad weather” is a standard joke, but golf is an outdoor sport. Experts estimate that over 90% of rounds played are when the temperature is between 55 and 90 degrees. Monitoring the number of playable golf days in a year compared to a 10-year trend allows an analyst the opportunity to filter the financial information to differentiate between the impact of weather and the effect of management on a course’s performance.

Conduct a weather playable-days study to determine if you are over or underperforming the weather. Access to Weather Trends’ 11-month weather forecast service is available for a reasonable fee, and it will be 88% accurate for temperature and 83% accurate for precipitation.

The key questions to be answered are: What impact has weather played on rounds vs. management policies? Are there sufficient playable days to generate a return on the proposed investment? Has weather forecasting been fully leveraged? Are season passes appropriately priced based on the number of playable days and how frequently the golfer plays and the discount desired? Is seasonal staffing being correctly deployed?

These first two tasks quantify the uncontrollable factors that impact a golf course’s financial performance and clearly define the course’s investment potential. The results from this analysis determine the strategic vision for the facility and the viability of the course.

Assembling this data represents a competitive market review. (Chapter 3)

21 Operational

3. Architecture and Agronomy A golf course is a living organism. It only appears as designed by the architect on the day it opens. Primary constraints to keeping it looking as intended include annual renovation expenses and the equipment required to maintain a course. Comparing the available equipment to industry standards and identifying deferred capital benchmarks provide valuable information.

The key questions to be answered are: What is the proposed style of the golf course? Are the design, agronomic and turf practices, and equipment levels compatible with the vision for the facility? (Chapters 4 and 5)

4. Operations The entrance to the clubhouse, staffing, organizational structure, merchandising, food and beverage, accounting and budgeting procedures, information systems, advertising, marketing, and public relations need to be evaluated and compared to the industry’s best management practices. (Chapters 6 and 7)

The key questions to be answered are: Will the value provided equal or exceed the associated fees? Are the proper operating procedures going to be consistently deployed through each step of the “assembly line of golf”? What additional programs can be added to bolster revenues? Are the marketing strategies adequately aligned between the customers’ preferences and the experience offered? Are the staffing levels appropriate to provide the desired level of customer service?

5. Customers: Learning Their Preferences Enlightening insights can be obtained by utilizing a golf course’s database, purchasing an email list of local golfers, and employing electronic survey tools. Why aren’t the golfers in your area playing more? What are the motivating price points in your region? What is your course’s brand image? You’ll never know the answers if you don’t ask the questions.

Fifteen percent of the customers generate 60% of the revenues; 25% generate 85%, and many daily fee golf courses have at least 50 customers who spend over $4,000 annually. While only half the golfers who played a course one year will return the next, identifying your core customers provides the foundation for your marketing program. (Chapter 8)

The key questions to be answered are: Who are your core customers, and how much do they spend? What is the annual retention rate among your golfers? What are the barriers to increased play? What is the golfer’s perceived value of your course, and what

22 23 is the primary reason to select one course over another? How loyal are customers? What are the critical loyalty drivers that create satisfaction, and what is the financial referral impact of promoters vs. detractors?

Tactical

6. Key Metrics, Yield Management, Financial Modeling and Course Valuation The valuable research data of the National Golf Foundation, Golf Datatech, Club Benchmarking, and Sagacity are contrasted to a facility’s performance to determine opportunities for improvement. Statistics show how course utilization, revPAT (Revenue Per Available Tee Time), revPAR (Revenue per Available Round Sold), EBITDA (Revenue before interest, taxes, deprecation and amortization), technology ROI (Return on Investment), cost per round, staffing levels, capital budgets, and deferred expenditures compare to those of local and regional courses. (Chapter 9)

The key questions to be answered are: Have accurate financial models been developed that support proactive decision-making? What debt service can the golf courses cover? Is there a gap between the potential fees charged and the clientele’s disposable income base?

7. Technology—The Foundation A business analyzed on the aggregation of data is dependent upon having an integrated technology solution, properly installed, and fully utilized by the staff. Ascertaining if the tee sheet integrates into the POS system, the size of the email database, the efficacy of the website, whether proactive email marketing is occurring appropriately, and the extent of the adoption of social media are accurate predictors as to the successful implementation of technology.

Unfortunately, in the history of man, there may never have been more money invested, with such a small return, as there has been in the acquisition of golf management systems. (Chapter 10)

Fortunately, the seven-step formula outlined in this book creates a tapestry of sound principles and common-sense solutions for the golf course operator.

Templates to Shortcut Your Path to Success

This book, unlike many, is designed as a “workbook” to facilitate a golf course owner creating a winning playbook to ensure the successful financial operation of their facility. If one were to hire a consulting firm to help you craft astrategic plan, you are looking at $20,000 – $75,000. We think that is a waste of precious capital.

23 Your investment should not exceed $1,250, using the insights and perspective in this self-help workbook.

To that end, we have made available to the purchaser of this tome, at highly discounted rates, the templates at jjkeegan.com (click here):1

By applying a set of heuristic models in combination with master guides, a course management team can quickly and effectively create a winning strategic business plan.

It seems intuitively obvious, but understanding whether the location of your golf course provides any reasonable hope of success is the starting point for the creation of any business plan.

Do You Have Any Chance?

We conducted a comprehensive study in 2016, based on extensive field research examining 48 components of the more than 14,500 golf facilities in the United States to determine the annual revenue potential of a golf course.

The criteria considered were as follows:

Our firm ran more than 1.7 million calculations because understanding the unique market in which a golf course operates (the underlying demographics of its customers) is fundamental to maximizing its financial potential.

1 https://jjkeegan.com/winninggameplan2020/

24 25 To the superficial observer, the benchmark that more courses have closed than opened during the past 15 years serves as a meaningful indicator of the macroeconomic health of the golf industry. Still, that general statistic provides little guidance for the opportunity that a single facility may have. Two benchmarks provide a far more prescient view of the financial potential for a golf course: the number of golf courses whose annual revenues are less than $1,000,000 and the number of golfers per 18 holes within 10 miles. Shown here are those benchmarks that reveal the financial weakness of golf courses in the United States:

It is rather grim that 35.37% of the golf courses in the U.S. have residents within 10 miles of their facility that spend less than $1 million per 18 holes on golf. Further analysis shows that 50% of golf courses also have less than $1 million in revenue spent by residents who live within 10 miles of the golf course.

The fact that 43.75% of golf courses have less than 1,000 golfers per 18 holes living within 10 miles of a facility is alarming and supports the National Golf Foundation projection that between 750 – 1,000 golf courses are likely to close by 2030.

In these dark numbers, there is an offsetting factor to be considered. For 10% of golf courses — i.e., exclusive private clubs, resorts, and must-play courses on the avid golfer’s bucket list, which attract golfers from hither and yon — they are not dependent upon residents who live within 10 miles of the facility.

25 Some levers influence the probable success of a golf course more than others, as shown below:

Note — as one moves from the inner central to the outer circle, the cost of the green fee will likely rise.

The majority of golf courses have a slope rating between 115-125, 80% of golfers live within 10 miles or 30-minute drive time, the median household income of residents within 10 miles of the facility is between $50,000 and $70,000, and the concentration of golfers is consistent with national norms.

Is the 10-mile radius benchmark for the concentration of golfers and their residential spending an accurate parameter? Not quite. But we believe it is a very reliable indicator for 95% of municipal golf courses, 80% of daily fee golf courses, perhaps 60% of private clubs where the aspirational and status of the club is a draw, and less than 40% of resorts that are dependent upon tourists for their revenue.

Further bumps in the green fee are possible with a golf course that provides all bent grass, multiple layers of rough, an extensive driving range and short-game area. Golf courses benefit even further in their pricing capability when they offer majestic views or have hosted national and state golf championships.

But in an industry that is lacking in substantial demographic indicators, these two guidelines of residential spending and the concentration of golfers near a facility serve as a first filter on the probable success of a golf course.

26 27 Rank and File

Testing the research that location is a highly accurate predictor of a golf course’s potential for 80% of golf courses, we rank-ordered the golf courses from 1 to 15,214, which is the number of golf facilities that existed in 2016. It was no surprise that the golf courses which have the highest potential are located within the major metropolitan areas of the United States, as shown below:

Are these municipal golf courses likely realizing the gross income reflected in the chart above? No chance. Why not? The calculation was measuring the total spending per 18 holes within a 10-mile radius. Private clubs, of which there are a plethora in the major metropolitan areas across the United States, generate nearly five times that of a municipal golf course. There is one statistic that reflects the potential of these courses: the number of golfers per 18 holes. Compared to a national average of 1,711 or 2,268 within the Top 100 core- based statistical areas, demand vastly exceeds supply in the markets identified above. Does it mean each of these golf courses listed is financially thriving? The answer is they should be if course conditions, customer service and the rates charged are consistent with the experience desired by the customer. If they are struggling, those factors, and not demographics, would be the source of their woes. The other side of the coin reveals a grimmer story. Presented below are the 20 golf courses in the United States, based on their location, that have the most significant challenge to achieving fiscal sustainability.

27 Will all those golf courses fail? The critical criteria for their success is attracting sufficient golfers beyond the 10-mile radius of their facility.

But these courses also provide further insights via the “Top 4 Rating” as to the potential for success. You will note that each golf course above has a negative rating.

What does that mean for the potential of a golf course?

The MOSAIC Profile

How many Starbucks stores are within a 10-mile radius of your golf course? If the answer is zero, our belief is your golf course might be financially challenged unless you are a destination resort.

In the numerous geographic local market studies performed for clients throughout the U.S., we have observed the number of Starbucks stores located within 10 miles is an accurate predictor of prosperity for a golf course. These include places like south of the I-20 and inside of the I-285 loop in Atlanta, GA., or even in a rural area like Morganton, NC. There are no Starbucks in those locations, and we usually find that the golf courses are low-end, entry-level facilities where generating enough revenue to fund capital improvements is a challenge.

Starbucks and most other retail companies select locations based on the attitudinal behavior of consumers within a defined geographic radius. Known as the MOSAIC profile, Experian (an Irish-domiciled multinational consumer credit reporting company) classifies all individuals within ten designated groups, as shown below:

28 29 The MOSAIC Global profile assigns individuals to one of ten categories: career and family, bourgeois prosperity, sophisticated singles, comfortable retirement, hard- working blue-collar, routine service workers, low-income elders, metropolitan strugglers, postindustrial survivors and rural inheritance.

Within the United States, the population is divided into ten categories, as shown below:

Using highly localized statistics and the simple proposition that golfers share comparable attitudinal behaviors, we have completed extensive research and field-testing on the correlation between the MOSAIC profile of residents and the slope rating as to the type of golf experience the facility should provide.

29 Golfers are principally sophisticated singles, bourgeois prosperity, career and family, and comfortable retired. Golfers are not, by in large, metropolitan strugglers, low-income elders, etc. We calculate the number of sophisticated singles, bourgeois prosperity, career and family, and comfortable retirement within 10 miles of the course, contrasted to the U.S. population.

This calculation determines the “Top 4” rating as referred to above. To illustrate, the MOSAIC Profile of Pelican Hills Golf Course in Irvine, CA., is higher than 40%, the same rating we find for the north side of Chicago. Conversely, the MOSAIC profile on the southwest side of San Antonio is a negative 30%. Shown below is the correlation between the MOSAIC profile index and the ideal slope rating for a golf course:

To illustrate, if the location of your golf course is in a neighborhood where the MOSAIC profile index exceeds 30% of the general U.S. population, the residents are far more likely to have the income and leisure time to be attracted to golf during their lives, and to have become accomplished at the game. Thus, they will be looking for a more challenging golf experience, i.e., a higher slope rating. Hence, private clubs and high-end daily fee golf courses are more likely to flourish. Conversely, if the residents near the golf course are routine service workers or hard- working blue-collar, it is more than likely that they haven’t had the life experiences that would facilitate their becoming accomplished golfers. Therefore, a golf course that has a lower slope rating would likely be more ideal for them. While isolated exceptions to this “guideline” can be found, as a general rule, it serves as the first benchmark to measure a golf course’s potential. It may sound complicated, but we’ve based this conclusion on extensive research that we have conducted, and leading golf managers have confirmed these theories.

30 31 The Predictive Index

To help a golf course management team quickly assess if their facility is consistent with the attitudinal behavior of the residents in their competitive market, we developed the Predictive Index™ that details the correlation of the MOSAIC Profile and the slope rating, as presented here:

As with all research, there are caveats. The chart presumes the golfer is playing from the back tees. Because distance comprises 90% of the slope rating, a golf course would be well-served to encourage golfers to play more forward tees. One of the more straightforward answers for golf courses that are too difficult for residents in the immediate vicinity is to renovate their golf course, making it more aligned with the preferences of local golfers. Also note that if a golf course’s score is between 0 – 2, it does not preclude it from financial success. The golf course team merely needs to import golfers from beyond the 10-mile radius. Checkpoint

The purpose of this book is to help the golf course owner and management team generate the highest return on investment from their capital. As an envisioning strategist, we are also reality mentors. If the golf course has residents who spend less than $1 million per 18 holes within a 10-mile area radius, and there are less than 1,000 golfers per 18 holes within a 10-mile

31 radius, the facility’s greatest asset, particularly in metropolitan areas, is the value of the raw land.

If you are a daily fee golf course that doesn’t meet these criteria, however, determining the highest and best use of the land would be prudent. The caveat is that by being an exclusive private club, resort, or a facility that is on the avid golfer’s bucket list, the course may have the opportunity for financial success based on the experience created and the associated higher fees charged.

If you are a municipality, it would be wise to have the City Council quantify the intangible value of open green space. The estimated annual costs of maintaining 150 acres of open park space, i.e., baseball, football or soccer fields, tennis courts, walking paths, picnic area, is $100,000. To the extent that the net loss from the golf course is less than $100,000, its continued operation may be financially advantageous. Otherwise, when the ongoing capital requirements are considered, finding alternatives for the golf course land may be prudent.

Below is a diagram that outlines your options:

Finally, ensure that the slope rating of your golf course is consistent with the attitudinal behavior of your golfer in your competitive market.

Concluding Thought “A goal without a plan is just a wish.” — Antoine de Saint-Exupéry

32 PB Chapter 2 – Moral Algebra

“If you don’t know where you are going, you might wind up someplace else.” — Yogi Berra

The Spider and the Fly

Golf organizationally is a curious industry. Unlike the National Football League, the National Basketball Association, Major League Baseball or the National Hockey League, golf has no commissioner who oversees the industry for the collective benefit of the owners. Golf also has no franchise where the owners vote on expansion.

As a result, golf has morphed into a collection of different associations, all designed to promote the game of golf, mainly through education and management of the personnel operating golf courses.

33 Beyond the above groups, the invisible hands of the United States Golf Association, the R&A, the PGA Tour and the LPGA Tour, and manufacturers of golf equipment, merchandise, gas carts, and turf equipment have a significant presence in influencing the success of a golf course. It is easy to get distracted from the din of the crowd.

The expression, “you have two ears and one mouth” and that they should be used in that proportion, serves one well in owning and operating a golf course. One’s primary focus should be on your customer.

Who is the Customer?

Without a customer, there is no business. Of a population of 330 million in the United States, 24.3 million play golf. The average golfer players 18.2 rounds annually, is 44.6 years of age and has a household income of $101,671. What is incredibly impressive is the average household income of a golfer compared to the median $63,708 of the U.S. citizen and an average household income of $86,535.1

As one delves into the data, there are some very surprising anomalies. Forty percent of the rounds played occur on 20% of the courses in the U.S. – principally in the East, North Central and South Atlantic Regions.

Concerning that surprising fact, look at the distribution of the U.S. population, according to a January 2020 “Tactician Detail Demographics Report,” and differentiated from the distribution of the golfers by age, as shown here.

Age Golfer Participation U.S. Population Variance <17 10.10% 22.34% -12.24% 18 - 29 15.70% 16.46% -0.76% 30 - 39 18.50% 13.40% 5.10% 40 - 49 14.30% 12.30% 2.00% 50 - 59 15.70% 13.00% 2.70% 60 - 69 15.10% 11.50% 3.60% >70 10.60% 11.00% -0.40% 100.00% 100.00% 0.00%

Here is a riddle. If golf participation under 17 years of age is at 12.24% below the national age distribution, and their involvement in the mid-2010s is twice that in the early 1990s, as shown here, what does that forecast for the long-term financial health of golf? 1 Tactician, “Detailed Demographic Report,” January 9, 2020, page 3.

34 35 The chart above highlights the continuing concern regarding the long-term future of golf. While rounds played by those over 65 are up over 20%, in all other age categories, rounds have fallen during the past five years. Rounds are down 5% among players between 18-34, 19% between the ages of 35-49, and 9% amongst those golfers 50-64.

A survey was conducted in the Midwest in December 2019 about why millennials play golf versus other generations. It gives a glimpse of what the future may hold and revealed the following insights:

35 The survey also provided perspective on what was essential to attract millennials to the game vs. other generations, as shown here:

We are always amazed at the reliability of insights provided by surveys of golfers. They consistently can identify the best course layouts, cite areas that require attention, and more.

In the chart above, we were surprised that the pace of play was ranked more relevant to other generations than to the millennials. The offset may be that for millennials, escapism and getting away is why they love golf, which is the antithesis to a quick pace of play.

In the United States, only 16% of the 24.3 million golfers have a handicap. I believe this is an indication that most golfers see the game as recreational and social, versus a competitive venue.2

Regardless, what kind of golf course and experience do you think the millennials, Gen Y and Gen Z will seek? Understanding the answer to that question will determine one’s future success in the golf business.

2 https://www.linksmagazine.com/5-changes-to-know-for-golfs-new-handicapping-system/?utm_ source=newsletter&utm_medium=email&utm_campaign=insider01.10.20

36 37 Competition – What is Your Niche?

Before speculating on the ideal golf course experience for the future, what is available today?

Every golf course is unique. It is one of the beauties of the game — a uniqueness that provides leveraging an opening to generate an economically viable business. Annually, the typical golfer plays on eight different golf courses.

The “standard” golf course has 18 tees, 18 fairways, and 18 greens. How can you justify the difference between a $36 green fee to play a municipal course and a six-figure non- refundable deposit at a private club nearby?

The answer is simple. The experience received establishes the price. Pounding the pellet with yellow floating golf balls into a slime-covered filthy pond off rubber mats is a different experience than hitting Titleist practice balls on the range next to members at their private clubs that have hosted numerous championships.

Golf is a lifestyle. We seek to affiliate with people with whom we are comfortable. Family, educational backgrounds, our professions, and life experiences define who we are. Though the proper goal is to be of one people, anthropologist Montague Francis Ashley-Montagu stated, “Equality is an ethical and not a biological principle.”

If we look at major cities, we usually find neighborhoods that represent pockets of ethnicity or religious orientation. While we idealistically, philosophically, and properly desire to be one with everyone, that journey of life finds us socializing with those with whom we have common interests.

Golf, at its base element, is a social venue for entertainment, and it attracts people of similar life experiences to a facility.

Who is golf’s competition?

At its core, any activity that provides entertainment and leisure is a competitor of a golf course, be it engaging in other recreational activities to spectator sports, theme parks, and movies. The options for the consumer are numerous.

Within the golf industry, while each course layout is different. The experience can also vary widely depending on if the facility is a military, municipal, daily-fee, private, or resort golf course. Shown below is the distribution of these options:

37 There are several noteworthy trends. Since 2006, there have been more course closures than openings.

Private facilities over the past decade have decreased by about 10%, offset by a comparable increase in municipal golf courses. An interesting trivia fact is that there were more private clubs in the United States during the depression in the 1930s than there are today. In 1950, private clubs comprised 62% of the golf courses in the United States.

Municipalities are likely purchasers of a golf course, particularly if a real estate development surrounds it.

Why? Speculation is a golf course adds 20% to the real estate value of a home. Should a golf course close, with the associated decrease in the property values of nearby real estate, the loss in property taxes for a municipality may exceed the net operating loss that the golf course is incurring. Additionally, a municipality can invest in the open space to maintain and improve the quality of life for residents. Thus, it is a prudent financial decision for a municipality to purchase a failing golf course.

Access to public golf has remained steady at 75% for years, with 79% of golf rounds played on public courses. We find it interesting that 26.5% of facilities are merely nine holes, and 22% of golf courses are associated with real estate development.

While there are many types of facilities, the style of management within the golf industry is consistent. In essence, the vast majority are slow to take advantage of strategies that can grow the game, such as technology and social media, and evolving culture trends within the society.

38 39 In 1991, Geoffrey Moore wrote an epic business book titled, “Crossing the Chasm – Marketing and Selling High-Tech Products to Mainstream Customers.” He outlined what he believed was the adoption life cycle of products, as shown here:

We have humorously added in the chart above what we believe to be the distribution of management styles within the golf course industry. This industry is mostly stagnant in embracing new concepts and evolving quickly, based on the social makeup of its customers.

There is a reason. In an industry founded on traditional values that attract a conservative philosophical client, incremental vs. exponential changes protect the status quo of keeping the entry barriers high to new golfers introduced to the game. One needs to look no further than the dress codes that permeate the industry to confirm its narrow market appeal.

There is another more fundamental reason why the golf course industry is resistant to change. From 2003 to 2017, the participation rate in golf has fallen 30%, and the number of golfers has declined by 22%.3 Change requires the commitment of resources: capital and time. And this is for an industry that, at best, is stable.

Capitalism is a system of creative destruction. What does this mean to the ownership and management of a golf course?

39 Defining Your Vision

The first question that a golf course owner and management team should be asking themselves is, what level of experience can the facility offer? It is platinum, gold, silver, bronze, or steel?

To help determine that, look at Maslow’s Hierarchy of Needs, a theory put forward by the American psychologist Abraham Maslow. It categorizes the needs that motivate people in the following order: physiological, safety, social belonging, esteem, and self- actualization, as shown below.

Ask yourself, for those whose primary concerns are with physiological and safety needs, are they likely golfers? Probably not.

But for a person looking to the game to fulfill their need for social belonging, golf is a perfect venue, meaning low-end daily fee or municipal courses.

For those who are looking to golf as a way to raise their esteem, as well as gain recognition and status, they will look toward silver or gold courses, which would be the more expensive daily fee courses or the low to mid-tier private clubs. Those who seek to golf to define who they are will be looking toward the platinum courses, the exclusive private clubs.

A course operator needs to be able to identify which level it aims to be, and then have the facilities to meet those needs. The following chart shows a quick way to determine the experience a member may expect, which reflects the qualitative aspects of a facility:

40 41 For a private club, the criteria for differentiation may include many factors, such as national rankings, the architect, championships hosted, slope rating, course conditioning, type of carts (electric, gas, GPS), number of amenities (tees, towels, water, fruit, etc.), customer touchpoints from arrival to departure, cell phone policy, clubhouse dress code (jeans, collared shirts, ladies pants, etc.), smoking areas, supplemental activities, business allowed in clubhouse, computers, tipping policy, and gifts to employees from members.

Another filter to determine the niche in which the golf course may fit is looking at the quantitative analysis of its financial performance. The chart below is from the 2016 edition of PGA PerformanceTrak:

41 The Infinite Game

Understanding the experience that your customer is seeking is essential for guiding the successful operation of a golf course. There is no business that is all things to all people.

We strongly believe that every golf course is not ideal for every type of golfer.

The creation of a strategic business plan is a finite event. The ownership and management of a golf course is an infinite event.

Simon Sinek in writing the “The Infinite Game” (click here)4 ponders:

“How do we win a game that has no end? Finite games, like football or chess, have known players, fixed rules, and a clear endpoint. The winners and losers are easily identified. Infinite games, games with no finish line, like business or politics, or life itself, have players who come and go. The rules of an infinite game are changeable, while infinite games have no defined endpoint. There are no winners or losers — only ahead and behind.”

The ownership and management of a golf course fit the definition of an infinite game.

There are annual financial reports, as well as budgets that set goals and objectives, but these are merely interim markers. Profit is a benchmark, but it is not a goal, as there is no finish line for the successful operation of a golf course.

Our culture emphasizes short-term finite thinking: win or lose. Today, as a society, we collectively suffer from short attention spans. The craft of making a farsighted choice is a strangely underappreciated skill.

Viewing the management of a golf course with an infinite mindset, with the importance of creating the proper vision and culture, both of which are esoteric and hard to measure, is a challenge. Instead, individuals are inclined to seek out immediate solutions to uncomfortable problems and prioritize quick wins.

The decisions that ultimately matter rely heavily on instincts and intuition. Because we take time in making them, because they involve complex problems with multiple variables, such decisions are often delayed. We speculate that less than 50% of the golf courses in the United States have developed a strategic plan with 5-, 10- and 15-year goals defined. Even management companies, when assuming operational responsibility for a golf course on a three- to five-year lease, typically only prepare a budget and a marketing plan.

4 https://www.amazon.com/The-Infinite-Game/dp/B07DKHFTB7/ref=sr_1_2?hvadid=77927961930499&h- vbmt=be&hvdev=c&hvqmt=e&keywords=infinite+game+simon+sinek&qid=1578507373&sr=8-2

42 43 What is required in 2021 in the golf business is to invoke a massive disruption to the historical business model to align itself with the changing values and culture of our society.

Why

The thing that keeps the golf course “in the game” is a belief in the vision for it, as expressed in the mission statement of the facility.

Regardless of what the future may hold, the commitment to a vision can define the future, minimizing our risk to the blind spots in our decision-making and the cone of uncertainty. When we make hard decisions, we are making predictions about the future. And unfortunately, uncertainty cannot be analyzed out of existence.

A mental map for the future starts with the mission statement, which serves as the compass to guide the direction of organization. The mission statement should be aspirational rather than product-based. Products deteriorate, but aspirations have no shelf life.

The foundation for every successful business is to attract and retain loyal customers. In the golf industry, it is essential that each facility creates a vision that supports its brand message and celebrates the distinctiveness of the golfer’s experience.

We came to this belief based on watching a TED Talk by Simon Sinek (click here)5. In the video, Sinek asks, “Why is Apple so innovative year after year after year? Why was Martin Luther King able to lead the civil rights movement when others suffered in the pre-civil rights era and who were also great orators? Why were the Wright Brothers the first to achieve controlled and powered man flight when other teams were more qualified and better funded?”

He described the “Golden Circle: WHY?—HOW?—WHAT?” All companies and organizations on the planet know WHAT they do. They are easily able to describe their products and services. Some companies can explain HOW they are different — their unique selling position. Few companies can clearly articulate WHY.

Sinek concluded that a successful business communicates from the inside out, as illustrated here:

5 http://bit.ly/dcDsbx

43 He postulates that “People don’t buy WHAT you do; they buy WHY you do it.”

How should the “Why” for the golf course be selected: by a small group or a diverse group? Decision-making theory holds that the larger the group that participates in the process, the more accurate the decision will be. The group always benefits from time and perspective. The Strategic Plan

If we then apply the WHY? HOW? and WHAT? tenets to the process of creating a business plan, they align perfectly:

44 45 First, the definitions. “Strategic,” “tactical,” and “operational” are three buzzwords in business lexicon that make most people’s eyes glaze over. Succinctly, they mean the following: • Strategic: culture, vision, history, tradition, and governance. • Tactical: asset management, comprising the facilities (golf course, clubhouse, and other physical entities), finances, and human resources. • Operational: activities (green fees, tournament, merchandise, food and beverage, and range) and management (leadership, staffing and scheduling, marketing, and customer interaction).

In a well-managed operation, every operational decision can be traced up to the tactical plan and then up to the strategic vision. To illustrate, would you expect valet parking at a low-end municipal golf course? Not hardly. Would you expect bottled water, free range access, ball repair tools, and towels at a golf course charging over $200? Very likely.

These tools — strategic vision, tactical planning, and operational execution — blend in relative proportions to create a profitable formula shown here:

45 The governance and management of a golf facility have inherent conflicts shown here:

Who Decides?

Whether it is the board of directors at a private club, the owner of a daily fee facility, or a city council, they all want the facility to be economically self-sustaining without the requirement for capital assessments, borrowing, or investing general fund assets to sustain the facility.

The employees at the facility, ranging from the general manager at a private club to the seasonal, hourly workers, all seek adequate resources to achieve the defined service levels.

The members and golfers usually seek to pay the lowest price to achieve the most significant value from their expenditure. In 30 years of serving the golf course industry, having attended a plethora of board member and golfer meetings, I await the first time when someone says, “For the value, I am receiving, I should be paying a higher fee.” It just hasn’t happened. On the contrary, members and golfers are united in thinking that they are currently paying too much, regardless of the experience they are receiving.

Municipal golf courses make this decision process even more complicated. A government has a fiduciary financial responsibility to 89% of the citizens who don’t play golf. The chart here reflects the added layer of conflict in owning and managing a municipal golf course:

46 47 Thus, while this book will outline the tenets for success, it is fundamental that the conflicting interests be aligned, and the interests of the facility as an enterprise serve as the overriding focus.

How is that achieved? By creating a culture, an identity, a belief system in which the owner, management team and staff share a passion and purpose in believing “this is our time,” in which their legacy will result in leaving the facility more successful than when you arrived.

James Kerr, writing in “Legacy – What the All Blacks Can Teach Us About the Business of Life” (click here),6 writes, “a collection of talented individuals without personal discipline will ultimately and inevitably fail. Character triumphs over talent. Focus on getting the culture right; the results will follow. Organization decline is inevitable unless leaders prepare for change – even when standing at the pinnacle of success.”

When we are visiting a golf course in the company of management or staff, and I see that employees go out of their way to pick up trash, straighten a sign, take a moment to talk with a golfer, I know that I am at a well-run facility.

Kevin Roberts, CEO of Saatchi & Saatchi, talks about 100-day plans:

“First list around 10 needs you need to achieve over the next 100 days. Start each with an Action Verb and use no more than three words. Make sure each action is measurable.”

6 James Kerr, “Legacy – What the All Blacks Can Teach Us About the Business of Life,” pg.7, 10 and 25.

47 Legendary Venture Capitalist John Doerr, who invested $12 million in a start-up named Google, introduced to that team an operating model titled, “Objectives and Key Results.” In the OKR model, “objectives define what a firm seeks to achieve, key results are how those top-priority goals will be attained with specific, measurable actions and within a set time frame.”7 Bono, the Gates Foundation, Intel, and YouTube are featured as entities that utilize this methodology. As the book highlights,8 it all starts by creating the right culture.

Why? Our fundamental drive is based on intrinsic vs. extrinsic motivations. The intrinsic motivation comes from a belief in the Vision and Mission, which defines the overriding purpose of the facility.

As a written document, a strategic plan provides a consensus for the future direction, one that can be measured and evaluated.

Without a defined strategic vision, effective tactical plans cannot be developed. Without tactical plans, efficient operational execution cannot occur. The results of this lack of strategic planning are highly predictive – policies, procedures, and practices become based on the ever-changing whims of the owner, management, staff, or influences created by golfers.

Management and staff, as best they might, will only respond to the latest self-imposed crisis or artificially defined priority. As the saying goes, “Vision without action is a daydream. Action without vision is a nightmare.” Either way, chaos ensues.

The success of the storied golf clubs of the world all has one thing in common: a rigid discipline to adhere to the strategic vision for the club. This same discipline, though it rarely happens, can also be applied to a public golf course. Thus, in crafting this strategic plan, a broad vision of the bold initiatives that must be first established is emphasized.

The centerpieces of a strategic plan are the vision and mission statements that guide all decisions regarding the operation of the facility. A vision statement is the ability to foretell what is going to happen and create a mental image of what we want to happen in the future.

Why does this matter? Research shows “that employees who find their company’s vision meaningful have engagement levels of 68%, which is 18 points above average. More engaged employees are often more productive, and they are more effective corporate ambassadors in the larger community.”9

7 James Kerr, “Legacy – What the All Blacks Can Teach Us About the Business of Life,” pg.28. 8 John Doerr, “Measure What Matters – How Google, Bono and the Gates Foundation Rock the World with OKRs,” inside cover. 9 https://www.businessnewsdaily.com/3882-vision-statement.html

48 49 An example of a vision statement for a municipal golf course is depicted here:

The strength of the vision statement is that the golf course knows what it represents and, just as importantly, what it does not. By defining its vision, the Club can align its infrastructure, facilities, and labor resources to match the service ideals envisioned.

The connection between the vision statement and operation is captured with the facility’s mission statement, which defines the “highest goals and objectives.” A written mission statement includes not only the facility’s vision and purpose but also the essential services the club provides.

Here is an example of the vision, mission statement, and core values of Florida’s Sawgrass Country Club:

“OUR VISION Securely establish Sawgrass Country Club as the first choice for those seeking the best private club experience in our area through a commitment to enduring excellence.

OUR MISSION A Member-Owned Private Club: Provide an exceptional Sawgrass Experience by combining our oceanfront location with excellent facilities, programs, and services for the enjoyment of our members.

OUR CORE VALUES • To respect fellow members and staff • To be a family-friendly and welcoming membership • To have outstanding facilities, amenities, and services

49 • To keep a balance between quality and value • To be fiscally responsible • To be conscientious about the environment.”10

For a public facility, the World Woods Golf Club in Brooksville, Fla., provides a marvelous experience:

“OUR MISSION Our primary goal at World Woods Golf Club is to provide the greatest experience that our guest ever encountered at a golf facility regarding golf course maintenance, service, professionalism, and overall staff knowledge on the game of golf and thereby to be nominated as the ‘number 1’ golf facility in the state of Florida.

CORE VALUES • CUSTOMER SERVICE: Provide exceptional service through a cheerful, professional, and sincere attitude. • HUMAN RESOURCES: The hiring, training, and retention of our employees will always be of the utmost importance. • SUPERIOR INSTRUCTION: Provide to all who want to improve their abilities with the highest quality instruction in their area of interest. • GOLF COURSE CONDITIONS: Maintain quality golf course conditions which stand out in the minds of our customers, provides a sense of value, and creates pride among our associates.”11

What is intriguing about the World Woods mission statement is that it appears on the home page of their website by clicking “Walk in the Woods” as a lead feature.

The importance of Mission Statements can be seen internationally also. The famed Portmarnock Golf Club in Dublin, Ireland, posts this to their website:

“Portmarnock Golf Club exists to preserve, protect, and maintain the highest standards of Links Golf for the primary benefit of its members and their guests. Through its unique location and evolved tradition Portmarnock Golf Club has established standards of excellence recognized in the universal golf world. It acknowledges its most beautiful asset to be the links golf course and the lands attaching within its boundaries.

Portmarnock Golf Club is committed to providing the resources necessary so that its links characteristics are preserved and developed. No effort shall be spared to secure and protect the integrity of the indigenous grasses and flora, which are the natural foundation of true links golf.

10 https://www.sawgrasscountryclub.com/public/mission-and-vision-statement-1 11 https://www.worldwoods.com/mission-statement/

50 51 Portmarnock Golf Club has a continuing commitment to the flora, fauna, and birdlife with which it shares the estuary. It will continue to act in the role of conservators for this valued and unique ecological heritage.”12 What merely is brilliant, however, is Portmarnock also posts their links restoration and maintenance policy. The excerpts are shown below: Links Restoration and Maintenance Policy

“Portmarnock is widely recognized and acclaimed as one of the finest links courses in the world of golf. This statement confirms the absolute commitment to taking whatever steps prove necessary for the protection of the links and restoration of the links characteristics to the highest possible championship standards. To that end, the following principles will be observed: • Recognized experts of proven competence in the fields of links architecture maintenance and agronomy will be retained to advise and guide the club. • Club members — however knowledgeable they may believe themselves to be will not be allowed to interfere with or impede the advice or instructions given by recognized experts of proven competence, as retained from time to time by the Club. • The architectural features of greens, bunkers, fairways, and tees will be kept under regular review and updated as proves necessary, and as advised by competent experts. • The Bent and Fescue grasses — which are the essence of true links golf will be encouraged at all times. Concurrently, the required steps to discourage Poa Annua and other less acceptable grasses such as Rye will be taken — all under the advice and guidance of competent experts. The grass collection boxes on fairway mowers will be used at all times to discourage Poa Annua. • The rough should be consistent with links characteristics. • Irrigation of the links surfaces will be done to a minimalist policy, in strict accordance with the advice of competent experts retained by the club. • The staff of the club shall be advised of the foregoing Policy Statements, and they shall receive the training necessary for fulfilling their respective duties. • The equipment shall be maintained and used strictly by manufacturer’s recommendations and specifications and used as advised by club’s professional experts and machinery suppliers. • Proper and full records shall be kept concerning usage of all equipment, fertilizers, pesticides, herbicides, chemicals, etc. so that full information for

12 https://www.portmarnockgolfclub.ie/mission-statement

51 decision-makers is constantly available and updated. • Similarly, water usage shall be monitored and recorded. • The amount of play on the links shall be kept under constant review to ensure that undue pressure is not put on the links and its environments. If necessary, rest periods or preferential lies will be adopted from time to time. • Part of the links — up to and including nine holes at a time — may be removed from play for maintenance/restoration purposes — with due regards for timing to reduce impact on play for members. However, proper treatment of the links for maintenance/repair purposes, as advised by experts, must not be impeded.”

Of all these policies, my favorite by far is, “Club members — however knowledgeable they may believe themselves to be will not be allowed to interfere with or impede the advice or instructions given by recognized experts of proven competence, as retained from time to time by the Club.”

It is our opinion that the stronger the culture, the stronger the discipline, and the greater adherence to the vision, mission statement, and the policies of the golf facility, the more successful it is. We would suggest that there is a correlation between the success of the finest private clubs and these tenets were membership is a privilege.

The Achilles heel of public golf, particularly at municipal golf courses, is that the customer often dictates the policy and sets the fees that they are willing to pay. Such is a formula for chaos and financial underperformance.

Do you need a strategic plan? The McMahon Group, a leading golf course industry consulting firm focusing on private clubs, released a survey titled, “Outlook Pulse Survey for 2020.” That study revealed that only “64% of private clubs state they have a written strategic plan developed within the last five years. The larger the club (membership size), the more likely they are to have a strategic plan with 78% of clubs with a membership size over 1,000 having one. The same with clubs with an initiation fee over $50,000, as 72% of this group stated they have one.”13

It is little wonder that most golf facilities drift in a sea without direction, succumbing to the uncontrollable forces.

Concluding Thought

“Knowing is not enough; we must apply. Willing is not enough, and we must do.” — Goethe

13 McMahon Group, “Outlook Pulse Survey for 2020”, page 2.

52 PB Chapter 3 – The Hand Dealt

“No man was ever wise by chance.” — Seneca The Winds of Change

There are many uncontrollable factors in creating a strategic plan.

Quantifying these uncontrollable factors is valuable because the data help to isolate and analyze the extent to which changes in rounds are attributable to uncontrollable influences versus controllable decisions made by owners, boards of directors, senior management, and staff.

Global issues of the game are wonderful to know, but useless if they don’t translate to your local market. The fundamental rule is “know thy market.”

Perhaps two of the most uncontrollable factors are demand vs. supply and weather. These provide the first opportunity to calculate some benchmarks that will provide insights into the historical performance of the golf course and the likelihood of achieving future financial success.

This chapter focuses on the first two steps in the formula, as highlighted below:

53 The demographics of your location is the most crucial piece of strategic information one can have. It is inconceivable to think of buying or owning a golf course without undertaking a geographic market analysis. It is also unthinkable to continue managing a facility without updating your market analysis every five years to capture the evolving demographics and changes in demand vs. supply.

A geographic local market analysis comprises several aspects. First, an understanding of the income, age and ethnicity, demand vs. supply and the slope rating of the golf course all must be aligned to have a golf course produce superlative cash flow as reflected here:

If one undertakes Google searches on the City of Louisville, Kentucky, golf courses, you will see many articles about Mayor Greg Fischer and the Metro Council being “at war” over the proper management of their municipal golf courses. The City of Louisville is losing money on seven of their ten courses.1

The Staircase to Heaven in Golf

During 2019, the Mayor issued Request for Proposals to have the golf courses managed. The administration estimates bidding out operations or closing up to four courses could save more than $500,000 a year. Historically, independent concessionaires operated the golf courses, and the City was responsible for the maintenance, receiving the green fees to offset their expenses, theoretically. The Metro Council’s solution was to raise green fees for 2020 slightly.

In November 2019, the Kentucky Metro Council “voted 24-0 that all golf course contracts for municipal courses must go before Metro Council for approval—taking power away from the mayor.” The Council’s last golf course move was to extend the existing contracts

1 https://clubandresortbusiness.com/cities-weigh-options-to-maintain-struggling-golf-courses/

54 without modification and give head professionals some added flexibility to make courses self-sustainable.2 The goal is to keep golf in Louisville “as close to the same as possible” and continue what the city has enjoyed for the last 100 years, said lead sponsor Councilwoman Cindi Fowler, D-14th District.” However, all of this is a fruitless effort. The City of Louisville has only two options: fund the continuing loss and capital requirements out of the General Fund, or close at least five of their golf courses. An analysis based on demographics within a 10-mile radius of the facility, shown here, reveals that only two of Louisville’s ten golf courses have the potential to be economically viable: Charlie Vettiner and Long Run.

For those where the demographics are adverse, their financial longevity is dependent upon drawing in golfers from beyond the 10-mile radius or superior management, as evidenced by the PGA Professional at Seneca. What about Vettiner and Long Run, are they assured of financial success? Not necessarily. The golfer experience concerning the price will be an essential factor. For Vettiner, the entrance to the club is nearly “hidden” in a housing development between two homes with little signage. For Long Run, it isn’t far from the esteemed Valhalla Country Club and other private clubs, which could bode well for the course. But, unfortunately, the Long Run course and clubhouse conditions are substandard. Long Run is a classic example of municipal golf mismanagement.

Interestingly, two private daily fee courses in the Louisville market conducted an executive strategic review under the tutelage of Rick Lucas, PGA, and Director of the

2 https://clubandresortbusiness.com/louisville-metro-council-demands-final-say-over-golf-course-contracts/

55 Clemson University Professional Golf Management Program in coordination with William Dillon, PGA, and Director of the University of Maryland Eastern Shore Program. Their students were applying the lessons contained in this book. They concluded that both courses were losing substantial sums of money with no answers to correct immediately obvious, based on their location, outstanding debt, and the price point.

Can a demographic analysis lead one astray into concluding a golf course has a challenging future when its potential is strong? Comparing the demographics of all residents to that of the golfers can defeat the argument from the nattering nabobs that the green fee rates be kept low to accommodate the residents. The chart below shows a comparison completed for Decatur, IL, in December 2019:

The green fee in Decatur is $28.50 and nets 52% of the rack rate. Their cash flow loss for the last two fiscal years: near or above $200,000. The answers are obvious. They need to raise the green fees, eliminate forced carries and widen the fairways to create a golf experience desired by the local golfer. The decisions are not forthcoming, and changes are not being made.

Buy or Sell?

Beyond looking at income, age, and ethnicity, undertaking a demand vs. supply analysis can prove enlightening. Shown below is the demand analysis conducted for the City of Chattanooga in early 2019.

56 Note: 100 CBSA represents the Top 100 core based statistical areas in the U.S. Which course do you think is performing worst? It’s Moccasin Bend. Not only does supply exceed demand, and the green fee per round is the lowest, but the entrance to the golf course is through a deteriorating industrial area. Demand vs. supply is an excellent indicator of a course’s potential. For Mississippi National in the city of Red Wing, MN, there are only 658 golfers per 18 holes. For Old Works in Anaconda, MT, there are only 370 golfers per 18 holes. Old Works, a fabulous Jack Nicklaus’ Signature Golf Course, is built on a Superfund ore cleanup site and is dependent on summer tourists to be sustainable. Logically, 50% of the golf courses in the country would have supply exceeding demand, and 50% have demand exceeding supply. One such location is the City of San Antonio where the Alamo City Golf Trail, under the sage guidance of Andrew Peterson, PGA, manages eight golf courses that possess the following characteristics:

57 Is the Alamo City Golf Trail achieving, at each of the golf courses, the revenue spent per resident within 10 miles per 18 holes (green fees, carts, merchandise, food and beverage and other) as indicated in the chart?

They aren’t. Why not? Private clubs and resorts generate revenue far over municipalities and, as a result, drain the dollars available for spending. Additionally, a city council can artificially cap the rates below the fair market value of the experience.

The importance is understanding that demographics only serve as one component to the strategic analysis of a golf course, and not the sole criteria to its success, as illustrated by the Alamo City Trail. One would think that Riverside would be the worst performing golf course. But that’s not the case. It is one of the best performers because the slope rating of the golf course is 113, which is ideal for the local golfer.

Conversely, Mission Del Logo, despite having over 4,041 golfers per 18 holes, is far and away the worst performing course. Why? The slope rating is 134, matched against a MOSAIC Profile of negative 30%. The course is much too hard for the local market, course conditions are challenged, and its location on the southwest side of San Antonio is too remote to attract the avid and affluent golfer who lives on the north side of the city.

Notwithstanding the constraints, the Alamo City Golf Trail generates $220,201 per 18 holes in cash flow, compared to a negative $71,898 for every other municipality in the state of Texas.

What the demographics analysis does do, like charts at a doctor’s office, is to provide valuable clues to direct further substantive analysis.

As a reader, you might ask why only the demographics for municipal golf courses are illustrated? The Freedom of Information Act allows researchers to secure information deemed to be in the public domain. To share information from clients that are daily fee owners and private clubs would compromise the confidentiality provision of one’s agreements and perhaps place them at a competitive disadvantage.

Golf is an Outdoor Sport — Duh!

The last uncontrollable factor to be examined is the dramatic impact of weather on a golf operation.

Mother Nature is fickle — she gives, and she takes. Hot, cold, snow, blizzards, avalanches, rain, sleet, thunderstorms, lightning, hurricanes, tornadoes, drought, wind, and who knew `weather came in so many flavors’?

Trying to operate a business that is outdoors efficiently can be exasperating. Rain minimizes water costs, but sunny skies and warm days boost business. The weather has

58 a material impact on the financial performance of a golf course.

The power of just one-degree difference in temperature or one inch of rain can significantly influence the golf retail industry. Did you realize the following effects of weather change?

• 1° colder = 1% decrease in rounds • 1° hotter = 1.3% increase in beer or soft drink sales • 1° colder = 9% increase in girls outerwear sales • 1° hotter = 10% increase in sun care products sales • 1° colder = 1.4% increase in coffee consumption • 1° hotter = 24% increase in air conditioner sales

Perhaps no activity is more impacted by the weather than golf. What if you knew exactly what the weather would be like a year in advance?

How much would you pay to control the weather? If you only knew:

• How many days will it rain in the next two weeks? • Should I start the expensive fertilizer applications? • Will it be too hot for people to golf? • When should I choose to run promotions? • How many employees will I need to schedule? • Will Mother Nature take care of my course watering needs? • Will the weather be okay for the upcoming tournaments and outings? • Do we need a back-up plan for the scheduled outdoor wedding this weekend? • How has weather impacted my sales in the past?

There are several reliable weather forecasting companies. Among them is Weather Trends. They answer the questions above with their golf rounds played reports, which their exclusive statistical forecasting model to deliver highly accurate rounds-played forecasts up to a year out.

Based in Bethlehem, PA, in the Lehigh Valley, Weather Trends’ proprietary forecasting technology provides clients a year-ahead weather forecast with business strategy recommendations by market, by day/week, for 720,000 grid points across the globe.

Fortune 100 companies in 23 countries believe in the power of weather changes and of forecasting those changes. They utilize Weather Trends to help them generate a return on investments from $10 million to $230 million annually. Clients include 3M, Ben & Jerry’s, Black & Decker, Coca-Cola, Hershey’s, J&J, Target, and Walmart.

59 All of these companies utilize Weather Trends’ on-demand mapping, 20-year trends, custom alerts, sales and market planning, analytics, and sales forecasting to help them better understand how weather influences their business. This information allows them to plan product manufacturing and shipment accordingly. For example, should snow blowers be put on sale in Colorado in late September or early November? Should spring flowers be available for purchase in March, April or May?

Regarding the golf industry, Weather Trends “Weather Impact Analysis” ties each of golf’s 14,613 facilities in the United States to more than 1,600 local weather stations and provides vital facility measures on weather variance, including season days, golf playable hours, equivalent golf playable days and capacity rounds in total, by month, and by day of week. This analysis is segregated into 45 regions defined by latitude, elevation and maritime influence.

Among other things, we learn from these studies that nearly 98% of all golf is played between a temperature range of 43 and 95 degrees. Industry pundits have labeled some anomalies about the weather as the “bear/squirrel syndrome.” Golfers are more likely to play in adverse conditions in the spring, after their golf hibernation than in the fall when college and professional football dominate the sports arena. Often, a day in the spring will generate 40% more rounds than a day with the same weather in the fall.

But, as you read this, if you are like most, you have grave doubts about the ability of any company to engage in accurate long-range weather forecasting. So did the National Golf Foundation.

In 2013, the National Golf Foundation put Weather Trends to the test and had them forecast eight months for the St. Louis area. Shown here are the results:

60 The blue and red lines represented their forecast on the temperature change from the preceding year. The jagged black lines represent actual temperature changes from the prior year. The results are amazingly accurate, especially considering that once the forecast is made, 11 months in advance, it does not change.

How do they do it? Using proprietary algorithms and millions of lines of code to generate forecasts, Weather Trends provides 1- to 14-day and 3-, 6-, 9- and 11-month global weather forecasts by the geographic market or zip code. Traditional, physics-based meteorology is only any good a few hours or days out; hence, that’s why most of us have been skeptical about weather forecasting. Because we live day-to-day, we develop an extremely short-term focus and lose sight of long-term trends. Weather varies by locale greatly each year, as reflected here:

Weather repeats itself on an annual basis less than 15% of the time. As shown above, no two Marches have been comparable across the United States for the past 12 years.

What relevance do these tools have for the golf course industry?

It’s enormous, and the cost of these services can range from complimentary (for the basic weather alert service) to $2,500 annually per facility (for a comprehensive set of historical analysis and forecasting tools).

For $450 per year, you can license:3

• Two Locations [year-ahead forecast] • Golf Rounds-Played Reports

3 https://www.weathertrends360.com/Plans

61 • 14-Day U.S. Snow Forecast Report • Short-Range Global Mapping Tools • Custom Weather Alerting Tools • Seasonal Hurricane Outlooks

This fee seems to be a nominal expense considering the potential of having some control over the effects of weather on your golf course. With margins tight and competition high, public courses and private clubs can’t afford to be caught unprepared for the weather. With Weather Trends’ golf rounds-played intelligence, you’ll know far in advance about the benefits of a warm/dry winter, the big negatives of a cold/wet spring, or a drought’s impact on maintaining your greens.

Weather Trends has crafted a set of tools specifically for the golf industry that includes the historical reports shown in the figure below:

The analysis of the weather, which has not been embraced by industry management, is a valuable index to measure the efficiency of management at a golf course. To illustrate, if a golf course has typically 260 playable days per year but in a given season has 280 days playable days, rounds should be up by 7.5%. Applaud management if rounds are up more than 10%. If rounds are not up by at least 3%, the quality of management comes under scrutiny.

Similarly, if rounds are down 15%, as shown below from Red Wing, MN, from 2017 to 2018, management should be celebrated for maintaining consistent revenues:

62 Playable Days — An Important Number

At JJ Keegan+, we conducted a survey to determine how many golf courses tracked playable days. While 68% indicated they did track playable days, how that day was measured varied widely. Answers ranged from “above 40 degrees,” “above 50 degrees” and “above 60 degrees,” to “any rounds played, April 1 to November 30, regardless of weather,” “course is open,” “weather permitting,” “75% of tee sheet filled,” “no frost or rain” and “no severe weather.”

It is somewhat amusing how unscientific were the criteria used by those courses that tracked playable days. Examples of playable golf days, based on the more formal definition, are as follows:

63 One of the best applications for playable golf days is using that number to determine the fair market value of season passes. Golf course firms estimate that a season pass golfer will play about 30% of playable days and are to be accorded a 30% discount. Knowing the playable days’ number will help establish the fair market value vs. using benchmarks of what competitors are charging or the fees posted in prior years.

Monthly playable days reporting has excellent applicability for golf, also. For example, when should the course open for the season? When should it close? Presented here is a chart for Toms River, NJ:

In undertaking a strategic review for the Toms River Township, the golf and agronomic staff commented that based on a Point of Sales report, the only golfers who played between Thanksgiving and Easter were the season pass holders, so no revenue was generated. Despite that, the maintenance team worked on maintaining the course for play, i.e., changing pins, raking bunkers, etc.; and essential capital projects, i.e., trimming trees, rebuilding bunkers, and providing preventive care for creek and water hazards, were unfortunately not addressed, as should have been done in the offseason.

The empirical data in the chart led Township leadership to opt to reduce the golf course playing season from 363 days (closed on Thanksgiving and Christmas) to 280 days, with likely playable days of 253 shown above.

64 Weather is also an important statistic in calculating the annual potential capacity of rounds so that course utilization can be more accurately determined and benchmarked against industry standards, as shown here:

Rather than speculating at a course’s capacity and utilization, Weather Trends provides the definitive metrics on which a golf course can measure the effectiveness of its management compared to the number of playable days.

The Crystal Ball

One of our favorite tools that are used by very few in the golf industry is the 11-month weather forecasting tool. The one shown here is for the cities of Denver, Houston, Los Angeles, and New York, and it was prepared in January 2020 to demonstrate Weather Trends forecasting ability.

65 Key: Dark Blue: much colder: <= 5 degrees colder Light Blue: slightly colder: -1 to 5 degrees colder Dark Green: <= 200% greater precipitation Grey: same as last year

The 2020 season for Denver looks to begin around April 7 and come to a close around Thanksgiving. However, the precipitation (dark green boxes) in the coming year seems to be a lot more than in 2019. The forecast for New York City looks comparable, while Los Angeles should have a banner year with mild temperatures and rain only during their regular “rainy” seasons.

Leveraging Weather to Your Advantage

So, if you had confidence that long-range weather forecasting was accurate, and you knew the forecast for next year, how would you change your current plans? Here are a few ideas: • Knowing season start timing on a by-city basis will improve revenue forecasting and enhance the strategic planning process. • Production profiles for clubs, balls, apparel, and other golf-related merchandise could be adjusted to manage a possible overstock scenario better and soften the need for dramatic markdowns.

66 • Inventory allocation could be adjusted to place the most product in areas of the country with the most favorable weather. • Exercise caution offering off-season rates in the spring, thinking that the revenue is recovered in the summer. • Outings and ventse could be scheduled for days on which the probability of rain is low. • Advertisements in local media could be placed for weekends during which weather is to be favorable. • If a superintendent knew that in 48 hours it was going to rain 1¼ inches, using 400,000 gallons of water on the golf course could be avoided, saving as much as $600 in water expenses. • A superintendent could defer a fertilizer application costing upwards of $10,000 with the knowledge that it would likely be washed away by heavy rains.

If your golf course is located within the United States, and you elect to download the Geographic Market Analysis template, we will be so notified and provide for you the key demographics elements within 48 hours. That data will also allow you to determine if your slope rating and the MOSAIC profile are in alignment.

Lastly, if you decide to acquire from Weather Trends (click here)4 their reporting service for $450, you will obtain the ability to ascertain if you are “beating” the weather with the management of the facility.

Exercises

The exercises are summarized below and can be downloaded at jjkeegan.com:5

Step Description File Level of Explanation Retail Winning Format Difficulty Price Playbook Pricing STRATEGIC TEMPLATES 0 Pre-Test Adobe Entry These pre-test templates ask 40 $10 Free Survey questions to ascertain the level of the respondent’s knowledge of the business of golf. We compare your answers to a national survey.

4 https://www.weathertrends360.com/ 5 https://jjkeegan.com/winninggameplan2020/

67 Step Description File Level of Explanation Retail Winning Format Difficulty Price Playbook Pricing 0 National Web- Entry A study completed in 2018 $10 Free Survey based presents the results of your Strategic survey peers. You are likely far ahead Planning of them. Results 1 Vision – Excel Entry Promises versus performance. $10 Free Private Golf This template helps a private Course club determine if its brand promise is at the platinum (5-star), gold (4-star), silver (3-star), bronze (2-star), or steel (1-star) level. 1 Vision – Public Excel Entry Promises versus performance. $10 Free Golf Course This template helps a public course (daily fee, municipal, or resort) determine if its brand promise is at the platinum (5- star), gold (4-star), silver (3-star, bronze (2-star) or steel (1-star) level. 1 A Geographic Excel Intermediate Demographic profile (age, $1,250 $500 Local Market income, ethnicity & population Analysis density) contrasts your course with the golf courses within 30 miles of yours to determine strategic potential. 1 Slope Rating Excel Easy Assess whether the MOSAIC $50 Free vs. MOSAIC profile and the slope rating of Profile your course is in balance to Correlation attract and retain golfers within a 10-mile radius 2 Revenue Excel Intermediate Is your facility under- or over- $750 $250 Performance performing in relationship to vs. Weather the number of golf playable Playable Days days? This template will help you measure that benchmark.

Concluding Thought “A single conversation across a table with a wise man is worth a month’s study of books.” — Chinese Proverb

68 Chapter 4 – The Farm “It isn’t the mountains ahead to climb that wear you out; it’s the pebble in your shoe.” — Muhammad Ali

Where to Now?

What is the most crucial asset a golf facility has? The Course. Who is the essential employee at a course? The Superintendent and his crew. Not the general manager, the Director of Golf, or the Food and Beverage Manager. Sorry.

Without focused attention on maintaining the playing field, golfers would not arrive. Once we understand the demographics, we can build, construct, maintain, and renovate a golf course to create the desired experience to our targeted customer base. But it starts with the course; otherwise, it would be merely one of the other 1,453,950 restaurants in the U.S.1

This chapter focus on the third step of creating a strategic plan by understanding the importance of matching the on-course experience created to that desired by the golfer.

How Many Are There Worldwide?

69 Since 2015, the R&A publishes biennially, “Golf Around the World,” which is made possible by research conducted by the National Golf Foundation.2

Do you see the apparent inconsistency in the chart?

Perhaps I am wrong, but can someone answer how the number of golf courses in the world can increase from 33,161 in 2017 to 38,864 in 2019 while the number of golf holes has decreased from 567,111 to 556,176, representing the theoretical closure of 613 golf courses? My guess is that the research provided by the NGF changed in 2019, from reporting golf facilities to golf courses, making the comparison to the prior reports not meaningful.

Does it matter? The National Golf Foundation exists:

“to foster the growth and vitality of the game and business of golf. NGF is a community of individuals and golf businesses committed to being (sic) the most well-informed advocates for the growth of the industry.”3

What surprises me is that rather than committing to an open and cooperative sharing of information, the NGF, as the golf industry’s Chamber of Commerce and under the direction of their Chief Business Officer, stifles independent research, such as this book, designed to benefit the industry in the aggregate.

As evidence of this opinion is the email I received on Jan. 16, 2020, from the NGF

2 R&A, “Golf Around the World,” Page 5. 3 https://www.ngf.org/

70 Member Services Administrator, who wrote in essence,

“We are appreciative of your member support of the NGF. While different membership levels allow access to different tiers of NGF reports and datasets, none of our membership levels provide rights to publish any NGF proprietary data (including anything in a member report) or create derivative products from that information. I’ve confirmed with our executive team that those restrictions would preclude NGF from offering updates on specific data you requested in the past for your book.”

The National Golf Foundation provided Excel files and reports and accorded the opportunity to review each of “The Business of Golf – What Are You Thinking?” editions before publication for the past decade. Go figure.

Perhaps the Chief Business Officer believes in the Arab proverb “that it is better to have 1,000 enemies outside of the tent, than a mere one within the tent.”

The issue is that I am not the enemy. Our mission is to create smart, profitable insights that optimize the financial performance of a golf course. Go figure.

But this “incident” is indicative of what an “outsider,” an individual golf course owner or team, will receive if one questions the status quo.

The National Golf Foundation, you would think, would have the intellectual curiosity to explore how their data are leveraged to advance the financial potential of golf courses rather than creating a “silo” of its information.

In responding to the email above, another leading industry spokesman wrote, “Ah… politics.” A leading PGA educator sighed, “The foundation of academic research is the ability to cite another publication in the public domain with proper attribution.” A third individual, a writer for another leading national association, responded, “So is this, ‘Thanks for your member support, but you can’t use any of our stuff?’”

How can we rely on published reports from the National Golf Foundation if they don’t contain a degree of confidence and a margin of error? The importance of both is discussed below:

“Statistical results should always include a margin of error and confidence intervals. This information is important because you often see statistics that try to estimate numbers about an entire population based on asurvey of only a part of the population; in fact, you see these statistics almost every day in the form of survey results.”4

The NGF position of controlling the message is not unique. In discussing the potential 4 https://www.dummies.com/education/math/statistics/why-margin-of-error-and-confidence-intervals-matter-in-statistics/

71 of the Predictive Index to identify the economic viability of a golf course based on its location, the USGA also had no interest. They were very sensitive to participating in the research, which had demographic implications for identifying golf courses that had little probability for economic success. They wanted to maintain a public posture that golf was far more equalitarian in who participates in the sport.

What does it matter to the golf course owner and the management team? A frame of reference to the industry, at both a macro and micro level, is vital to forming reliable conclusions in the implementation of your strategic plan. Knowing how many competitors you have, whether they be well-intended Golf Associations or golf courses in your local market, frames the opportunity to excel.

Here is what we know for sure.

Golf Comes in Many Different Flavors

Playing golf is “a game in which clubs with wooden or metal heads are used to hit a small, white ball into some number of holes, usually 9 or 18, in succession, situated at various distances over a course having natural or artificial obstacles, the object being to get the ball into each hole in as few strokes as possible.” It provides a wide array of different opportunities shown here:

One of the fabulous things about a golf course, compared to tennis courts, soccer fields,

72 football fields, or baseball diamonds, is that every golf course is unique. For example, consider the typography, the number of bunkers, width of the fairways, extreme rough or out of bounds, psychological hazards, the depth and challenge of recovering from the rough, trees by height and density, water hazards and prevailing winds. Then there are the green targets, based on size, visibility, firmness and contour, and the green surfaces, affected by speed and putting difficulty. All of these factors contribute to making every golf course unique. Even playing the same course changes by moving around the tee markers and pin locations. That is the beauty of the sport.

One can further realize the diversity of the golf experience by looking at the full range of “par” on courses in the United States:

Par # of Courses Par # of Courses 27 461 57 14 28 42 58 31 29 105 59 22 30 116 60 74 31 120 61 32 32 106 62 46 33 134 63 32 34 255 64 31 35 1,153 65 34 36 2,433 66 35 37 58 67 37 38 3 68 59 39 4 69 94 41 1 70 1,360 42 1 71 2,561 44 1 72 6,731 53 1 73 103 54 149 74 18 55 12 75 2 56 16 76 1

73 Diversity is perhaps best expressed by the various golf course settings:5

1. Links golf courses are seaside courses that look like those in the east of Scotland, where the game originated. They are open grassy expanses, with rolling hills, deep roughs, and no trees. 2. Lush, manicured turf, favorable weather, and significant tree cover characterize parkland golf courses. 3. Heathland golf courses are inland courses that are characterized by low- growing shrubs, gentle slopes, and few to no trees. They resemble the inland golf courses of England and Scotland. 4. Oceanside golf courses border the ocean, but unlike links courses, they are well above sea level.

5. Mountain golf courses often aren’t in the mountains but have a view of the mountains. 6. Usually located in the flatlands of the Midwest in the United States are prairie golf courses. They are flat, have few trees, and have views of the prairie. 7. Desert golf courses are usually located in the arid regions of the southwest United States.

Who is the Golfer?

How good is the average golfer? The harsh truth is — not very. If one stands on the first tee of a public golf course, rarely will you see a swing that resembles anything you see on TV. The PGA Tour marketing logo, “These Guys Are Good,” is so authentic and so understated.

The average score of the golfer, according to various published reports, is 97; men shoot 95 on average, while the typical woman shoots 106.6 The distribution of golfers by scores breaks down this way: under 80 = 5%, 80 – 89 = 21%, 90 – 99 = 29%, 100 – 109 = 24%, 110 – 119 = 10%, and >120 =11%.

The USGA reports that the median golf handicap for men is 13.7 This index represents a score of about 90. But the USGA handicaps are only obtained by members of private clubs or avid public golfers, who comprise about 4.5 million of the 24.2 million golfers.

Here is an analysis of what a golfer scores by age:8

5 http://golftrainingaidandteachingtool.com/Golf_Courses_01.shtml, Jul. 4, 2008. 6 https://www.chuckevansgolf.com/what-is-the-average-golfers-score/ 7 https://www.usga.org/handicapping/handicap-index-statistics/mens-handicap-index-statistics-d24e6096. html 8 https://mygolfspy.com/study-overall-golfer-performance-by-age/

74 There are flaws in all these numbers, however.

The first is that they assume golfers are playing by the rules. I doubt that all golfers take a stroke-and-distance penalty on a lost or out-of-bounds ball. Gimmies on the green are frequent. Whiffs are declared “practice swings.” An expected matter of courtesy is mulligans on the first tee. Given this, I am confident that the average score is well above 100, and that handicaps are much higher than reported.

It is speculation that less than 10% of the 441 million rounds played in 2019 could be posted if the round was in a USGA tournament.

Shown here is the average score, based on surveys we conducted in 2019:

Notice that 13.4% of golfers (including myself, a former two handicap 40 years ago), except on the rare occasion, don’t keep score.

75 What is the relevance of this data?

Golf is a challenging game, and the variable factor that renders a round enjoyable is the length of the golf course and its slope rating. The slope rating is:

“The USGA slope rating of a golf course is a mark that describes the measure of difficulty for a bogey golfer relative to a scratch golfer at a specific set of tees. It describes the fact that when playing on a more difficult course, the scores of higher-handicapped players will rise more quickly than those of lower- handicapped golfers. The slope rating of a set of tees predicts the straight-line rise in anticipated score versus USGA course handicap, as in the mathematical slope of a graph.”9

The lowest slope rating is 55, and the highest is 155.10

Note the difference between the course rating and slope rating. The course rating is:

“A USGA Course Rating is the evaluation of the playing difficulty of a course for scratch golfers under normal course and weather conditions. It is expressed as the number of strokes taken to one decimal place (72.5), and is based on yardage and other obstacles to the extent that they affect the scoring difficulty of the scratch golfer.”11 The course rating, a measurement of difficulty for the accomplished golfer, and the slope rating, a measure of the increased difficulty one course may have over another course for the bogey golfer, are important indicators. The higher the slope rating, the greater the maintenance costs, and the longer the pace of play, which impacts the customer experience and the ability of the golfer drawn to the facility. Ultimately, we believe the higher the slope rating the higher the green fee that should be charged to cover the increased maintenance costs.

We have yet to hear a golfer finish a round and state, “The golf course was too easy. I am not coming back.” I frequently hear in our travels to golf courses around the world, “The course is too difficult, I lost too many balls, the pace of play because of the length of the course was too slow. I am not coming back.”

Thus, the focus on creating an enjoyable experience for the customer is paramount.

Did They Kill the Game?

How did the game get to become so complicated? Where did the golf industry go awry? I believe it was at the hands of today’s modern architects: Robert Trent Jones, Pete Dye,

9 https://www.wegolf.club/slope-and-rating-definition/ 10 http://ncrdb.usga.org/ 11 https://www.usga.org/handicapping-articles/course-rating-primer-e5bf725f.html

76 Jack Nicklaus, Greg Norman, Tom Doak, early in his career David McLay Kidd, and many others.

With the increase in popularity of golf lead by Arnold Palmer, ‘bigger and better’ became in vogue as the U.S. grew in affluence. It is fascinating to see the influence of the famed architects on the increasing difficulty of the game, as shown here:

Architect Courses Sampled Median Year Course Built Slope Rating William Bell 19 1929 120.79 Tom Bendelow 70 1913 123.45 Press Maxwell 23 1961 125.30 Perry Maxwell 25 1930 125.34 Geoff Cornish 125 1961 125.60 Donald Ross 233 1920 126.08 Ron Garl 78 1988 127.94 Alister MacKenzie 15 1925 128.31 Seth Raynor 26 1922 128.73 Colt & Alison 13 1921 129.00 A. W. Tillinghast 61 1920 129.35 Dr. Michael Hurdzan 59 1995 130.14 William Flynn 25 1926 130.36 Coore & Crenshaw 16 2000 130.37 Tom Doak 17 1999 130.57 Robert Trent Jones Sr. 163 1968 130.85 Charles Blair MacDonald 10 1914 131.00 Arthur Hills 23 1994 131.04 Jeff Brauer 27 1999 131.54 Gary Player 33 1991 132.14 Weiskopf/Morrish 51 1995 134.04 Arnold Palmer 166 1994 134.85 Rees Jones 74 1995 135.16 Pete Dye 97 1987 135.29 Robert Trent Jones, Jr. 76 1991 135.57 Tom Fazio 162 1996 136.03 Jack Nicklaus 121 1996 137.61 Greg Norman 19 2001 138.78 Courses Sampled: 1827 ©JJ Keegan+, 2020

Note that the above chart, which focuses on slope rating, comes with a million caveats. We believe it fairly states “in all significant and material respects,” the slope rating for

77 each architect. But we are sure it does not precisely measure the slope rating from the back tees of all courses built by the named architect. Why?

First, not all golf courses built by an architect were sampled. The sample range highlighted the courses from 1870 to 2013. Thus, if a course, i.e., a Donald Ross masterpiece, was subsequently renovated by another architect, it was not considered. Ross built over 400 golf courses, but only his courses in the United States were studied.

The slope rating for some courses, i.e., Sand Hills in Nebraska, a Top 10 Golf Course in the world due to the huge variability of winds out there, is surprisingly not listed in the USGA Slope Rating database as of January 2020. Some of the best courses built by Coore & Crenshaw and Tom Doak after 2013, i.e., Sand Valley in Wisconsin, are not included. We are confident, had they been, the slope rating of Doak’s courses would reflect a higher rating.

Golf Course architects are like artists. Their canvas is the earth. Their paint brushes are bulldozers. From its inception, golf was a ground game. The introduction of the aerial game by Robert Trent Jones Sr. The devilish British Brutes by Pete Dye, which brought forced carries to the fore. False fronts and small green targets by Nicklaus were the forks in the road that has contributed, along with changes in equipment perceived as making historic courses obsolete, to the industry’s decline.

Difficult became celebrated as the slope rating of golf courses increased from the average of 120 before 1980 to 127 after that. The courses they built were without concern about the cost of maintenance or other operational considerations. They defend their Machiavellian practices, meekly stating they were merely fulfilling the wishes of those who retained them.

Other architects became enamored and built courses on steroids, amplifying their egos. They catered to a small group of elitist and highly skilled golfers. Or, they used their ability as a basis for their designs, continuing to make the game too challenging and not much fun for the masses. In fairness, we noted that not all, but many architects have played a role in making the courses too difficult.

To obtain independent verification about the increasing difficulty of the game, we asked Joseph Passov, former long-standing Travel Editor for Golf Magazine, for his reaction to our research about architects and escalating slope ratings. A historian of the game of comparable stature to the incomparable Bradley Klein, prolific author, and highly respected architectural critic, Passov replied:

“This is certainly an interesting premise. I think you’ve got a sufficient number of primary/influential architects represented. At least from an anecdotal standpoint, the data seems correct. I’m a little surprised that Weiskopf/Morrish is as ‘high’ as it is, because they were more into playability, especially compared to the Nicklaus (and Fazio and Dye) courses that always seemed in their neighborhood, but it’s not ridiculously high,

78 either. Coore-Crenshaw has never been all about difficulty, so I’m not surprised to see the trend towards the lower end of the slope scale. I forgot how hard Norman’s courses could be, given that he’s generally favored that shortcut around his mostly low-profile greens, but I guess as a group, his tracks are tough. My gut feeling about those high average slopes and what brutally hard courses did to harm the game is complicated. Nicklaus, Fazio, Dye, Jones Jr. built many courses intended to be vehicles to sell real estate. As such, they went with exciting features and many hazards because they looked appealing to real estate buyers. Also, developers knew that they could attract premium buyers by hosting big tournaments and by getting ranked as ‘Top 100’ or ‘Best New.’ Well, you attract a big tournament by offering up a ‘tough test.’ And due to Golf Digest’s great emphasis on ‘Resistance to Scoring’ as one of its critical variables in their rankings, developers (and their architects) went the extra mile to create those tough courses. Why build a green with a simple grass knob in front that would prompt all kinds of strategy puzzles when you could prop it up and front it with water and sand? That’s where things went very wrong in terms of playability and fun. While the criticism may be true that Jack only built the kinds of courses that fit his own game (at least the bulk of them), the other guys were guilty of building to the whims of the developers who wanted bigger, harder, more dramatic.”

A member of the American Society of Golf Course Architects privately commented: “The average ASGCA member handicap has to be over 10. I’m going to guess it’s closer to 15 since, for every single digit I’ve played with, I know 2 or 3 that can’t hit it out of their shadow. From my experience, if there is anything to learn from the ASGCA, many do not genuinely understand how the game is played. It takes very little skill or knowledge of the game to make a hard golf course. I believe much of our misalignment with golfers is we ignored proven design principles found at places like the Old Course and the National Golf Links, and thought we could do better, that our ideas of mounds, railroad ties, and deep bunkers were advancing the game, when in fact they were ignoring why we love the game. We love the game for the adventure, the successes of striking a solid shot, the thrill of a saved par from a bunker, and the camaraderie. Fortunately, compelling short courses and well-thought-out practice fields like wedge ranges are becoming in vogue.”

79 Another ASGCA member commented:

“I do think there has been a monumental shift in the mentality of many architects who grew up in the age of declining golf participation. There are a whole bunch of guys that seem to understand how to make golf fun, but, for some reason, the ‘the old guard’ still doesn’t seem to get it. They talk the talk but continue to build new courses and remodel existing courses and incorporate multiple forced carries and bunkers that are excessively penal. David McClay Kidd had an ‘aha moment,’ and now he seems to embrace the importance of width, large greens, etc. His earlier works were very penal. Many architects are outstanding golfers, and I believe they don’t truly understand how far the average person hits the ball or how little control they have over where it goes. I also contend that frequently we in the golf business (architects, golf pros, managers, Board members, and Greens Chairman) don’t understand that the average golfer is not the high handicap golfer at his club (maybe a 15 or 20 handicap) but rather the ‘average golfer’ is the guy who doesn’t belong to a country club and doesn’t have a USGA handicap and maybe only plays 3-5 times a year. I think my wife would fall into that group. She played 4 or 5 times last year, doesn’t have a handicap, hasn’t bought clubs in 5 years, and couldn’t care less what her score is. She’s out there for the fun of it (and dinner afterward). If one in nine people plays golf, it seems that only a small percentage of those people probably consider themselves a ‘golfer.’ If, as an industry, we could figure out how to get those other six people to try the game a few times a year, that would be huge for growing the game.” Shown here is a summary of the slope rating of courses in the United States by decade, which further confirms that golf has gotten too difficult for the masses:

80 Why the dip from 1920 to 1960? From World War I, the Depression, World War II, the Korean War, and the Vietnam War, one could speculate those events consumed resources and attention, rendering the construction of golf courses more expensive. Shorter + Easier = Lower Construction Costs, all things being equal.

Long Lists

The golf course owner and entrepreneur was the second contributor to the increasing difficulty seeking to be accorded acclaim by building a golf course that was worthy of being ranked in the Top 100 of the world. The architects heeded their clients’ instructions.

Inclusion in such lists was prestigious when first published in 1984 by George Peper when he was the editor at Golf Magazine. In the March 2006 edition of Links Magazine, Peper writes:

“Hey, it seemed like a good idea at the time. The magazine got great publicity and sold more ads and copies, and I was proud of our biennial list, the first to rank courses from one to 100. Over time, however, I realized I’d created a monster. ‘You’ve done our club a tremendous disservice,’ Pine Valley president Ernie Ransom told me after we pegged his course as No. 1 in the world. ‘Everyone wants to play here now, and 99 percent of the requests can’t be granted.’”12

The importance of such lists has significantly become diluted by the plethora of such listings over the past decade by Golf Digest, Golfweek, Golf Advisor, and other publications. To see the folly of these lists, go to https://jjkeegan.com/top-130-golf- courses-us-golf-magazine-vs-golf-digest/ for an analysis of the wide variance in rankings between the 2016 Golf Magazine and the 2016 Golf Digest list. Or to see the absurdity of such rankings, review (click here) the Golf Advisor listing of the top 50 courses chosen by its readers, published on Jan. 10, 2020.13

One of the great things about the game of golf is the endless debate on which golf course is best. That answer speaks to the core connection between golfers and the course, and the bond that is formed. The discussion attracts people to the game, spurs many bar conversations, and serves as the incentive that drives golf course owners to seek and maintain excellence.

12 George Peper, “Out of the Shadows,” Linksmagazine.com, March 2006, p. 45. 13 https://www.golfadvisor.com/best-of/golfers-choice-2019-top-50-us?utm_source=GA&utm_medi- um=DedicatedEmail&utm_campaign=GolfersChoice&utm_content=Top50

81 Many golfers and golf industry personnel attach great importance to the ratings given golf courses — the Top 100 in the world, the Top 100 in the United States, the Top 100 the Public Can Play, the Top 100 Golf Courses before 1960, the Top 100 Golf Courses Since 1960; the list goes on and on.

For a golf course, being ranked can have significant monetary benefits, from establishing high membership fees for the private club to attracting golfers at high green fees at the public facility. Being ranked also often enhances the brand image of the course.

The relevance of a top-ranking is that it has financial implications for the golf course owner. All golf courses that are so ranked have one element in common — the maintenance conditions of the golf course are usually superior.

In 2019, Pat Ruddy, owner of the European Club, a famed golf course architect, and indeed a delightful fellow, wrote a book titled, “Holes in Head” (love the double entendre of the title), which speaks to the length of a golf course and the correlation to be highly ranked. He said:

“Studying the best golf courses in the world in 2019 shows that there have been substantial changes in golf course design over the past thirty years, and they are beginning to show in telling fashion in the World’s Top Golf Courses lists. What exactly is meant by ‘top’ in the rankings is not clear. But one thing is sure, and that is the fact that golf at the top has become a long-hitting sport and the most talked-of courses must be graded initially, in a cold-blooded and factual way, into groupings based on length, just as boxers are sub-divided based on weight before judgment is made on elements such as conditioning, history, and the most delicate design details. Length is an actual and factual primary marker, which does not accommodate specious arguments or assumptions of superiority and opinions. Length places the ‘runners’ into initial fact-based running order. You either have those yards or not.”14

14 https://jjkeegan.com/a-debate-with-patty-ruddy-owner-european-golf-club-is-the-length-of-a-golf- course-a-measure-of-its-quality/

82 Shown here are the longest courses in the Golf Magazine’s 2017 list:

83 We have a different viewpoint from Mr. Ruddy about what makes greatness. My definition is a course where customer loyalty and desire to play are so high that the facility can command a premium. I expressed my view to Ruddy in a very respectful email exchange, and he replied on July 1, 2019:

“I am concerned that my thinking is projected in full. To present DISTANCE = GREAT is not my case. What I am saying is that THE TOP PLAYERS ARE VERY LONG and so it follows that BIG COURSES ARE REQUIRED FOR TOURNAMENT PLAY. My charts show that those who organize the most prominent tournaments are all on-board with large courses. They are no fools, and I am not alone in my thinking. My reference to Russian Dolls in the excerpt attached makes the point that a BIG COURSE also contains many smaller courses within. To that extent, at least, it is more versatile than the lightweights.”

Fanatical, serious golfers who challenge themselves on the toughest golf courses became an addiction, which is a third contributing factor to the increased difficulty in golf.

A golf course owner must be wise and not succumb to the belief that longer, harder is good. A great case in point is a recent feasibility study prepared by a national consulting firm.

The firm projected that a $6.5 million renovation would be financially viable in changing the golf course from a slope rating of 116 to 136 on a course whose length from the white tees was 5,645 yards and from the tips at 6,205 yards. They forecasted an increased prime-time green fee from $32 to $59.

With six forced carries, 33 deep bunkers, and undulating greens, it is my opinion that the short course with a high slope rating is part of the dissuading factors for golfers beyond 10 miles to visit this course. The bet was that the significant improvements would attract tourists, which has not come to fruition. The City Council had to write off the debt as part of the general fund subsidy.

The golf industry often claims that it is the cost of green fees and the long hours required to play a round that are the inhibitors to growth. The Topgolf version of the game, with giant dartboard-like targets on an outfield, has proven those excuses are fallacies as the average ticket exceeds $100, and the wait to be assigned a bay often averages over two hours on the busiest evenings.

Why belabor the point on how hard and challenging golf has become? The question is, does your golf course offer a desirable experience? How do you make it kinder and gentler?

84 Right-Sizing

A golf course’s primary responsibility is to ensure that the course’s difficulty is consistent with that desired by the vast majority of its customers. Not all golf courses are meant for every type of golfer. Can you imagine a beginner golfer playing TPC Sawgrass and enjoying his “golf experience”? No chance.

There are several things a golf course management team should consider to “right-size” its golf course.

First, retaining a golf course architect to do a one-day site visit. There are numerous golf course architects (click here)15 who would undertake such a visit, for $2,500 plus expenses, to identify the “low-hanging fruit” that would result in a detailed written report on creating a path on which to proceed.

Second, in 2011, the PGA of America and USGA issued a set of recommendations designed to encourage golfers to play from appropriate yardages. These guidelines are based on the golfers’ average driving distance. To find your driving distance, these two organizations recommend:16

Avg. Drive Recommended Tees 300 yards 7,150-7,400 yards 275 yards 6,700-6,900 yards 250 yards 6,200-6,400 yards 225 yards 5,800-6,000 yards 200 yards 5,200-5,400 yards 175 yards 4,400-4,600 yards 150 yards 3,500-3,700 yards 125 yards 2,800-3,000 yards 100 yards 2,100-2,300 yards

We note that an 18-handicap male at sea level is likely to drive the golf ball only 190 yards, suggesting the ideal length of the golf course is just under 5,200 yards.

Another way to view recommended tees is via clubhead swing speed. Former golf course owners Arthur Little and Jan Leeming published an article, updated in 2019, called “Your Course is Too Long.” They cited a study, entitled “The Long and Short About Golfers,” conducted in 1998 by Bill Amick, the well-respected golf course architect. When analyzed critically, the data in this study indicate that shorter and more proportionally positioned tees are necessary to provide an equal challenge for a full range of players.

15 https://asgca.org/ 16 https://www.liveabout.com/set-of-tees-to-play-from-1562675

85 Based on their experience and research, we believe that golf courses should have six sets of tees with yardage ranges and proportionality (based on the midpoints of the intervals) as follows:17

Tee set Range of yardage Proportionality Swing speed to base tee #1 3,900-4,100 65% 65 mph #2 4,600-4,800 77% 75 mph #3 5,400-5,600 90% 85 mph #4 6,000-6,200 100% 95 mph #5 6,500-6,700 108% 105 mph #6 6,900-7,100 115% 115 mph

They also felt that the 7th set at 7,400-7,600 is appropriate for men’s professional events and that there should also be a set of tees at 2,000 yards for beginners, with its scorecard.

In surveys we conduct, the yardage golfers prefer to play is consistently between 6,000 and 6,200 yards, as shown here for a mid-west U.S. poll conducted in December 2019.

A joint initiative, launched in 2011 by the USGA and The PGA of America, was TEE IT FORWARD. It encouraged players to play from a set of tees best suited to their driving distance. In addition to providing more enjoyment for golfers, teeing it forward can also be one of the most important steps that golfers take in improving the pace of play.

17 Arthur Little, “Your Course is Too Long,” email Jan. 20, 2020.

86 A recent survey of TEE IT FORWARD participants found that:18

• 56% played faster. • 56% are likely to play golf more often. • 83% hit more-lofted clubs into greens. • 85% had more fun. • 93% will TEE IT FORWARD again.

Jan Bel Jan, ASGCA President in 2020, has recommended the adoption of “scoring tees,” stating, “If we can make it possible for players with slow clubhead speeds to have more success getting on greens in regulation, we have the opportunity to keep them in the game.”19

She feels that the ideal length of tees, between 4,000 — 4,400 yards, is appropriate. Items considered are ball trajectory, angles of play, and what it would take for every player to get on, say, a par 4 with two well-played shots. The pace of play is also a significant consideration; she wants all players to reach a par 4 in two or three shots, not five or six.

We also saw another signage system that we thought was very good. It was previously used at the Sand Barrens Golf Course in New Jersey, now operated by the Union League Club of Philadelphia:

18 https://www.usga.org/teeitforward/ 19 https://asgca.org/scoring-tees-from-bel-jan-asgca-profiled-in-golfweek/

87 The tee markers were labeled with the golfer’s handicap index as follows:

• Back tees: Pro 0 - 6 • 1 Up: Championship 7 - 12 • 2 Up: Amateur 13 - 24 • 3 Up: Rookie 24 - 35 • 4 Up: Beginner: 36 +

I like the description. But It would be helpful if the signs indicated what one should anticipate scoring and direct them to the tees accordingly.

At Yas Links in Abu Dhabi of the United Arab Emirates, I saw a marvelous idea to make the game simpler and to make sure the golfer is playing from appropriate distance tees.

Do you know what 66 and 62 mean? There were also tee markers that indicated 70 and 54. I am embarrassed to admit that this was the first time I have seen such an idea. The answer is that the tee markers indicate the estimated length of the course from those markers, i.e., 7,000 yards (70), 6,600 (66).

The elimination of the color scheme on tee markers, usually black, blue, white, yellow, and red, gets the golfer thinking about the proper factor distance. Without colors, the tee markers will also be non-gender specific. A marvelous idea. The cost to implement?

An estimated $7,500 to change color-based tee markers to those noting the estimated distance of the course. It’s a small price for a big boost in accelerating the pace of play by having the golfer play from ability-appropriate tees and enhancing their experience. Giving them a reasonable opportunity to achieve a satisfying score will create loyalty and return visits.

88 Another Option — Reduce Distance

The United States Golf Association and the R&A on Feb. 4, 2020, released their “Distance Insights Project: Implications of Hitting Distance in Golf,” representing years of study. (Click here)20

The report says, “The Rules of Golf state the fundamental principle that ‘golf is a challenging game in which success should depend on the player’s judgment, skills, and abilities.’” The conclusions offered are as follows:

“First, the inherent strategic challenge presented by many golf courses can be compromised, especially when those courses have not or cannot become long enough to keep up with increases in the hitting distances of the golfers who play from their longest tees: • Increased hitting distance can lead to a reduction in the variety, length, and creativity of shot types needed on such courses and to holes more often being overpowered by distance, as well as to an increased emphasis on the importance of distance at the expense of accuracy and other skills. • This can begin to undermine the core principle that the challenge of golf is about using a broad range of skills and making risk/reward judgments during a round. • The result is also that an increasing number of such courses, both widely renowned and less well-known, are at risk of becoming less challenging or ultimately obsolete for those who play from their longest tees — a severe loss for the game. Second, the overall trend of golf courses becoming longer has its adverse consequences that ultimately affect golfers at all levels and the game as a whole:

• Expanding existing courses and building longer new ones often requires significant capital investment and higher annual operating costs.

• Overall, the trend towards longer courses puts golf at odds with the growing societal concerns about the use of water, chemicals and other resources, the pressures for development restrictions and alternative land use, and the need to mitigate the long-term effects of a changing climate and natural environment.”21

The pushback to this report began immediately by many tour professionals and equipment manufacturers, led by Titleist, even though the report doesn’t provide any solutions.

20 https://www.usga.org/content/dam/usga/pdf/2020/distance-insights/SOC-FINAL.pdf Page 1 21 https://www.usga.org/content/dam/usga/pdf/2020/distance-insights/SOC-FINAL.pdf Page 2

89 In a Golf Magazine article penned by Dylan Dethier titled, “10 Important Takeaways from the USGA/R&A’s Distance Insights Project,” he summarized:22

1) Hitting distance has increased, and it’s going to continue rising in the future. 2) Golf courses have gotten longer, and they’re going to continue getting longer. 3) That combination — longer drives and bigger golf courses — is “detrimental to golf’s future.” 4) There are several reasons this is bad for golf’s future. 5) Intermission! On a different note, courses should have shorter options, too.

6) The USGA/R&A doesn’t want to roll the equipment back to a particular era. 7) Nor do the governing bodies want bifurcation. 8) They’re going to take their time figuring out the next steps. 9) And they’re not providing any solutions right now. 10) To the USGA, this is a big deal.

What is the implication for today’s golf course owner? Issues like this are part of the “noise of the industry” that distracts course management from their core function of creating an experience that exceeds the fees charged.

There are times where anticipating changes is the right strategy, and there are times when reacting to changes is best advised. Seems to me one important conclusion course owners can derive from the USGA Distance Report is that whatever the overall length of the course, it would be wise to provide adequate teeing spacing at more forward distances, in addition to providing separate scorecards for the back tees.

When is it Time to Remodel?

Restoration, renovation, or remodeling are events that all golf courses will encounter.

The differences in these terms are slight. Gil Hanse, ASGCA, explains:

“Restoration is when the principles, style, and objectives of the original architect are the overriding factors for decision-making on the project. There’s also sympathetic restoration when those same elements are put into place as the overarching factors. Still, then you’re accommodating the modern game and technology in placing and designing the features.

22 https://www.golf.com/news/2020/02/04/usga-distance-report-10-takeaways/

90 Renovation is when you allow your thoughts to creep into the equation, either because there’s no significant architectural pedigree or no desire to restore what was there, or perhaps there’s something that just doesn’t work based on the modern game.”23

Clubs decide to remodel when it becomes apparent to the governing body that deficiencies exist in the structure of the club in one of the following areas:24

1) Economic problems. These become evident when it is challenging to raise dues, or attract new members or revenues are declining.

2) Maintenance problems. Typical among these include: • Deteriorating greens • A desire for USGA greens • Need for larger tee surfaces • Need to eliminate difficult-to-maintain bunkers • Need for a new irrigation system • Drainage problems • Flooding problems • Cart path extensions 3) Design problem. The Club membership is composed of serious golfers who desire that the club be updated or be changed to enhance their golf experience. Typical issues that facilitate golf course renovations include: • Desire to update the design of course • Willingness to make the course more difficult/less difficult • Regional or national tournaments • Rebunkering to accommodate longer tee shots • Need to revise individual unfair holes • Restore course for the sake of historical accuracy 4) Aesthetic problem.These are created either through a current inadequate or initially inadequate landscape budget, through improper planning by a well-meaning, but misguided tree planting committee, or other in-house improvements that were not carried out well.

23 https://www.golf.com/courses-and-travel/2018/08/30/gil-hanse-golf-course-design-restoration-renovation 24 https://asgca.org/design/existing-courses/course-renovation-articles/the-business-of-golf-course-remodeling

91 There are very few golf courses that budget for capital improvements. Most courses incorrectly wait until the capital project is mandated and then often borrow to fund the costs.

Below is the course of the future that addresses and embodies the concepts mentioned above. Click here25 for a virtual tour experience.

Exercise

This chapter brings a manageable workload compared to the next one. Go to Chapter 1, and confirm your Predictive Index score, comparing the slope rating of your golf course to the MOSAIC profile. If your course is not in a “4” or “5” score, call a member of the ASGCA and schedule a one-day visit to your facility to identify the “low-hanging fruit” that could be changed to enhance the golfer’s experience and hopefully, increase green fees. It probably starts with shortening the course for the average player.

Concluding Thought “The hardest thing to open is a closed mind.” — Author Unknown

25 https://asgca.org/course-of-the-future/

92 Chapter 5 – The Living Organism

“It is not the will to win that matters. Most people have that. It is the will to prepare to win that matters.” — Bear Bryant

Russian Roulette

A golf course designed by an architect appears that way only on the day it opens. It is a living organism that is continuously changing.

The task of the golf course superintendent is daunting in many ways.

Their role as the quarterback, whose prime performance is necessary every day, is underappreciated and taken for granted. With unraked bunkers, divots on tees not filled, rough not maintained, fairways not crisp, and greens are not rolling smoothly to fair pin positions, the complaints would roll in quickly. A golfer often blames his ‘problems’ on the course conditions he played on, not his lack of his ability.

Superintendents are not only the stars of the golf course industry but perhaps the most unheralded group of industry professionals. Their technical knowledge is rooted in chemistry, physics, agronomy, and other scientific disciplines. Their superlative expertise is both a blessing and sometimes a curse.

Members of boards of directors, owners, general managers, and those employed in the golf shop lack detailed knowledge of what is required to properly maintain a golf course. Many probably water their lawns, see the grass grow, mow it, and think it is a simple process. Not really. Because superintendents prefer to work outdoors, relating to those indoors can cause communication barriers.

It is our goal to provide background so that these barriers that may exist are removed by an understanding of the complexity of a superintendent’s role.

A golf course annual maintenance cost can range from under $200,000 to over $2.5 million. It’s hard to believe that roughly the same amount of land could have such wide- ranging expenses.

93 One of the significant differences in the maintenance practices of low-end courses, when compared to elite golf courses, is how often they aerate, verticut, and top dress the greens. An elite golf course will top dress biweekly and may even drill press the greens annually, removing up to 20% of the underlying surface matter on a green. The goal is to improve the quality of the putting surface and reduce the cost of watering by improving drainage, reducing soil compaction, and controlling thatch development.

Do you realize all of the tasks required to maintain a course properly?

One of the most accomplished superintendents serving in the role of a leading consultant is Michael Vogt, Certified Golf Course Superintendent, Certified Golf Irrigation Auditor, and Water Sense Partner. He is affiliated with the McMahon Group, the leading private club consulting firm in the golf industry. Here he summarizes the broad responsibilities and the frequency of various tasks performed between the entry-level and the finest maintained golf courses in the United States. In the chart below are nine of 19 repetitive tasks.

To learn the additional tasks at each level of 10 levels (basic to intense) of maintenance and the associated costs, (click here).1

Aeration is one of many tasks necessary to ensure quality putting green turf, but it comes with a cost. When aerating greens, the golf course will either shut down for a day or close each nine holes for two days to get done. Afterward, while the course is playable within a few days, it takes about two weeks to recover fully to ideal ball roll conditions. How much revenue is forfeited by discounts, lost rounds, and lost sales in the pro shop and restaurant? These are issues that must be faced by all decision-makers who are responsible for cash flow.

94 We often moan about having to maintain our yards at home. Hopefully, no more!

Delicate Balance

What is necessary for the game, of course, to grow? We can debate that focusing on programs to attract new entrants and retaining existing golfers is essential. Still, the long- term success of golf is in creating a competitive challenge for the scratch golfer, while providing an enjoyable recreational experience that challenges the typical golfer, often labeled as a “bogey” golfer.

A golf course superintendent has an incredible impact on one of the most critical elements of the game — the pace of play.

Research by the Golf Course Superintendents Association of America revealed that the pace of play is mostly a management issue. Maintaining proper rough heights, trimming underbrush, marking the course, having tees properly positioned, rating the greens with a fair stimpmeter, and making sure pin positions are appropriate for the type and volume of play are all controllable factors for the superintendent.

The trends in golf course maintenance are working against this balance. Greens are faster, creating higher scores and longer rounds. The rough is often left to grow longer, adding to lost balls and longer rounds. Golfers are insisting on tournament conditions as measured by lower fairway heights, which translates into the inability to get the ball airborne with proper spin. The impact of these three factors is that it takes more labor, more chemicals, more water, and more energy — resulting in increased costs — to maintain a golf course.

For golf course architects, the trends are to more bunkers and increased length over additional acreage. The result is rounds that take longer to play. And maintaining the new architectural style translates into more land, more labor, more water, more energy, and increased costs.

That formula results in higher scores and longer rounds at increased maintenance costs. That does not make for a supportable and defensible golf business model. Lower operating margins and deferred capital expenditures reduce cash flow.

95 According to a report in Golf Course Industry magazine, golf courses have seen the following annual increase in expenses:2

Category Annualized Increase Water 11.0% Nutrients 10.4% Labor 7.0% Energy 3.7% Chemicals 2.5%

With over 600 golf courses closing in 2017 – 2019, it truly is a delicate balance of creating the appropriate golf experience.

Expenses

The quality of the playing field is reduced to four principal elements: (1) labor, the most significant expense; (2) water, fertilizer, chemicals, and utilities; (3) capital improvements; and (4) equipment required to maintain the facility.

Shown here is a snapshot of the cost of maintaining a golf course:

2 http://magazine.golfcourseindustry.com/issue/january-2016

96 Using benchmarks comes with some risks. The range of maintaining a golf course at $644,681 in the transition zone to $1,082,045 in the Southwest is quite broad.

Golf Course Industry reported in January 2020:

“Better weather and continued economic confidence resulted in a stable financial year, with 49 percent of facilities turning a profit in 2019, the highest total in Golf Course Industry’s eight years of collecting economic data.

Widespread financial stability and increasing labor costs mean the average non- capital maintenance budget is creeping toward $1 million. The average projected budget for 2020 is $987,488, the highest in survey history, although we note that 51 percent of respondents work at private facilities. The average maintenance budget was $622,500 when Golf Course Industry debuted the State of the Industry survey in 2013.

The gap between private and non-private facilities will expand in 2020, with the average non-capital maintenance budget of a private course ($1,304,730) more than double what a non-private course projects to spend ($552,202).”3

Think about it. Only 49% of golf courses turned a profit, which represented the highest total in eight years. It’s a tough business when the majority of golf courses are losing money.

Labor expenses represent about 50% of maintenance costs. Shown below is the average size of the maintenance staff:

Course Type Full-Time Seasonal Other All 9 16 3 Private 11 13 3 Non-Private 6 20 3

3 http://magazine.golfcourseindustry.com/article/january-2020/budget-labor-golf-industry-research.aspx

97 Other components are summarized below:4

Component Cost Fungicides 49,000 Mowing/Cultivating Equipment 37,700 Fuel 36,200 Water 28,600 Electricity and Natural Gas 24,800 Granular fertilizers 24,300 Liquid fertilizers 15,500 Irrigation Parks, Heads, and Maintenance 10,170 Insecticides 9,160 Wetting agents 9,120 Herbicides—pre-emergent 8,010 Seed 7,780 Plant Growth Regulators 6,050 Course Accessories 5,970 Herbicides—post-emergent 5,120 Aquatic Weed Control 3,710 Shop Tools 3,620 Handheld Equipment 3,180 Total 287,990

Finally, a primer of golf course maintenance must mention the importance of water conservation, because water’s escalating cost in many parts of the United States has the risk of financially undermining many courses. Though the average water budget in the United States is $88,552, it soars to $173,901 in the Southwest and $244,513 in the Pacific region.5

Andy Staples, ASGCA, a leading golf course architect and environmental guru, believes that a golf course is challenged financially if the water expense exceeds $80,000.

The rule of thumb is that a course is financially challenged if the cost of water exceeds $1.20 per 1,000 gallons or $387 per acre-feet.

4 https://www.golfcourseindustry.com/article/gci1016-golf-state-industry-report-2016/ 5 https://www.gcsaa.org/resources/research-information/operations-surveys-reports

98 If They Were the Only Costs

Because a golf course is a living organism, creating a capital budget and providing an annual reserve to replace the vital components is prudent.

Unfortunately, as golf courses begin losing money in a competitive market, the first cuts are always made by deferring capital expenditures. While understandable because of the substantial investment, these cuts are often made without the continuing recognition that the condition of the golf course remains the number one requirement of golfers.

The following table provides the estimated life spans of the various components of a golf course, as determined by the GCSAA and Golf Course Builders Association of America.

A golf courses’ annual cash flow should exceed $244,317 in order to create an adequate capital reserve.

Who Would Have Thought?

Most golf courses operate with a potpourri of equipment. Are you looking for a standard equipment list for your 18-hole golf course? The following list of equipment is compiled to meet the general needs of a high-end public or an average private 18-hole golf course. Use this as a minimum guideline for reviewing equipment inventory.

99 Pieces of Equipment Department Total Cost 17 Greens $ 87,500 2 Tees 24,000 4 Fairways 70,000 6 Rough 112,000 6 Transportation Vehicles 25,000 5 Tractors and Trucks 117,000 12 Sprayers and Spreaders 50,800 9 Utility Equipment 56,000 14 Tools and Small Utensils 850 Total $543,150

Keep in mind that a standard equipment list is as challenging to define as a “standard” golf course. Variations may occur, or additional pieces of equipment may be needed, depending upon an array of factors, including golf course terrain, maintenance standards expected, and a range of regional requirements.

We suggest that 10% to 15% of the total equipment replacement value be spent toward purchasing new machinery each season to avoid losing valuable staff time and, potentially, top course conditions due to downtime.

What About a Sod Farm?

They don’t have to maintain that much turf, do they?

An average 18-hole golf course covers 150 acres, of which only 100 acres are maintained turfgrass,6 and includes the following:

Acreage % Turfgrass Rough 51.00 34.0 Fairways 30.00 20.0 Driving Range/Practice Areas 7.00 4.7 Greens 4.00 1.3 Tees 4.00 1.3 Clubhouse House 3.00 1.3 Nurseries 1.00 0.7 Total 100.00 63.3

6 GCSAA, “Golf Course Environmental Profile,” 2007, p. 12.

100 Acreage % Non-Turfgrass Landscape 24.00 16.0 Water 11.00 7.3 Building 6.00 4.0 Bunkers 4.50 2.9 Parking Lots 4.50 2.9 50 33.1

Where do you start? It is just not that simple. Start with the largest single item that commands the focus of the superintendent — grass.

Baskin and Robbins — 31 Flavors

The grass is grass. Right? Wrong!

Turfgrass is a living, breathing organism that will not stop growing, with some strains merely going dormant in the winter. Consider the challenges of proper staffing levels, adequate equipment to maintain prescribed levels of conditioning, and a budget that facilitates turf conditions and will attract play throughout the calendar year.

There are over 12,000 different species of grass in the world.7 Each grass has a different characteristic based on the quality of soil conditions, temperature tolerance, drought resistance, shade adaptation, and wear resistance.

Proper maintenance of grass varies based on water needs, mowing and thatching requirements, fertilizer needs and disease, weed and insect control, all of which are vital components to ensure the quality of the turf. Note that grasses are bred and crossbred to provide the ultimate species for a particular environment, i.e., coastal where salt spray is abundant — paspalum.

In America, there are two broad categories of types of grasses: cool season and warm season. Cool-season grass sprouts in the spring and fall. Warm-season grass grows abundantly in the heat of the summer.

Typical cool season grass types include Bentgrass, Kentucky Bluegrass, Rough Bluegrass, Red Fescue, Annual Ryegrass, and Perennial Ryegrass.

Typical warm season grass types include Bahia, Bermuda Grass, Buffalo Grass, Carpetgrass, Centipede, St. Augustine Grass, and Zoysia Grass.

7 https://www.quora.com/How-many-types-of-grass-are-there-What-is-the-difference-between-them

101 There is also a narrow band that crosses the country called the Transition Zone, as shown here:

“In this transition zone, neither Warm Season nor Cool Season type grasses are uniformly successful. However, several of the Cool Season type grasses, such as Kentucky bluegrass and perennial ryegrass and tall fescue, do well across Kentucky, Virginia, West Virginia, and Missouri. Tall fescue is the best choice in Tennessee, North Carolina, northern Georgia, northern Alabama, and the Texas panhandle. In the lower elevations of these latter states, Warm Season grasses do well too.”8

Golf courses in Kentucky, North Carolina, and Virginia are continually debating the best grass for greens realizing that, in certain times of the year, the conditions will not be up to the standards of the accomplished and discriminating golfer.

Each type of grass reacts differently to the environment.

Bentgrass thrives with much more water than bluegrass. Bluegrass has a 21-day germination period while rye has a 4-day germination period. Which grass would you prefer to plant on a heavily used range? Rye is often the choice for tees and ranges, to facilitate the repair of divots. Poa annua and Poa trivialis are challenging to kill selectively in Kentucky bluegrass and bentgrass. Fescue grass uses 80% less chemical input than bentgrass. Seaside Paspalum, the drought-resistant strain, thrives on saltwater and provides a surface almost as smooth and fast as bentgrass or rye.

Bermuda grass is popular in the warmer climates of the southern United States because its coarser blade provides heat tolerance.

8 http://american-lawns.com/grasses/grasses.html

102 Shown below are the predominant grasses used by golf courses on the fairways and greens:

Fairways Greens Bent 19.68% 66.94% Bermuda 37.71% 22.20% Kentucky Blue 23.57% 9.60% Combo 3.54% 0.00% Kikuyu 0.00% 0.00% Other 2.45% 1.06% Rye 10.46% 0.18% Zoysia 2.60% 0.01% 100.00% 100.00%

I sort of chuckle that 66.94% of greens are bentgrass. That statistic probably doesn’t include the Poa annua (a form of Kentucky Bluegrass) that has crept into many of the bentgrass greens and is now dominant on the putting surface.

Oh my! Expecting the agronomic and maintenance crew to maintain a course in good playable condition consistently is a challenge. Perhaps if you fix your divot or repair your ball mark the next time you play, you will realize that you are helping to maintain the golf course in good condition for the next player.

Drugs That Kill

A golf course superintendent deals with many challenges, including choosing the correct types of grass, controlling water expenses, understanding chemicals, and battling turf diseases.

The primary role of a superintendent is to ensure a natural playing surface, whether on greens, fairways, or tees. Every element of a course is fraught with challenges, as shown in the following figure on the approach to green at a Top 200 golf course in the United States.

103 What’s the problem? A club and a ball will react differently based on the grass on which the ball rests. The goal is to provide a consistent playing surface.

Fertilizers, herbicides, and pesticides are magic chemicals used to create excellent and consistent playing conditions. They are defined as:

• Fertilizer9 — a chemical or natural substance added to soil or land to increase its fertility.

• Herbicide10 — a substance that is used to destroy unwanted vegetation and is toxic to plants.

• Pesticide11 — a substance used for destroying insects or other organisms harmful to cultivated plants or animals.

You can’t be around two superintendents for long before one asks the other, “How much ‘N’ are you dropping on the greens?” Nitrogen (N), phosphorus (P), and potassium (K) are the primary ingredients that are mixed and mingled in what seems to a layperson to be a witch’s brew to stimulate the growth of grass.

These significant nutrients, known as NPK, usually are lacking from the soil as grass requires large amounts for its growth and survival. Each plays a vital part in the health of turf described as follows:

9 http://oxforddictionaries.com/definition/english/fertilizer?q=fertilizer 10 http://oxforddictionaries.com/definition/english/pesticide?q=herbicide 11 http://oxforddictionaries.com/definition/english/pesticide?q=Pesticide

104 Nitrogen (N) is a macronutrient and is the basis for proteins, which are the molecules within plants that perform photosynthesis, making food for the plants. If plants do not have enough nitrogen, they turn yellow.

Phosphorus (P) is an essential nutrient for plants and is an integral part of the process of photosynthesis growth.

Potassium (K) promotes increased root growth and greening.

With turf health, comes disease. The chemicals used to eradicate problems are summarized below:

Chemicals Purpose

Barricade Pre-emergent herbicide broadleaf weeds and grassy weeds: crabgrass, goosegrass, and Poa annua

Beacon Post-emergent grassy and broadleaf weeds for agriculture Certainty Post-emergent grassy and broadleaf weeds with excellent control of both purple and yellow nutsedge

Echelon Pre-emergent control for Poa annua.

Primo The purpose of pre-stress conditioning is to prepare turf grass for extreme conditions before they hit. Using Primo growth regulator before the onset of stresses like heat, drought, disease, and traffic can strengthen the turf, and therefore allow it to withstand ongoing stresses throughout the season. Rodeo Top choice for emerged aquatic vegetation control, i.e., cattails, broad-spectrum grass, broadleaf weed, and brush control Roundup The most commonly applied weed killers in use today. Everyone used these herbicides before the class action law- suits began for Non-Hodgkin’s Lymphoma (NHL) or Chronic Lymphocytic Leukemia (CLL). Tenacity Kills creeping bent in bentgrass.

Velocity Velocity can gradually eliminate both Poa annua, and Poa trivialis from creeping bentgrass at tees and fairways and effectively transition a Poa-dominated mixed stand of turf to pure bentgrass.

For the novice, acquiring the knowledge of what is required to run a golf course may be overwhelming.

105 We Should Be Loving and Kind The 1970s were a significant era for American environmentalism. Congress passed the Clean Water Act and the Endangered Species Act. President Richard Nixon established the Environmental Protection Agency, and the nation observed its first Earth Day.

With the assistance of the United States Golf Association, in 1991, Audubon International initiated the Audubon Cooperative Sanctuary Program for Golf Courses. More than 2,200 golf courses from around the world have joined this program. More than 500 facilities in the U.S., 65 in Canada and 20 in Africa, Australia, Central America, Europe, Mexico, and Southeast Asia are designated a Certified Audubon Cooperative Sanctuaries by fulfilling requirements in all six categories.12

Certification Categories include: • Environmental planning • Wildlife and habitat management • Chemical use reduction and safety • Water conservation • Water quality management • Outreach and education

The GEO Foundation, headquartered in Scotland, is an international not-for-profit dedicated to helping golf to deliver and be recognized for a positive impact for people and nature. Fostering nature, and conserving resources to enhance life within communities, the GEO, with strategic global partners of the R&A, the European Tour and numerous golf associations, focuses on the international community to:

• Protect and foster biodiversity and natural landscapes • Use natural resources responsibly • Generate positive social and economic value • Earn recognition and trust as a sustainable sport and leader • Use its reach to raise awareness for sustainability in the broader world

In 100 countries, golf clubs from six-holes to six-star are OnCourse® or GEO Certified®.

An example of one leading golf courses in these initiatives is the Sentosa Golf Club in Singapore, which is very concerned about global climate change and its impacts on golf and the environment. Andrew H. Johnson, the club’s General Manager and Director of Agronomy, gave a compelling presentation about the effects of climate change, focusing on carbon emissions at the Nine Bridges Forum in October 2019 in Jeju, Korea. (Click here)13

12 https://www.usga.org/course-care/audubon-sanctuary-program-4f48d5a0.html 13 https://jjkeegan.com/economic-and-environmental-responsibility/

106 Carbon has dramatically increased since the advent of the Industrial Revolution. The outcomes of climate disruption are grave: altering weather patterns, changing life support systems, and disrupting the building blocks on which society depends to survive. Johnson stated that carbon emissions have increased by 8% annually into the atmosphere, creating a dangerous and potentially irreversible disparity as shown here:

The increase in CO2 levels is contributing to severe weather events: storms, drought, fires, and accelerating the extinction of animals.

There are various proposed solutions. One is biochar, which is a “soil amendment for both carbon sequestration and soil health benefits. Biochar is a stable solid, rich in carbon, and can endure in soil for thousands of years. It has the potential to help mitigate global warming and climate change. It results from processes related to pyrogenic carbon capture and storage.”14

Other solutions include using clean energy, i.e., lithium battery carts vs. gas-fueled carts. And the reduction of NPK, fungicides, and insecticides are positive steps. Simple steps every course can easily take in their food and beverage area are planting sustainable herbs and removing plastic, i.e., straws, and exchanging plastic water bottles for paper cups.

An efficient approach is being implemented by the USGA Green Section.15 They are monitoring the “traffic on the course” and suggesting areas to reduce maintenance efforts. The first case study was at Crandon Park Golf Course in Miami, FL. Shown here is the heat map:

14 https://en.wikipedia.org/wiki/Biochar 15 https://rm.usga.org/landing.html

107 The USGA provides “data loggers” for 3 to 4 days. Golfers on the first tee receive them, affix them to their bag. The golf course merely ships the loggers back to the USGA for analysis, which provides excellent insights to complement the daily on-course knowledge the course superintendent gleans.

These “heat maps” are only one of the tools the USGA has developed to assist golf courses in better resource management. Other tools include a dashboard that analyzes costs per hole, course maps that dynamical recalculate maintenance costs, advance weather, hole location rotation, pace calculators, and water budgets.

A Beacon for Change

For the golf course industry to continue to be a vibrant business, it is vital to grasp that a golf course can’t continue to maintain 150 or even 100 acres of a pristine, well- manicured turf. Because of this, the industry needs to consider a redefinition of the maintenance standards for golf courses.

Leaders in the U.S. golf industry need to become aware of the different maintenance standards in the rest of the world, particularly Great Britain, where facilities are maintained for far less money than U.S. courses. While the greens are routinely good, fairways, teeing grounds and the rough are maintained at far lower standards.

An average 18-hole golf course requires approximately $770,080 per year in operating expenses to maintain the course.16 Add to that, capital requirements of at least

Two of three biggest challenges are centered on expenses: 16 2018 GCSAA Golf Course Budget Survey

108 $141,662, and that’s a total of $911,742 per year.17 To pay for maintenance and capital, if you charged $70 per round, you would need to have 13,025 rounds. That is before any profit and other expenses such as overhead, F&B losses, golf shop support salaries, golf cart leases, etc.

Let’s look at the capital cost for an irrigation system replacement, and the price is, give or take, $1,500,000, every 30 years. The golf course operator or membership would have to bank $50,000 in each of the 30 years to replace the irrigation asset. How about equipment? Let’s take just one fairway mower, which costs about $65,000, with an average life of 10 years, so that’s $6,500 per year. It comes as no surprise that superintendents are making do with irrigation systems and equipment that are well past their useful life!

The simple math is that the golf business cannot charge bargain-basement prices to supply a product that genuinely costs much more than is commanded.

No wonder each day, I read about golf courses going out of business or muni courses being managed by third-party companies only to eventually flounder. Even private clubs, which once thought that wealthy members would write a check to cover costs or depend on dues to make up the difference, are examining what it costs to provide a high-quality golf course.

Exercises

You got off easy last chapter from having a lot of “homework” to do with just creating your winning strategic plan. This chapter piles on with many exercises.

The exercises are summarized below and can be downloaded at jjkeegan.com:18

Step Description File Level of Explanation Retail Winning Format Difficulty Price Playbook Pricing OPERATIONAL TEMPLATES 3 Annual Labor Excel Inter- A superintendent engages in $50 $25 Hour mediate 40 separate tasks that vary by Estimate day, week, season or annually. This worksheet calculates the labor hours required annually to maintain a golf course.

17 2019 GCSAA Capital and Labor Survey 18 https://jjkeegan.com/winninggameplan2020/

109 Step Description File Level of Explanation Retail Winning Format Difficulty Price Playbook Pricing 3 Deferred Excel Entry Fourteen depreciable capital $50 $25 Capital components comprise a golf Expenditures course. This spreadsheet will help you determine the annual capital allocation that should be in reserve and the aggregate deferred component. 3 Equipment Excel Advanced There are 44 different pieces of $50 $25 Inventory equipment required to main- Master tain the course properly. This worksheet calculates the value of equipment on hand, capital reserves required, and components that should be acquired. 3 Equipment Excel Advanced The worksheet provides inputs $100 $50 Master – for the expected life of the Capital equipment, current age, and the Reserves needed capital reserve funds. 3 Golf Course Excel Advanced A comprehensive worksheet $200 $100 Maintenance with 16 Tabs to analyze all Budget aspects of maintenance opera- Business Plan tions. 3 Labor Excel Inter- Schedule recurring weekly tasks $50 $25 Expense and mediate and capital projects, providing a Scheduling forecast of labor costs. Forecast 3 Maintenance Excel Easy A golf course is managed on $100 $50 Task Matrix many levels. This worksheet with Expense helps determine the frequency Projection of the tasks, the labor required, and the projected costs. 3 Weekly Golf Excel Easy A quick tool to determine labor $100 $50 Course Labor costs for the week. Scheduler

To download these exercises, go to https://jjkeegan.com/winninggameplan2020/.

Concluding Thought “Most people can see what is and never see what can be.” — Albert Einstein

110 Chapter 6 – The Assembly Line

“To become different from what we are, we must have some awareness of what we are.” — Eric Hoffer

The Basics

Most golf courses struggle to accumulate sufficient cash flow to provide capital reserves. And most golf courses are resistant to change, and only modify something that will have an instant return on investment. We often ponder this resistance most golf courses display for change, and wonder if it is merely rooted in the fact that they are unaware of how to manage a golf course properly, but are embarrassed to admit it.

This chapter focuses on the operation of a course, and represents Step 4 in the “Winning Playbook for Golf Courses,” shown here:

For many, the golf experience they provide is merely a commodity, which is no different from a fast-food chain. Get people in and get them out.

111 Considering the entry door and the game, municipal and struggling daily fee courses offer golf courses that provide a diverse range of experiences for the customer, from basic to delightful.

For any golf course to be successful, there is a fundamental set of criteria that need to be present. Summarized below are the elements for a municipal golf course:

Scorecard: >80 points – Awe Awesome; 60 – 80 – Good; 40 – 59 – Iffy; 20 – 39 – Yikes!; Under <20 – Call Caretaker What a golfer sees when playing varies widely, based on the price point paid. What doesn’t change are the touchpoints they encounter on their journey of contemplating playing golf, visiting the course, and departing.

Game Time

An “assembly line” is one way to view the golf course experience.

The sun rises, the gates open, management and staff arrive, and another day begins. The golf course is like an amusement park that, from the entrance, winds the customer around a series of themes to a thrilling conclusion upon departure.

Every point of contact is essential. The design and layout of the clubhouse and pro shop define the experience likely to be encountered. The bag drop, obtaining a cart, the range, starter, golf course, cart return, and the restaurant and bar — all are elements that provide the opportunity to define the customer experience.

112 Creating a superior customer experience through consistent execution is the only way to guarantee survival in today’s competitive market.

Few golfers know how much hard work is needed to create that efficient golf operation. The counter staff plays infrequently and rarely has time to hit balls at the range before or after their shift.

Golfers race from the parking lot and hastily put on their shoes, perhaps not even stopping to tie them. They walk into the pro shop, looking at the staff person behind the counter and think, “They have such a life. They work at this beautiful golf course, play all the time, and are accomplished golfers. They have it made. What a life!”

What differentiates one course from another regarding a customer experience? Each touchpoint defines the total experience, and it starts with a golfer’s decision about which course to play.

In the previous five editions of this book, we have featured photographs of the best practices observed through each stage of the customer experience that capture the allure to the game. Click here1 to view pictures of the best practices spotlighted in the 2016 edition. One of the features of items previously highlighted is timeliness, as seen in the Labyrinth at Bandon Dunes Golf Resort in Oregon.

Mike Keiser envisioned this walking trail as a memorial to his good friend Howard McKee. As you enter the area, a message on a stone reads:

“The labyrinth is a metaphor for our journey through life. Its path leads toward an inner light, to the center of ourselves and the center of the sacred, one and

1 https://jjkeegan.com/2016-book-the-business-of-golf-what-are-you-thinking-best-practices-photo-album/

113 the same. Its direction, at times, is confusing, taking us around, and then back again. Yet, it is through this circular journey of discovery and growth that we reconnect where we once began.

In memory of Howard McKee, whose own journey through the labyrinth contributed to the vision and experience that is Bandon Dunes.

This is a replica of the labyrinth in Chartres Cathedral, France, dated 1194–1220.”

I would guess that less than 5% of Bandon’s visitors know the labyrinth exists, and far fewer have visited it.

What makes it unique? It resonates with our emotions as a human beings. The connection with another, a fond feeling, and respect — they all define our needs for socialization.

This need is universal — in the United States and worldwide. Wanting to ensure that this book reflects current trends, we have assembled a list of new best practices seen since 2016 in traveling to golf courses worldwide.

We have tried to emphasize that the “assembly line of golf” in the United States, and well as throughout the world, is consistent in defining the customer experience. Therefore, we have created a template that can guide golf course personnel in enhancing the customer experience on a scale that is appropriate for the green fee posted. (Click here)2

Step 1 — Motivating the Golfer to Select Your Course

What is the attraction to golf? Eric Anders Lang, a golf social media influencer, wrote a letter, “Dear Golf, I Love You.”3 The video posted on YouTube accurately captures the attraction to the game.

The ability to establish a connection with the customer creates a bond that is forged and is everlasting.

The Green Bay Packers, for example, provide a successful formula for establishing a great brand. The locker rooms for the Packers are in Lambeau Field. Across the parking lots, past a restaurant pavilion, and beyond the indoor Don Hutson Center, there is an outdoor practice field that the Packers use during the summer.

2 https://jjkeegan.com/winninggameplan2020/ 3 https://www.bing.com/videos/search?q=eric+anders+love+dear+golf&view=detail&mid=E- AB5F6137210FE761D33EAB5F6137210FE761D33&FORM=VIRE

114 There is a great tradition the Packers have established at the end of each training camp practice. Kids line up outside the gates of the practice field with their bikes. Packer players select a kid’s bike and ride it back to Lambeau Field with the kid jogging along next to the player. It is humorous to see a 300-pound defensive lineman riding a tricycle. They frequently stop and sign autographs for the fans.

What an excellent way to connect to the community and make a kid a lifelong Packer enthusiast. It makes me, a diehard Broncos and Eagles fan, want to root for the Packers. Shown here are kids chasing Packers back to the locker room:

Wisconsin’s Thornberry Creek, owned by the Oneida Indian community, has a licensing agreement with the Green Bay Packers. Painted on the hillside of the first hole is the team’s logo, and the pro shop has a plethora of Packer memorabilia. Some staff comment they have seen quarterback Aaron Rodgers, who lives down the street during the season, play at the course on occasion.

Creating a theme that motivates a golfer to seek the experience is compelling. For example, at The Cowboys Golf Club in Dallas, Texas, the clubhouse features the trophies from the football team. Named on each cart is a player in their Hall of Fame, and tee markers explain important events in the history of the club. All of these tributes make the golf course a must-play experience.

The Texas Rangers Golf Club across town opened in 2019, and its clubhouse will become the Hall of Fame for the Texas Rangers baseball team. The City of Arlington, in partnership with the Texas Rangers, integrated the concept of baseball into the golfer’s playing experience, as shown here:

115 I can hear the complaining now. The ability to affiliate with a national sports franchise is limited. Still, the ability to create a unique experience along with the assembly line of golf from front entrance flowers to tee markers is not.

Golfers play 80% of their rounds within a ten-mile or thirty-minute drive from their home or business. In many markets, choices are abundant.

Though many golfers have a “home course,” they are often influenced by other factors, such as a course’s brand image, an invitation from a friend, or just the desire for a new experience.

What is unique about your golf facility that makes it compelling to play? Until you can answer that question, your customer experience operation is not focused. And spare me, don’t think your “outstanding customer service” is that different from that down the street. We have a natural bias to believe our efforts our superior to those of others.

Step 2 — Making the Reservation Process Seamless

The customer’s first experience with the golf course usually comes when reserving a tee time. In most instances, the customer is put on hold — not a great first experience. As technology has evolved, nearly all golf courses provide online booking via a website or a mobile application.

Many golf courses do a fabulous job at booking tee times, but none that exceeds the quality of the customer experience at Bandon Dunes.

116 These written confirmations are compelling because they: (1) provide details as to time and cost of pending reservations and when they can be confirmed, (2) provide the opportunity to upsell, and (3) provide a link for directions to the facility.

When we spoke with the reservation agent at Bandon Dunes Golf Resort, we asked how many reservations are booked without any changes, she chuckled and said, “Less than 5%.” Thus, the importance of email confirmation.

Providing all the details of a reservation, including credit card guarantees and cancellation penalties, is vital. One of the unique features offered in the reservation process is information about the cost of shipping one’s golf clubs to the resort, if desired, as shown here:

117 Can you imagine the complexity of booking a golf trip? PerryGolf does it flawlessly, providing the customer all the detailed information required on every aspect of the journey as shown here:

Clear communication with the customer is essential.

Step 3 — Where Is It? How Do I Get There?

How many times have you wanted to fire Siri? One of the great frustrations in playing golf at a course for the first time is finding it quickly and easily. Notwithstanding the use of Google Maps, MapQuest, or Siri, there is a high probability you will circle some golf courses for 10 minutes, trying to find their entrances. Thus, having some highway signage is vital.

Sand Valley Golf Resort in Nekoosa, Wisconsin, is in the middle of nowhere, though only a three-hour drive from 66 million people. Driving for a bit from Madison, Wisconsin, the sign pictured here was comforting as Siri initially took us to the back end of the property where there was no entrance.

118 The use of directional signs is not only a U.S. custom but can also be found in other countries, as shown above in Siem Reap, Cambodia, at the Nick Faldo-designed Angkor Golf Resort.

With a tee time reservation in hand, the thought of being late because you got lost is aggravating. The golfer’s goal should be to arrive 45 minutes before the scheduled tee time to practice, putt, and hit some range balls, especially when the golfer is playing a high-end daily fee course where the green fee is north of $100. Removing that angst from the golfer by providing directional signs creates comfort. Also, these signs serve as “advertisements” for the golf course for every car that passes.

Step 4 — First Impressions Offset A Few Hiccups

The entrance to the property creates another first impression. From attractive entrance signs welcoming golfers, flower gardens that are well-maintained, directional signs for the bag drop, parking and clubhouse entrance, to staff in uniform with name tags — all these indicate the experience is likely to be a good one.

Can there be two golf courses further apart geographically than Buffalo Ridge near Springfield, Missouri, and the Phokeethra Country Club in Cambodia? They use the same marketing technique to create a very favorable first impression choreographed to their culture and clientele.

119 Golf courses that have a theme and execute that theme throughout the property always heighten the customer experience.

Another opportunity for great marketing and brand recognition comes from the creation of a fabulous logo. Can you think of any course with an excellent logo? Think of Pebble Beach with the Cypress tree and Kapalua with the butterfly blended into a pineapple.

The atmosphere upon arriving sets the customer attitude for the day, as shown here:

Part of what makes Bandon Dunes so unique is “Shoe,” the greeter. Hail-fellow-well-met, and he was KemperSports “Employee of the Year” very recently.

120 As for the great experience, the arrival at Shanqin Bay in China sets a level of expectation that is amazingly surpassed, from the general manager to the course staff to the fine dining. There is a reason this was one of the Top 100 golf courses in the world. Every course in Asia features exceedingly gracious caddies, as shown above at the Montgomerie Links Golf Course in Danang, Vietnam.

One can imagine the surprise when visiting Van Tri Country Club in Hanoi, Vietnam. The entrance to the golf course is a flower garden in the colors of the country:

Staging the experience is an essential element to a successful and profitable golf course.

One of the excellent advertising marketing opportunities that are often lost is putting a bag tag on the arriving golfer’s clubs. Not only does it make each golfer feel special, but it also provides a “souvenir” of the experience. It’s excellent “free” advertising. The average golfer plays four to seven different courses a year. Bag tags beg the question: “How was your experience there? Is it a must-play course?”

Step 5 — The Ambience and Culture Resonate

As one approaches the clubhouse, an impression is made that should be consistent with the entrance to the property. The stunning architecture at Haesley Nine Bridges near Seoul Korea, a Platinum Club of the World, immediately symbolizes that status, as shown here:

121 The roof of the clubhouse is one of “The 10 Most Beautiful Ceilings in the World,” the award highlighted as you enter the locker room. From the history vault to the artwork, to the GEO-certified banners, to the remote-controlled golf carts and even the logoed coffee takeaway cups, every detail has been meticulously planned to provide the member with an exceptional experience.

A picture is worth a thousand words. Upon entering the clubhouse at the famed Ayodhya Links in Bangkok, Thailand, you are meet with exceeding kind hospitality of the owner, Mr. Pitak Intrawityanunt, former Deputy Prime Minister of the country. An impressive display of the Club’s recent history — from tragedy to success awaits.

122 The entire experience at Ayodhya Links is exceptional, as is the cuisine, especially the fantastic Phad Thai noodles.

Golf has so many unwritten rules regarding etiquette and proper decorum that most players have a feeling of apprehension the first time they visit a course. Greeting guests with warmth alleviates that anxiety and makes them feel welcome and refreshed. One is drawn to a photograph of Nelson Mandela, Ernie Els and Tiger Woods when entering the clubhouse at Fancourt in George, South Africa.

The caption in the picture is very poignant:

“Sports has the power to unite people in a way that little else can. It can create great hope where once there was only despair. It breaks down racial barriers. It laughs in the face of discrimination. Sports speak to people in a language they can understand….” — Nelson Mandela

123 At Hamilton Golf and Country Club in Ancaster, Canada, the clubhouse is a history museum, where one could easily spend 30 minutes looking at the fabulous moments in time that have occurred where you are standing, as shown here:

One merely needs to visit their website (click here)4 with embedded links to YouTube videos and a Facebook page to see how history permeates their entire culture. You’ll see pictures from the early 1900s to celebrations of the wins of Jim Furyk and Rory McIlroy in the Canadian Open over the last several years.

Every golf course in the world is unique. The question is, how do you differentiate yourself?

Step 6 — The Clubhouse: Once Inside

The reader is probably thinking: “The examples presented above are unfair. They don’t represent my course or anything I could achieve.”

At Fossil Trace municipal golf course in Golden, Colorado, the Director of Golf, Jim Hajek, PGA, has captured the essence of the club’s name in one traverse from the entry door of the clubhouse to the Pro Shop, as shown here:

124 There is a world map noting the state and/or country where visitors have come from, and is a novel and unique idea every golf course could implement. But at Fossil Trace, the history of the theme of the course can be celebrated by tying it to the dinosaur tracks and palm fronds discovered during construction. There are also pictures from the left of the 12th hole by the green, highlighting the palm fronds embedded in the rock from centuries ago.

If entering the clubhouse creates an anxious moment, stepping into the pro shop is even more intimidating. A lot of this phobia stems from the attitude of the golf staff. Greeting guests with, “Welcome, glad to have you visiting with us. How may I help you?” anxiety will evaporate like morning dew. But too many golf employees are unwelcoming. Many women comment that they feel like they are an imposition on the young male staff pounding the computer at the check-in station.

One of the first questions one might ask in today’s evolving dress standards is, “Am I properly attired?” Nearly every golf course in Asia has pictures of what is acceptable and what is not, including detailed images of preferred shirts, trousers/shorts, socks, and shoes for both genders. The pictures leave no ambiguity as to acceptable attire— well-designed pro shops evidence one of the early clues about dress standards. From the impressive array of ladies’ clothes in South Africa at Fancourt to a bevy of logoed merchandise at Teeth of the Dog in the Dominican Republican or the Muscat Hills Golf Club in Oman, a neatly and resourcefully arranged merchandise display soothes one’s angst.

125 Lost Tracks in Bend, Oregon, features one of the best gestures of warmth displayed within a pro shop. Brian Whitcomb, the owner and former president of the PGA of America, has the philosophy that a golf course is his home, and treats those who visit with the same respect as those who visit his house. Brian loves candy. At the exit of his pro shop, he offers his “house guest” a big vase of Tootsie Rolls to select from. The total cost of giving away candy? Brian indicated it was less than $200 per year.

Making the pro shop warm and welcoming is an understandable challenge. Undertaking a repetitive task 300 times a day is annoying to nearly everyone. How can you make what a repeated experience enjoyable for the staff? At Chateau Whistler, Canada, there is a sign that reminds the team about their role in serving the customer. As they enter the pro shop from the employee area, it reads, “You Are Entering a Guest Area; Please Remember to Smile, Make Eye Contact, and Use an Appropriate Greeting.” That sign serves as a useful and tactful backstage reminder that the staff of the golf course is on the “world’s stage.”

Step 7 — Chariots of Fire

The most enjoyable way to play golf, by a wide margin for many, is to walk with a caddie. Unfortunately, for most, it is cost-prohibitive, adding $100 plus tip to the round, before considering the availability of labor.

Because wages in Asia are low in comparison to most of the world, caddie training programs are in abundance, as shown here (on the left side of image):

126

Creativity is always pleasant to see and experience. At the esteemed Royal Melbourne Golf Course in Melbourne, Australia, a former superintendent developed a novel way for those who prefer to walk with a hand cart, to assist in the maintenance of the golf course. Affixed to the bottom of the cart is a “sand canister.” The golfer merely places the canister over their divot and presses the foot pedal, shown above on the right.

Both for their economic benefit to the golf course and their convenience to the golfer, golf carts have been de rigueur at nearly all golf courses. Carts provide mobility, giving some who otherwise might not play the game the opportunity to enjoy the sport.

Introduced at some facilities, primarily resorts during the past four years, golf surfboards (shown below) appeal to a younger age segment with an innovative golf experience.

127 A different approach to carts is seen at Naruo in Osaka, Japan, and at Haesley Nine Bridges in South Korea. The golf carts are remote-controlled, as shown above. Here Simon Holt, a Golf Magazine panelist with the remote control in his hand, is driving the cart with Texas golf course owner Cathy Harbin, PGA, LPGA, in the back seat.

Once the price of the green fees exceeds $100, any golfer will surely expect water, ice, towels, and tees in the holders as essential cart services and provisions.

Although GPS has been a fixture in the golf industry since the early 1990s, the technology has advanced remarkably since those days. The golf course GPS, which began life as a toy, has evolved into a business tool that some courses find indispensable. The technology now assists with pace-of-play, fleet rotation, and customer-to-pro shop communications.

The introduction of advertising on the GPS lowers costs for an expensive technology with annual costs exceeding $50,000. The course and the GPS vendor split the advertising revenues after paying an agency fee.

GPS is almost “standard” for golf courses whose green fees exceed $100, especially those that are resort-oriented. Unfortunately, GPS is of limited value on golf courses that require golf carts to stay on the path. Carts on paths only increase the length of the round and create golfer frustration. However, GPS, when used correctly, enhances the golf experience by allowing the golfer to select the proper club quickly, order food, and record their score.

Step 8 — Setting the Tone: Warming Up

A golf course that has a well-designed range and short-game area can be a pleasant addition to the golf experience. At the range, having golf balls aligned, tees available, and a bucket of water and a towel to clean your clubs, all add to a pleasant golf experience. Such is the case at the Broadmoor Resort in Colorado, Springs, where two individuals “walk the range” and clean the golfers’ clubs while they practice.

At the home of golf, St. Andrews, the importance of pace of play is first subtly communicated to the golfers by the imprinting on the range balls 3:57, which notes the pace of play goal. Pebble Beach also stamps its balls with the desired pace of play. The time on its golf balls is 4 hours 30 minutes, which says something about the different cultures. It makes you wonder how many more people would play if a round took less than 4 hours.

It is always a mark of distinction when a golf course makes an effort to indicate accurate yards to the various flags on the range based upon a range finder that a staff member uses every day to measure distances from the hitting stations.

128 The University of Minnesota’s Les Bolstad Golf Course adds humor to the range experience, using logos of Big 10 rivals as range targets, with an invitation to, “Stop by to take a swing at our rivals!” (Shown above on the right.)

Diamante in Cabo San Lucas, Mexico, has one of the best range experiences. Each foursome is grouped, with tables fully stocked, i.e., sunscreen lotion, tees, divot repair tools, and your choice of music: Sade, Sting, Bono, etc.

The quality of all ranges directly correlates to the quality of the turf. The signs below are very informative in guiding the golfer at the range at Michigan’s Forest Dunes Golf Course and the prestigious Saucon Valley in Pennsylvania:

The ideal golf range has the depth that players are always hitting from grass: 50 yards deep and 30 stations wide for a facility averaging 30,000 rounds per year.

129 Step 9 — You’re Off and Running

Can I see your receipt? Where are the other players? I need to see their receipts now, too. You have to play in 4 hours and 30 minutes. Keep up the pace. Keep your carts on the cart path. Wave to the group in front of you on Par 3s. Fix your ball marks. Replace your divots. Rake the bunkers. And oh, by the way, have fun.

Don’t you wonder why a golf course puts its most inexpensive labor (likely a volunteer who is working for perhaps minimum wage and for the opportunity to play golf for free) as the key customer contact before teeing off?

Imagine if you were to hear, “Welcome, it’s great to have you here today. Thank you for coming. You’re going to have a great time. This is an exciting course. The architect is ____. His philosophy was _____. Here are my suggestions for your consideration: ____.”

The opportunities to make favorable impressions are endless. So why do so few courses avail themselves of the opportunity?

As one leaves the clubhouse and proceeds to the first tee, signage, such as that shown here from Nine Bridges, Jeju Korea, or Enhance Anting, in Shanghai, China, set the mood for the day and define the course conditions to be experienced:

When reaching the first tee, another opportunity presents itself to the golf course management team to define the encounter that is likely to occur. When reading the sign (shown below) at Cherry Hills, knowing that you are standing where Arnold Palmer drove the green, doesn’t that make you want to pull out your driver and ask, “How good am I?” and compare your result to that of a legendary golfer.

130 Teeth of the Dog at Casa de Campo Resort in the Dominican Republic may be Pete Dye’s most famous course due to the number of holes on the ocean. Baltustrol also features where Jack Nicklaus hit a one-iron on the 18th fairway during the process of securing a victory in the 1967 U.S. Open. While the essence of the game is social, golf is unique, in comparison to every other sport, where the golfer is playing on the same field as the very skilled professionals.

Thus, the opportunity to define the culture that emotionally resonates plants a seed of loyalty to a course in a golfer’s mind. For example, as one approaches the first teeat Idaho’s Circling Raven, the Coeur d’Alene tribe, the Schitsu’umah, talks about the history of their tribe and that, “Since time began, we have shared our wealth and welcomed strangers. Here, today, we welcome you,” as shown here:

131 What does your course do that welcomes golfers and makes them feel that today’s rounds are going to be special?

Step 10 — 18 Tees, 18 Fairways, 18 Greens: The Thrill Ride

The golf course is like a great book. It excites in the beginning, engages throughout, and disappoints and brings heartache when least expected. As the end approaches, we hope for a fabled ending, and even if the fable isn’t to be told on that day, the golfer, upon completing the round, immediately wants more.

Golf courses are, in essence, history museums. At West Point, there is a plaque at each hole describing a battle in American History.

Not only is the round fun, but it’s also highly educational. This was also accomplished at Leopard Creek on the edge of the Kruger Game Park in South Africa. As you cross the bridge to the golf course, one can see the hippos in the river, along with the crocodiles. There used to be giraffes freely roaming the fairways. However, they were recently removed as a protection for the golfer, since they might attract other animals seeking a meal.

On each tee, there is a bronze statue of a leopard. As the round evolves, each tee depicts the leopard’s chase of a gazelle until, ultimately, they capture it on the 18th tee, as shown here:

132 Golf courses are entertainment parks that compete against outdoor sports, bowling alleys, movie theaters and sports bars. Each course should tell a captivating story. None achieves this goal more than the Hills Golf Club in Arrowtown, New Zealand.

Owned by the largest jeweler in the country, this exclusive private club allows a properly introduced guest to play their fantastic course, albeit at $1,000. It is worth it. Every hole has a unique architectural sculpture on it. Shown here are two of my favorites:

The fireflies accentuating the water hazard on the 6th hole are robust with many colors. What is haunting are the wolves about to attack the Hun, found on the right side of the 18th hole. Crazy as it seems, it was scary to walk about the wolves before hitting the

133 second shot to the green, which was so much easier after one’s fear subsided. For a picture of all the architectural pieces at the Hills, click here.5

When you think you have seen it all, then comes the passage/cart path known respectfully as the “Jesus Bridge” at the Santapazienza Golf Course in Sao Paulo, Brazil. Faced with a routing problem to best utilize the land between theth 6 hole and the 7th tee, the Malzoni family had the idea of building the following with the guidance of Tom Fazio. Click here6 to watch this fabulous story of the Malzoni family.

From afar, it looks like the golf carts are “walking on water.” The sense of humor of the family is marvelous. The mailbox seen in the right-hand picture has a sign that states, “Suggestions for the Owner — Leave Here.”

What is your facility doing that is so compelling that it endears the member or a golfer, motivating them to return?

Step 11 — Do I Really Have to Go?

Is there anything more disgusting than a filthy bathroom? Is there anything more disgusting than a golf course where you pay $78 in green fees and are required to use a porta-potty, or worse, one not cleaned recently?

A golf course restroom should not resemble a Tijuana gas station.

5 http://www.jjkeegan.com/?ddownload=86163? 6 https://www.golfchannel.com/video/rio-olympics-tom-fazios-brazil-course-santapazienza

134 One of the biggest turnoffs for females to play golf is the bathroom facilities, eschewing porta-potties, and comparable inferior facilities.

Some recognize the importance of bathroom facilities. The on-course restrooms at Red Sky Ranch in Vail cost nearly $1.5 million each. Whistling Straits hides its bathrooms within the dunes on the course.

The Brickyard Crossing, with several holes inside the Indianapolis 500 race track, and Buffalo Ridge in the Ozarks play expertly into the theme of their facilities in providing rest stations, as shown here:

At Yas Links in Adu Dhabi, the innovative staff inserted iPads above each of the urinals. Via the data network, golfers are informed about the latest events at the facility with a set of rotating messages, easily changed by management.

Clean and proper bathrooms are a small investment for substantial return in customer satisfaction.

Step 12 — Exit Stage Left?

What seems so simple can be such a confusing process for the customer. Upon completing the 18th hole, do I drive the cart to the car and unload? Are the carts even allowed in the parking lots? If the cart is damaged in the parking lot, whose liability is it? If I return the cart to the clubhouse, is there an attendant on duty to clean the clubs? If the round cost more than $200, should I tip the attendant or presume that it is included in the green fee?

135 The process can be simplified for the golfer with signage from the 18th hole directing the desired flow of carts and with a clean staging area with logical “parking” positions for them. A tip jar sends a clear message as to whether gratuities are appropriate. More than half the golfers in America do not tip. That lack of response from the golfers could reflect their frustration with their game, their desire to depart quickly, or the realization that their clubs won’t be cleaned very well. Most golfers have experienced all of these.

What if an attendant asks, “How was your round? What could we do better to heighten your customer experience?” Rarely is that second question asked, but what better time is there to get a snapshot of the golfer’s experience.

The attention to detail at the end of the round is always appreciated. At Thai Country Club in Bangkok, Thailand, they inventory the golfer’s clubs before and after the round. At Nikanti Golf Course, also in the suburbs of Bangkok, as one enters the restaurant, there is an electronic survey to measure your experience for the day.

I am always amused by Americans who think that the customer service in foreign countries is inferior. It is generally very superior to that offered in the United States.

When the golfer returns the cart and gathers belongings, the course has one last opportunity to make a favorable impression. It can be a cart return attendant who has cool, moist towels ready for the golfers as they approach the staging area. That is a friendly customer service gesture!

136 Step 13 — Rub A Dub Dub – Time for Some Grub

No aspect of a golf operation is as scattershot as the food and beverage experience.

Some courses confuse food service with selling implied sex masquerading as “marketing.” At these courses, skimpily clad ladies parade around the course in beverage carts, offering a beer that is often warm and coffee that is usually cold.

Other golf courses provide grilled brats and hamburgers at the turn. Is there a better smell to stimulate a golfer’s appetite?

Concerning restaurant dining, Colorado’s Castle Pines Golf Club has excellent milkshakes. Turtle soup is a staple at the Pine Valley Golf Club in New Jersey, and Southern cooking is available at Sage Valley in South Carolina. Fish chowder is in the house at the turn at Caledonia Golf and Fish Club on Pawleys Island, SC. Fish tacos are almost obligatory at the Cove Club (formerly the Ocean Course) at Cabo del Sol, Baja California Sur, Mexico, as are waffles with whipped cream at Bro Hof Slott in Sweden.

The key to a thriving food and beverage operation is to have sufficient tournaments and a catering service to create the volume necessary to provide the economies of scale in a food operation.

Who isn’t hungry when viewing food expertly displayed, as shown here:

Golf facilities, especially a private club or resort, also have the opportunity to offer other activities for non-golfing spouses. For example, guests visiting the Broadmoor in Colorado Springs and staying at their very special Cloud Camp, have the chance to learn the secrets of the Broadmoor chefs. With vodka tonic in tow, this guest had a lesson in verti-cutting carrots and assisting in making the soup.

137

Step 14 — A Luxury Once Experienced Becomes A Necessity

The process of creating the perfect golf experience for the customers seems never- ending. Like football, in which every play has the theoretical possibility of resulting in a touchdown, golf courses implement operational plans in the form of numerous make-or- break moments.

For an impressive experience in customer service, Big Cedar Lodge in Branson, Missouri, set the bar very high. When checking into the well-appointed cabin, the guest was greeted with the following supplemental amenities:

138 With the recent opening of a Coore-Crenshaw and Tiger Woods golf course, Big Cedar Lodge has established itself as a marvelous go-to resort. It has such a diverse set of amenities that everyone, from families with little kids to a foursome of friends, will have a fabulous time determined by the standards of excellence created by Steve Friedlander while serving there as General Manager and Director of Golf Operations. Unique experiences like this differentiate. At the Ernie Els Winery in Stellenbosch, South Africa, one can enjoy lunch and sampling wines, but the centerpiece is a room highlighting his marvelous career with many of his trophies on display:

This kind of creative thinking meets and exceeds the expectations of customers, creating valued memories and the likelihood of more guests wanting to return. To see a bevy of other inspiring ideas, go to www.instagram.com/jjkeegan, where the best practices seen around the world are featured. Can every golf course offer such marvelous experiences as displayed in this chapter? Obviously not. But to merely throw in the towel, citing lack of capital or the lack of willingness to explore options, is a formula for failure. Your customers, in our affluent society, are traveling hither and yon, coming across these novel and superlative occasions. As the expression goes, a luxury once experienced becomes a necessity. Upon returning home, they will be looking for comparable value- based experiences. Will you be meeting the future needs of your patrons, which raises the question of what will golf and country club life look like in ten years?

Exercise

If you have wisely subscribed to the templates, print the Secret Shopper Service Checklist and undertake a self-evaluation of your level of service, comparing it to the fundamentals any course may implement.

139 Step Description File Level of Explanation Retail Winning Format Difficulty Price Playbook Pricing 4 Secret Excel Entry On the assembly line $25 Free Shopper of golf, 111 customer Service touchpoints contribute Checklist to the player’s perception of value. This checklist is a guide to measure the experience provided at your golf course.

If you want to know how you are really doing, with the filters of your own bias removed, select three foursomes: a family with children, a ladies’ group and a men’s group. Have them “secret shop” your golf course, reimbursing their green fees and meal costs. While it may cost you upward of $300, the insights they will provide will be invaluable.

In the interim, test your perception and biases with a self-evaluation of your facility, based on the following chart:

Concluding Thought “The guest sees more in an hour than a host sees in a year.” — Polish Proverb

140 Chapter 7 – The Price is Right

“Where we direct our mind is where our thoughts will take us, our thoughts create an emotion, the emotions define our behavior, our behaviors define our performance.” — James Kerr

What is Wrong With This Picture?

The vision is set, and investment in assets has been made in a delightful golf course and clubhouse. And programming along the assembly line of golf is perfectly arranged to create an enjoyable outing for members, guests or public golfers.

It should be easy now, right? Wrong. Unless you can receive an appropriate fee for the services rendered, which creates not only positive cash flow but also generates sufficient capital reserves, at some point in time, service levels will deteriorate, and capital assets will depreciate.

The formula for financial success is clear: value = experience – price. Customer loyalty is created to the extent the experience equals or exceeds the price. If the price exceeds the experience, customer attrition occurs.

The golf industry massively undercharges for the consistent, quality product it offers. Let’s compare it with other entertainment and recreational sectors.

Featured on the Fairmont Maui Willow Springs Spa site is a picture of an individual getting a massage. A 55-minute massage starts at $180. Even at Massage Envy or the plethora of comparable boutiques, the cost of a massage nears $90 with the tip for 55 minutes.

Coffee at the Four Seasons reportedly costs $12. Dinner at the better restaurants for two now costs >$150 with one glass of wine for 90 minutes of dining. To ski Vail, you will fork over $209 for six hours. A three-hour NFL football game will cost >$100, as will better seats for NBA basketball, NHL hockey, or MLB baseball. Tickets for a rock concert often exceed $200 for general admission. Topgolf averages over $35 per hour per person when including food. Any kind of grande or venti beverage at Starbucks costs north of $5.

141 The golf experience takes four hours and averages a posted price of $49 with a cart. The average green fee in the United States is $36 – roughly $7.55 per hour.

Why is the golf industry unable to command a fair and just green fee?

The 2018 Super Bowl of the New England Patriots vs. the Philadelphia Eagles was electric for the offensive show presented. The defense was mostly missing. It struck me watching that game that pricing in the golf course industry is predicated solely on playing defense.

Fearful of losing a round, golf course owners are discounting, failing to recognize the value of the marvelous experience they create, and living in angst that any upward movement in prices will cause a massive exodus of customers. They cite supply exceeds demand and the competitors’ predatory pricing. In municipalities, Golf Advisory Councils, meant to provide independent feedback, become self-serving, lobbying for the protection of existing rates and their preferred access. City Council representatives, nearly all of whom are volunteers, are more interested in appeasing their constituents and kowtow to their whims and desires, instead of using responsible fiscal governance.

The cycle of decline is shown here:

There is a reason that municipal and daily fee golf courses only generate $1.2 million, compared to private clubs whose revenue, based on PGA PerformanceTrak, is $4.7 million or averages $6 million, according to Club Benchmarking.

It is our opinion, like a buoy in a lake, prices must rise across the entire industry for golf course owners to prosper and for all boats to float.

142 Illustrated here are the advantages of raising prices vs. discounting:

Number of Ad- Financial Decrease Rounds That Decrease in ditional Rounds Increase Advantage Can Occur to Generate Price Required to Offset Price of Increas- the Same Revenue Discount ing Rates 5% 5.26% 5% 4.76% 0.50% 10% 11.11% 10% 9.09% 2.02% 15% 17.65% 15% 13.04% 4.61% 20% 25.00% 20% 16.67% 8.33% 25% 33.33% 25% 20.00% 13.33% 30% 42.86% 30% 23.08% 19.78% 35% 53.85% 35% 25.93% 27.92% 40% 66.67% 40% 28.57% 38.10% 45% 81.82% 45% 31.03% 50.79% 50% 100.00% 50% 33.33% 66.67%

Let me explain. If a course decreases its price 25%, i.e., pay for three and get the fourth player free, they need 33% more golfers to break even. Offer a two for one special, and the golf course would require 100% more golfers to offset that egregious and frequently offered discount. There are not that many golfers waiting in the wings to offset the discounts accorded through a hoped increase in rounds.

Conversely, if a course would increase its rate by 50%, they would generate the same revenue with 33% fewer golfers, and the golf course would be in far better condition.

The logic within the numbers advocates that golf courses should raise prices if, for no other reason, the rack rate is rarely achieved. The typical golf course’s revenue per round is a paltry 60% of the weekend rate.

Many golf courses have more than 75 different rates that vary by day of the week, time of day, day of the year, and age of the golfer. There is no more subjective area than green fees.

A few golf course owners, particularly those at newer facilities, establish the green fees based on cost plus desired return on investment. The expenses are estimated, the required debt service coverage calculated, and the desired investment return projected. The green fees are set based on the aggregate total divided by the projected rounds. This sort of pricing might pacify the banker, but it does nothing to assure that the golfer receives value.

143 Others set the green fees based on market value. This process is the “feels right” method. Either the prices are adjusted for inflation from the prior year, or perhaps a sampling is taken of comparable facilities, and a rate is chosen that feels competitive. The result is that most golf courses base their prices on last year’s rate, with perhaps a small $1 increase, or matching a competitors’ rates.

Still, others base their fees on some subjective perception of the value of the golf experience. How else could one justify the difference between a golf course charging over $595 per round and one that costs less than $30? Both courses are between 6,000 and 7,400 yards, have 18 holes, and take roughly 4½ hours to play.

That substantial difference would have to be justified based on the location of the course, conditioning, strategic shot values, time of the year, surrounding scenery, the architect, or championships held at the facility. These are the factors to consider when establishing a green fee.

There is a formula, often invisible to the owner, for what golfers are willing to pay.

Eliminating the Guess Work

The proper green fee to post is a combination of the following components:

• Slope rating • Strategy • Conditioning • Turf Texture • Ambiance • Amenities • Demand • MOSAIC Profile

How do these elements combine to determine the correct price? We have tested our proprietary formula on over 400 golf courses with stunning accuracy. To determine the fair market value of your green fee, you merely need to check the appropriate boxes in each of the eight sections.

144 Shown here is the Customer Value Experience Template summary and Step 1 – Slope:

It is our opinion, the higher the slope rating, reflecting the vast number of hazards and challenges to be faced by the golfer, the higher the cost to maintain the golf course. The length of the golf course, the number of water hazards, to bunkers, to trees, all influence the cost to maintain a golf course. To play a flat municipal golf course short in length with nominal risks is an entirely different experience than a championship bunker- strewn, lake-filled, tree-lined golf course.

What makes golf such an individual sport is that each course is unique. A course varies widely by the strategic options offered, the conditioning, and turf texture. While we all may have our personal preferences, can golf be purer than playing on bentgrass tees, fairways, and greens? Each of these elements influences the price.

145 Shown here are options for strategy, conditioning and turf texture:

But the golf course is not the only component that the golfers are seeing and sensing during their rounds. Aspects such as pace of play have a significant impact on a member or golfer’s satisfaction.

At Quaker Ridge, a fabulous private club in the New York suburbs, members get a warning letter if their round is over 4 hours and 20 minutes. The worst day for the pace of play? Friday, when playing golf during the summer has many guests enjoying the unique experience.

Courses like the Cowboys Golf Club in Texas have a policy of unlimited food and beverage integrated into the green fee. For that component, management embeds an additional $35 into the green fee. But alcoholic drinks and cigars are not included.

146 The choices for Step 5 — Ambience and Step 6 – Amenities are displayed here:

There are two other elements that we believe impact establishing a proper green fee for the majority of municipal and daily fee golf courses: demand vs. supply within a 10-mile radius of the facility and the MOSAIC profile.

Why? If demand exceeds supply, think of a large metropolitan area, where golfers are willing to pay a premium for access as tee time access becomes more challenged. Conversely, if the tee sheet is wide open, particularly on the weekends, the golf course operator is likely, incorrectly, to discount the rate to attract any golfer hoping to gain a few incremental rounds.

The MOSAIC Profile Index also impacts the green fee. If the Index is a negative number, the residents near the golf course are not naturally inclined to play golf, primarily from lacking the financial resources. Conversely, if the Index is a very positive number, golfers have the attitudinal behavior and disposable income to pay a premium to play golf. Shown here are these factors:

147 What about a private club? One should not consider the per-round cost as justification for joining a private club. If a member calculated the per-round cost of their dues, assessments, and supplemental spending, one would never join a private club. Per- round costs, presuming 30 rounds per year, would start at $150 per round, likely average $275 per round, and at some exclusive clubs, the price per round cost would be near $1,000.

The value of private club membership comes with an abundance of amenities, including but not limited to attentive personal service, improved course conditions or usually a more challenging golf course, locker rooms, business networking opportunities, a robust social atmosphere, extensive programming, diverse recreation outlets from tennis courts to swimming pools to physical fitness facilities, and several dining options.

Could the above “exercise” be leveraged to determine the value of each round? We believe if the answer derived was multiplied by 300%, it would roughly estimate the cost per round of joining a private club. BONUS

Are you curious about what the proper “experience-based” green fee is for your facility? Download the template at https://jjkeegan.com/winninggameplan2020/. If your course is located within the United States, we will email you within 24 hours the demand/ supply number and your MOSAIC profile index for your facility so that you might complete the exercise. Those two numbers alone are worth $250 as components of the geographic local market analysis.

148 Step Description File Level of Explanation Retail Winning Format Difficulty Price Playbook Pricing 4 Customer Excel Entry Most golf courses determine $100 $50 Value green fees based on historical Experience rates or what their competition is charging. This exercise will provide an estimate of the correct green fee based on the experience created at the facility.

If the green fee that you charge is lower than the exercise recommends, it is likely to reflect on how one has discounted the value of their course to compete in the local market. I would suggest that you should adjust your rate to reflect the fair market value by ‘lifting the tide’ and raising prices in your market. Shortly after that, the competitors will adjust their prices, also.

Here is One Quick Thing You Can Do to Increase Revenue

What I enjoy about travel and being a keen observer of life are the unique approaches various businesses adopt to solving a problem that is shared by many.

Desert Botanical Garden in Phoenix, AZ, and Frank Lloyd Wright’s Taliesin West home in Scottsdale have a fascinating approach to senior rates. Can you find a senior rate at the Desert Botanical Garden below:

149 What about the senior rates at the Frank Lloyd Wright Taliesin West tours:

Could not find the senior price, could you? Is there a lesson here for golf course owners? First, whoever established the senior rate at 55 years of age should be shot — as the expression goes.

Second, with 50% of the rounds played by those over 55 years of age, the golf industry should eliminate senior rates. Golfers in this age group are the wealthiest segment in the U.S. population, and despite their cries to the contrary, they can afford it. The reason they have so much money is that they have deceived the naïve golf course owner into thinking if the course raises the green fee rate, the golfer won’t be able to avoid it. Spare me. Golf course owners, particularly municipalities, are under no ethical obligation to financially underwrite the recreational leisure of individuals.

Unfortunately, senior rates are unlikely to be eliminated.

Why? Like how most golf course owners utilize GolfNow, Supreme Golf, or TeeOff because their competitors are using it; if one course discontinued their senior rate, they would fear an exodus of golfers to other courses that continue to offer a discount. Since the discount a senior receives is usually about 27% of the rack rate, it would be impressive if a golf course owner took the gamble in hopes of raising revenue.

What is the alternative? The golf course should establish the age to qualify for senior rates at 67 — “the full retirement age” individuals in the United States qualify for Social Security. And, they should make the change all in one fell swoop rather than incrementally raising the age by several years. Rather than making annual increases,

150 adjust the age to the correct level and rip the bandage off the wound to endure the pain and suffering only once.

While You Are At It

The next policy change a golf course should consider is eliminating season passes. They are a terrible idea. Realizing that golf courses are unlikely to remove these programs, pricing the season pass correctly is essential.

The reasons for use are long; the justification is short. Courses explain the need to sell season passes to accelerate cash flow coming out of the winter season when the coffers are lean. Many believe that offering a season pass secures a golfer’s frequency of play for the upcoming season.

When selling a season pass, someone always loses — either the golf course or the golfer. The golf course takes a beating when they sell a season pass based on an estimated number of played rounds: the breakpoint. When a golfer plays more than 100 rounds at the cost of less than $10 per round, the staff often resents the golfers’ “abuse” of the pass, and service to that individual often suffers accordingly.

The golfer loses when they buy the season pass, non-refundable, based on playing an anticipated number of rounds, and at the end of the season, they calculate they didn’t use it that frequently, so their cost per round was higher than the rack rate. They are not happy when that occurs.

While season passes are not likely to disappear any time soon, pricing unlimited golf correctly is essential. We would speculate that 85% of all season passes are underpriced.

The components for the correct formula for season passes consist of playable golf days, an estimate of the golfer’s playing frequency, and an appropriate discount to recognize that rounds are prepaid. The pass is non-refundable, and a particular portion of play will occur during the weekday when the rates are lower.

In 2018, JJ Keegan+ conducted a national survey on how golf courses determined season pass pricing. The three most common methods were establishing rates based on last year’s pricing, what the competitors were charging or a guess as to fair market value. Those using a formula estimated golfers played 32% of playable days and were entitled to a discount of 30%, as shown here:

151 Unlimited Pass – Unlimited Unlimited Pass Walking: Pass Walking With Cart Nationally Transferable No Yes Yes Holes 18 18 18 Playable Days 260 260 260 Playing Frequency 32% 25% 25% Rounds Played 83 65 65 Rate Rack $34.00 $34.00 $50.00 Frequency Discount 30% 30% 30% Proper Annual Fee 1,980 1,547 2,275

Note: Season Pass Fair Fee Template is available at jjkeegan.com.

The formula is that one multiplies the playable days times the playing frequency to determine rounds played to calculate the breakpoint on which half the golfers will play more, and half will play less. It represents the average number of rounds played by season pass holders. That number is multiplied times the green fee and multiplied by the discount (100 – 30% = 70%) to determine the fair market value.

You will recall that Weather Trends, for a fee of $450, will provide you a 10-year forecast of weather playable days, as well as access to marvelous forecasting tools. (See Chapter 3.)

In essence, don’t sell a season pass for less than $2,000. Many season passes, particularly at municipal golf courses are priced between $600 - $800. What a joke! No wonder those facilities lose money.

Revenue modeling the impact of season pass pricing is essential if these programs are being offered. Shown next is a matrix that guides a golf course manager in establishing the correct rate:

152 Note 1: Red Shaded Boxes is Cost to Golfer Greater than Per Round Pricing. Note 2: Green Shaded Boxes is Savings Golfer Realized by Purchasing Season Pass.

The chart above illustrates the lost revenue a golf course experiences with moderate season pass use.

Compounding the Error

Golf is a fascinating business with so many vastly different business models to sell what is essentially the same basic service/experience. Within the standard “daily fee/semiprivate/private” structure, there is almost an unlimited number of pricing formats.

In determining an appropriate green fee, most golfers are smarter in determining value received at a golf course than many golf course owners — not you, of course, just your competitor. I believe that golfers are very smart in selecting and analyzing their cost- effective alternatives, based on the forecast number of rounds they anticipate playing.

Beyond issuing season passes, many golf course offers a “loyalty card,” a punch pass based on a set number of rounds, i.e., 5, 10, 20 or some derivation thereof, such as pay for 10, get 12 rounds. Our research revealed that golf courses offer a plethora of other options:

153 • Play four and pay for three • $3 discount Monday – Thursday for nine holes, $6 off 18 • $100 card provides 33% off green fees and a cart • 10-round punch and $5 discount on each round played • Discounts at 64 courses statewide

The daily fee side is perhaps the most prolific – you have a season pass (which is in essence just a discounted daily fee), per-round pricing (with a complex matrix at even the most basic of courses), and frequent player cards. The industry also has pricing based on the number of holes and the type of golf you play: Footgolf, FlingGolf, etc., plus hybrid models such as GreatLIFE Golf.

The multitude of rates offered by a golf course has a direct impact on revenue: they dilute the revenue per round received.

Shown here are two examples of pricing alternatives beyond the typical weekday, weekend, senior, junior, twilight, and seasonal promotional rates:

Course One Course Two Unlimited Play Season Passes Unlimited Play Season Passes Individual Unlimited Play Seasons Passes with Cart Couple New Member Season Passes Family New Members Season Passes with Cart College 2nd Adult Season Pass Student 2nd Adult Season Pass with Cart Junior Season Pass Unlimited Play Season Passes – Twilight Twilight – Individual Twilight – Couple Twilight – Family Twilight – College Unlimited Play Cart Passes – Twilight (5) 18-hole cart rounds (10) 18-hole cart rounds (15) 18-hole cart rounds (20) 18-hole cart rounds (10) 9-hole cart rounds Unlimited Single Unlimited Couple

154 Course One Course Two Punch Passes Punch Passes 5 Rounds Economy Pass – Upfront fee with 50% off each round 10 Rounds Patron Card – Small upfront fee with $2 off per round 15 Rounds Punch Card – Buy ten rounds, receive 12 rounds 20 Rounds Range Pass Corporate Transferable – 10 Rounds 9 Hole Rounds

To me, each of these programs listed in this chart represents a discount that effectively undermines the golf course’s financial potential.

Course One is a signature high-end daily fee facility where supply vastly exceeds demand. Featured as a “must play” course similar to a resort, as it is mentioned frequently in Top 100 lists, management panders to the local golfer. The result is that the golf course’s cash flow loss, before interest, taxes, depreciation, and amortization, has been over $400,000 per year for more than a decade.

Course Two is a Midwest municipal golf course. They lose over $200,000 per year.

You just can’t make this stuff up. I remain convinced that an ongoing, pervasive perception finds that the underlying problem with the financial stability of golf courses is the belief that one must offer a discount. The focus is incorrectly on rounds vs. revenue per round. If you walk around the PGA Merchandise Show and listen to the banter between golf professionals, it is that rounds are up or down, and it’s attributable to weather. Rarely do you hear the more important number — are revenue and income up or down?

Spin the Wheel

The pricing errors at golf courses are widespread. The average green fee in the United States is $34. Golf courses cannot be economically self-sustaining with fees that low. Am I mistaken – is discounting too pervasive, and are green fees priced too low?

The weakest performing golf courses offer both season passes, and a variety of punch pass/loyalty cards. More successful municipal and daily fee golf courses provide one or the other. The most successful golf course offers a loyalty program with rewards based solely on the dollars spent.

155 While the right answer seems simple, the disagreement centered on this point is quite substantial, even among the more astute managers at golf facilities. The point they make when making multiple offerings to the golfer at their facility is, “They are okay if priced correctly with the discount measured and revenue modeled, based on anticipated sales.”

Shown below is the exercise to undertake if issuing season passes or player cards:

Note 1: Season Pass vs. Frequent Player Card Template Note 2: Red Shaded Boxes is Revenue Per Year Detrimental to the Golf Course. Note 3: Green Shaded Boxes is Revenue Per Round Beneficial to the Golf Course

The Season Pass vs. Frequent Player Card Template that can be downloaded at jjkeegan. com provides you with an instant analysis of achieving the revenue per round. One can revenue model quickly the green fees, player card prices, and discounts accorded, and the season passes by category.

These exercises appear tedious, but the calculations and the options can be completed within 30 minutes, giving you the benefit and confidence of knowing for 365 days the effective yields that the course will realize based on projected play.

Barter

Barter is defined, “to trade by exchanging one commodity for another.” What is wrong with that? Nothing on the surface. But in the golf industry, the word “barter” has taken on an extremely negative connotation.

156 GolfNow (Golf Channel), Supreme Golf, TeeOff.com (formerly PGA Tour/EZ Links and currently Golf Channel), Groupon, and Golfzing (American Golf Corporation) are often labeled as bandits by course owners for lowering prices, providing inferior software, employing inappropriate marketing tactics and operating on an unequal playing field through near-like monopoly power. Is the criticism fair?

Most golf course operators express the frustration based on the following dynamics:

There is a Japanese expression, “The other side of a coin has another side.”

Barter at golf courses predates these tee time providers by decades. Golf courses have provided complimentary access to newspapers or golf magazines in exchange for advertising. Golf management has exchanged professional services, i.e., accountants or lawyers, for free or at a discount. Thus, to say barter is bad, superficially, is incorrect.

It is first necessary to give credit to what third parties do well — the good we can celebrate. We live in a capitalistic system in which private owners control a country’s trade and industry for profit, rather than for the State. Should we congratulate these third-party vendors for their success as capitalists? Maybe, except they’ve done so at the expense of their suppliers — golf courses.

Second, they are excellent marketers. Their very smooth and polished salespeople give you high confidence and assurance in their statements. They have created a vast marketplace in which millions flock for discounted golf. Currently, as a result, it is nearly imperative for a golf course owner to participate or be severely disadvantaged.

157 The leader in this industry by a wide margin is GolfNow, with tee time distribution on more than 9,000 courses worldwide.

Unfortunately, in a research program undertaken by the National Golf Course Owners Association to gain a comprehensive understanding of tee time distributors and golf management systems, GolfNow’s net promoter score was a -26, and they were rated lowest on nearly every benchmark measured.

Notwithstanding that rating, the potpourri of products they offer is impressive, as highlighted in the slide below:

What most fail to grasp is that the third-party vendor’s customer is the golfer — not the golf course owner. There is nothing inherently wrong with the mission statement of seeking to serve the golfer exclusively. And if access to that customer is through a golf course owner, to the extent that the financial arrangement is mutually beneficial, the concept of barter is valid.

However, it is their internal belief, shared with me by GolfNow’s senior executives, that the NGF, PGA of America, PGA Tour and USGA are not principally focused on ensuring the financial stability of the golf course owner. Instead, their focus is growing their Associations with little sincere concern for increasing the number of golfers.

That opinion is not without substance. In speaking with a PGA Tour representative when they were beginning to research how they might enter the tee time business five years ago, their focus was jealousy of the revenues earned by GolfNow. He felt that those revenues should be collected and accrue to the benefit of the PGA Tour. Nowhere in the conversation did he mention a concern for the golf course owner.

158 The flaw in the barter arrangement with third-party tee time vendors is that the golf course owners have lost control of the price at which their inventory is liquidated. Thus, all third parties, as well as Golf Associations, should be approached with caution. Here are some suggestions.

Suggestion 1: For the golf courses in your competitive marketplace, band together and either drop off of third-party vendors totally or collectively demand floor pricing at 25% of the retail rate for the tee times sold. Even go it alone if you must.

A California multi-course operation elected several years ago to discontinue using the third-party vendor who dominated in that market, as they were unable to agree to a “floor price” for the sale of their trade times. The short-term impact over the next couple of months was that rounds fell across those courses. However, rounds returned to average daily volume after 90 days, and revenue began to rise. There is a lesson there.

Suggestion 2: Be mindful of the cancellation clause in your agreement. Third-party vendors typically have a 90-day cancellation clause that we understand has been stringently enforced. When not providing sufficient notice, the contract auto-renews for another year. We heard of one course in North Carolina that only provided a 30-day notice and was required to continue the service for another year.

Suggestion 3: Audit the “fences,” i.e., the tee time before twilight, created by third- party vendors for the sale of barter times to ensure they comply with the contract. We know of several examples where the fences were violated. To the credit of the vendors, they refunded to the golf course revenue generated from tee times sold when the discrepancies were cited. More often than not, “honest mistakes from new employees” were cited, and compensation was not made.

Suggestion 4: Test their Ethics and Integrity. Create a unique email address that you enter into your POS database. Monitor if you start receiving an email from the third- party vendors where they have taken your intellectual property for marketing their barter times. I wouldn’t be surprised if they are using your proprietary customer names for their benefit. Catching them would be somewhat hard to spot unless you set up some unique emails used exclusively for this test.

Suggestion 5: Follow the lead of some golf courses operated by management companies and schedule tournaments and outings during the trade times. While third-party vendors may want alternative tee times, there is nothing in most of their contracts, according to what we have heard, that precludes this practice.

Suggestion 6: Create an SKU (stock keeping unit) in your POS system that tracks the date and time of 100% of the barter times sold. Calculate the value of the liquidated trade and compare it to the quality of the software received, asking yourself, “Am I getting value?”

159 Suggestion 7: You need to thoroughly understand what is in it for your course. You could select Club Caddie, Club Prophet, Chronogolf, ForeUp, or Teesnap for less than $12,000 and acquire a fabulous integrated software solution and build your database to market it proactively.

Suggestion 8: Read the contract carefully and thoroughly understand the provisions of the agreement and all of the associated boilerplate.

These simple suggestions are not to be considered as comprehensive solutions to deal with third-party vendors. In January 2020, the National Golf Course Owner’s Association (NGCOA) issued an extensive and foreboding 62-page report regarding the perils of barter. (Click here)1

The report is thorough, detailed, engaging and timely, with the recent merger of GolfNow and EZLinks/TeeOff. Lead researcher and author Harvey Silverman, a long- time golf industry marketing consultant and observer, compiles case studies, academic reports and findings from across the Internet’s golf landscape. Silverman makes a strong case that it’s not just about the barter math, but also the collateral damage caused by giving up tee times to online tee time agencies (OTTAs).

From the report:

• “OTTAs have created a highly competitive landscape to gain customers. They enhance their offerings to golfers beyond ‘hot deals’ or the like, offering flash discounts, loyalty clubs, free passes and subscription services. The result is that OTTAs routinely circumnavigate even the lowest agreed-upon resale price of tee times with golf course operators and can cause confusion for the golfing customers. • OTTA sites such as GolfNow, TeeOff, Golf18 Network, Last Minute Tee Times and others have trained millions of golfers to shop for a price first. With that, golfers have gained a reference-price-effect perspective that golf is too expensive. Golf course operators need to consider whether a third party should be allowed to have this much influence over their pricing and overall product image. • Drs. Cathy Enz and Linda Canina of the School of Hotel Administration at Cornell University add, ‘Demand for golf is primarily inelastic, suggesting that a price drop will not have a significant impact on demand and thus, revenue will decrease.’ • And lastly, Silverman states, ‘To put it simply, paying with cash instead of tee times eliminates nearly every issue associated with bartering tee times.’”

1 https://jjkeegan.com/ngcoa-releases-study-beware-of-barter/

160 Is the Industry Benefiting from Barter?

Golf hit its apex in the early 2000s with more than 30 million golfers enjoying over 16,000 golf courses, playing 518.4 million rounds, according to the National Golf Foundation. However, since then, the number of golfers has fallen to less than 24 million, and we have witnessed 14 consecutive years of more courses closing than opening, leaving less than 15,000 golf facilities. Estimated rounds are now 434 million.

If third parties were good for the golf industry, rounds and revenue would have increased.

In the process, third parties have earned an estimated $150 million annually with accumulated earnings, probably approaching $2 billion in a segment of an industry that generates only $21 billion in revenue annually.

Thus, each golf course may have been financially disadvantaged, perhaps by $200,000 or more.

Expensive Software

The objection to barter from this camp is that the consideration received between the trade liquidated and the fair market value of the software services provided is too great to be equitable. In addition to third-party vendors double-dipping by charging a booking fee, or offering a VIP with no booking fees for $100, the value of trade times liquidated is egregious, in my opinion.

Here is the research we conducted regarding the financial consequences of using a third- party vendor:

• The third-party vendor received two trade times per day in exchange for marketing services only – no technology. The course was able to realize $97,000 in revenue at a per-round price of $17.50, compared to their rack rate of $45. Third-party vendors liquidated an estimated $67,500 in trade times for their services. • A golf course in Kentucky went with a third-party. Rounds went up 2,500; revenue remained the same.

• A golf course in Indiana went on a third-party vendor. The green fees sold at the rack rate fell from 63.1% to 37.5%, while trade times on their two courses represented over $150,000 in liquidated trade (barter rounds sold x rack rate x 40% discount). • In December 2016, we reviewed an ORCA (Online Revenue Channel Analysis) report in which the value of the liquidated trade on a golf course exceeded

161 $111,000. A third-party vendor sold zero tee times through their national distribution for the benefit of the golf course. The annual license fee for the POS software before the agreement was $4,000. • Several years ago, we saw a third-party vendor report for the tee times sold in Denver. The third-party vendor generated just under $30,000 in liquidating trade times while essential POS software costs $12,000 or less. • In late March 2018, a third-party vendor was speaking about a commission arrangement with a multi-course management company. There was progress until the sales representative asked, “We need to determine how we will be compensated when the golf course is closed for weather.”

• The management company’s CEO stated, “Let me understand. You want compensation when my course closes due to the weather? In that circumstance, I still have the staff to pay, cart and maintenance lease obligations, and many other financial responsibilities. Yet, you want compensation when your services produced no revenue for me.” An agreement wasn’t reached that day.

Who is at Fault?

Golf course owners have ignored the perils of barter for years. Some believe this has occurred by laziness, lack of knowledge, and a lack of sophistication in working cooperatively in a local market for the collective benefit of all golf courses.

Golf course owners abdicated their responsibility for properly managing their golf course efficiently by productive marketing decades ago.

The following ad first appeared in 2004 to warn golf course owners of the peril:

162 In 2015, the NGCOA joined with the PGA of America to form the Golf USA Tee Time Coalition. This joint effort was to educate golf course owners and operations and provide an industry monitor for compliance with third-party tee time providers. The mission statement of the Coalition is: “The primary purpose of the Coalition is to support a competitive and balanced marketplace in public golf that is both supportive of the golf course owner, operator, PGA professional and the golf consumer. This will be accomplished by promoting the adoption of online tee time guidelines and best practices for technology companies, online agents, marketers, golf course operators, general consumers, and the media.”

163 Numerous articles and blogs have been written. Unfortunately, these efforts, highlighted below, designed as valiant attempts to educate, mostly fell on the deaf ears of golf course operators. Shown here are the blogs we have posted and the number of views as of May 25, 2020:

Date Subject Views 22-Jan-18 Sales Approach is Disingenuous 839 24-Oct-17 David vs. Goliath 2,333 29-Nov-16 Third-Party Vendors - Are They Good for the Golf Industry? 2,396 18-Jul-16 A Letter That Would Serve GolfNow Well 2,880 6-Jul-16 Rap Video: We Sell a Boat Load of Trade 14,114 20-Jun-16 Third Parties - Are You Getting Value? 3,626 22-Jan-16 The Dream Doesn’t Match the Reality 2,878

One of the most prominent advocates against barter is the CEO of the National Golf Course Owner’s Association, Jay Karen. He wrote on Feb. 25, 2020, in response to seeing the 2004 ad warning against the perils of barter:

“Oh, how I wish it were humorous in the way of, ‘Remember the old days when we worried about barter?’ Yeah, I can’t believe we almost fell for that trap.

Perhaps we will be able to look back on 2020 in the year 2036 and see when the tide finally started shifting on this.

We will keep pushing the boulder up the hill. Someone has to.”

In the May 2020 issue of NGCOA’s Golf Business magazine, Karen says, “Barter injects an unnatural and erroneous transference of pricing control to a party with different interests than the golf course itself. This is the steroid that strengthens discounting and weakens the business.”

Karen adds, “We firmly believe that the barter economy is allowing for deep, unnecessary, and erroneous discounting of golf, as well as aggressive disintermediation with customers that golf courses have worked decades to cultivate.”

Final Thought — Rates Should Be Set with Costs in Mind

The setting of the proper green fees is rarely done with the thought of “What did I need to charge to make money?”

Mike Vogt, a Certified Golf Course Superintendent, developed an ingenious green fee pricing tool with expenses in mind, as shown here:

164 Being mindful of costs, profits and the cash flow required to fund capital expenses would serve the golf course owner well.

Exercises The goal of this book is to aid the golf course owner and management team to create a Winning Playbook for their golf course. This chapter provides a set of valuable exercises: 1) Determining experience-based green fees; 2) Establishing the correct season pass price if you want to sell them, and 3) Evaluating the revenue per round realized by offering season passes vs. frequent player cards. The set of templates that will help you maximize your revenue opportunities are summarized below. These exercises can be downloaded at jjkeegan.com:2

Step Description File Level of Explanation Retail Winning Format Difficulty Price Playbook Pricing 4 Customer Excel Entry Most golf courses determine green $100 $50 Value fees based on historical rates or what Experience their competition s charging. This -ex ercise will provide an estimate of the correct green fee based on the experience that is created at the facility. 4 Green Fee Excel Inter- There is a relationship between 18 $50 $25 Pricing Tool mediate daily rates by an adult, senior, and – Simple junior by the time of day. This template calculates, based on the cost to operate the course, the minimum rates that should be charged.

2 https://jjkeegan.com/winninggameplan2020/ 165 Step Description File Level of Explanation Retail Winning Format Difficulty Price Playbook Pricing 4 Green Fee Excel Inter- There is a relationship between $75 $50 Pricing Tool mediate 18 weekend, weekday, nine holes, – Complex morning, afternoon, senior, and junior green fee rates, as well as frequent player cards and seasons, passes. This template confirms those interrelation- ships to ensure all of your prices are “in balance” for the fees posted. 4 Green Fee Excel Inter- Determine the impact on revenue by $50 $25 Yield – mediate changing the rates or rounds for the Revenue principal categories available. Modeling Exercise 4 Loyalty Excel Inter- Frequent player cards (loyalty) that are $50 $25 Cards mediate offered for a set price that provides -Sensitivity varying discounts can significantly low- Analysis er the effective Revenue Per Round. This worksheet helps you determine the correct pricing. 4 Season Pass Excel Entry Determine the correct price for a $50 $25 – Sensitivity season pass based on the number of Analysis playable days in a golf season and the appropriate discount to be provided. Also, measure the impact on total revenue of raising prices and estimating decreased unit sales. 4 Season Pass Excel Advanced Offering unlimited play season passes $50 $25 vs. Frequent and loyalty cards can create customer Player Cards confusion and unwittingly lower your realized revenue. This worksheet identified the breakpoint of each program. 4 Secret Shop- Excel Entry On the assembly line of golf, 111 $25 Free per Service customer touchpoints contribute to Checklist the player’s perception of value. This checklist guides in measuring the experience provided at your golf course.

5 Golfer Excel Entry There are 30 questions that a custom- $25 Free Survey – er survey should include. Use of this Loyalty and document will help your golf course Preference craft an effective survey to ensure insightful responses.

Note that the templates come with 30 minutes of online consulting on how to properly use via a Zoom meeting within 24 hours after downloading the templates.

Concluding Thought

“When dealing with people, remember you are not dealing with creatures of logic, but creatures of emotion.” — Dale Carnegie

166 Chapter 8 – Champagne Tastes: Beer Budgets “The biggest obstacle most entrepreneurs face are the ones you don’t expect: not knowing your numbers, not knowing your strengths and weaknesses, or not being willing to go that extra mile for your customers.” — Tilman Fertitta, Owner of the largest single-shareholder company in America and the Houston Rockets.

All for Naught

The vision can be defined, the why-how-what understood by management and staff, both full-time and seasonal, the course can be in immaculate shape, programming can be extensive. If the delivery of the service to the customer is not consistently making the member or golfer feel valued by the experience, opportunities are lost, revenues do not reach the potential, and the return on investment becomes understated.

Hence, the importance of understanding your members’ and players’ needs, wants and desires is a central and vital step to maximizing a facility’s financial potential. Outlined here is the fifth step in creating a winning playbook for your golf course:

167 Changing Habits

When we see the word “habit,” we presume “bad habit” — can’t quit smoking, drinking, or eating, perhaps. A habit is a repetitive action without thinking.

But habits can be useful. Reversing a practice is usually neither easy, nor quick, nor simple. Habits are neurological processes that have become programmed into our brains. The brain forms habits by continually looking for ways to save effort. In “The Power of Habit,” Charles Duhigg points out that patterns “are so strong that they cause our brains to cling to them at the exclusion of all else, including common sense.” Duhigg noted that habits could be so powerful that they create “neurological cravings” that can result in obsessive behavior.1

What does this have to do with forming winning management and an operational team that can ensure consistent execution at a golf course? Everything. Creating and encouraging positive habits for each member of a golf facility’s team are worthy and rewarding goals. But how can management accomplish this task?

As Tony Dungy, the famed Indianapolis Colts coach and TV football analyst, says, “Champions don’t do extraordinary things. They do ordinary things, but they do them without thinking, too fast for the other team to react. They follow the habits they’ve learned.”2

The habits of a successful golf course include knowing their customers, whose interests can vary widely.

Are the Needs and Desires of All Customers the Same?

Each generation in America has evolved with its own set of priorities and biases, which influences their view toward golf and their proclivity to join a private club. Presented below is the population by generation in the United States:

168 Dr. Jill Novak, University of Phoenix, Texas A&M University, summarized the characteristics of these generations as follows:3

“The traditionalists were Korean and Vietnam War Generations and the most affluent retirees in history. Marriage was for life, divorce and out-of-wedlock were out of the question. Pre-feminism women principally stayed home to raise children. Men pledge loyalty to one corporation with the reward of a gold watch. Newspaper readers and of the Big-Band and Swing music generation. This generation typified the private club member.

Baby Boomers represented rock and roll, free love, and were mostly self- righteous and self-centered. This TV generation saw mothers, though principally homemakers, begin working outside the home, creating a two-income family. Divorce and accepting homosexuals were starting to be accepted. Optimistic, they tend to be more positive about hierarchal structure.

Generation ,X ‘latch-key kids’ grew up street-smart but isolated. Latch-key came from the house key kids wore around their neck, because they would go home from school to an empty house. Entrepreneurial, very individualistic, and government and big business meant little to them. Raised in the transition phase of written based knowledge to digital knowledge, most remember computers being introduced in high school. This generation averages seven career changes in their lifetime. AIDS begins to spread. Want what they want and want it now but struggling to buy, and most are genuinely in credit card debt.

Millennials are a sharp contrast to Generation X. Respect authority. Falling crime rates, but they have to live with the thought that they could be shot at school. They learned early that the world is not a safe place. Schedule everything and

169 feel enormous academic pressure and strongly prefer digital literacy and work in a team. With unlimited access to information, they are assertive with strong views and want everything fast. They have been told over and over again by their parents that they are special, and they expect the world to treat them that way. They do not live to work, and they prefer a more relaxed work environment with a lot of hand-holding and accolades.

Generation Z/Boomlets/Centennialsrepresent a significant departure from prior generations. In 2006, there was a record number of births, and 49% were Hispanic, which would change the American melting pot in terms of behavior and culture. Sixty-one percent of children 8-17 have televisions in their rooms, 35 percent have video games, 14 percent have a DVD player, 4 million have cell phones. They have never known a world without computers and cell phones. When they reach four, they become less interested in toys and begin to desire electronics such as cell phones and video games.”

Each generation has a significantly different view of golf. The traditionalists are just that — likely private club members, should their net worth support the lifestyle.

For baby boomers, retirement means being able to join life after the children left home; hence, the surge in golf participation within this generation. The Town of Barnstable, MA, reported via their Consolidated Annual Financial Report that 70 of their 1,142 season pass holders were over 80. Almost 60% of Barnstable season pass holders are seniors.

In a local survey conducted in Yarmouth, the HIGHEST PRIORITY that the course was asked to address was the preservation of season passes – unlimited golf for $850. A member of a Golf Advisory Board dared to write: “Page two of the RFP (Request for Proposal) specifically states under Scope of Services that the ‘specific assessment goals include the following’ – GOAL 4: CONDUCT A PROPRIETARY SURVEY OF OUR MEMBERS TO MEASURE CUSTOMER LOYALTY AND SATISFACTION. Survey results attained from any other group of individuals fall outside of the scope of this assessment and should not be used in any quantitative way towards the final evaluation. The City allows all residents/taxpayers to ‘chime in’ on school issues because every resident/taxpayer has a financial commitment to our school system, whether they use it or not. This is not the case with golf, where no taxpayer has paid a dime toward its operation.” This is where the self-centered orientation of baby boomers introduces peril to the golf course owner. The fact is that the City’s Golf Enterprise Fund balance is negative, ran an EBITDA deficit last year nearing $150,000, is over $2.5 million in debt, and deferred capital expenditures exceed $1,500,000. Spare me that no taxpayer has paid a dime towards its operation. They certainly will shortly.

170 The participation rates in golf of Generation X and Millennials are far lower than the baby boomers, and if they do play, they might engage in only eight rounds annually. There is a perhaps more significant concern for the future of golf found within Generation Z. The participation rate of individuals who play golf in America is heading in only one direction — down.

Diverse Interests — What Is Important to Them?

Dr. Kris Schoonover and Dr. Eric Brey, Professors at the University of Wisconsin-Stout, which oversees the Professional Golf Enterprise Management Program, were retained by the USGA to define the golf experience and the overall satisfaction with golfer touchpoints. Dr. Schoonover, who also is the Director of Golf Operations for the famed Erin Hills, found over 1,000 touchpoints in the life cycle of a golfer’s visit to a course: engage, arrive, golf, extent and extend.

They presented the study at the USGA Innovative Symposium in Japan in March 2019 (click here).4 What was compelling in their research was the vastly different perceptions as to what was essential to a golfer vs. what the facility perceived as critical to the enjoyment of the game, as shown here:

Criteria Golfer Facility Variance Appropriate Directional Signage 66 20 46 Flexible Pricing 43 6 37 Availability of Golf Carts with GPS 43 7 36 Availability of Drinking Water 65 32 33 Length of Holes 62 31 31 Availability of Restroom Facilities 67 37 30 How Well I Play 60 36 24 Being Able to Walk the Course 58 34 24 Ease of Booking a Tee Time 73 56 17 People You Play With 79 68 11 Physical Beauty/Aesthetics of Course 71 66 5 Pace of Play 71 73 -2 Condition of the Course 80 88 -8 Golf Shop Staff Available to Greet and Meet You 56 72 -16

The study has a lot of meaningful insights. The top five factors that enhance a golfer’s enjoyment: the condition of the course, people you play with, ease of booking a tee time, physical beauty/aesthetic of course, and pace of play are consistently rated most

4 https://www.usga.org/content/usga/home-page/videos/2019/03/14/2019-golf-innovation-symposium--defining-golfer-experience.html

171 significant in surveys we conduct for clients. Price as an essential criterion will finish first or second only when surveying a municipal golf course that has an abundance of senior players. The factor over the last four years that has grown in importance is the pace of play.

When conducting a survey, there is a particular set of fundamental questions to ask. A customer survey should comprise four components: (1) learning about the golfer, (2) where they play, (3) their opinion about your facility, and (4) their golf spending habits and practices.

A well-crafted survey will incorporate “skip logic” to ensure that the respondent can complete the survey in less than 10 minutes. For example, if they haven’t played the golf course in the last two years, the logic would be to have them skip over any questions evaluating the course, the food service, and the staff.

Usually included in a survey’s first section are questions about gender, age, household income, ethnicity, education and zip code. Also, how many times they play golf each year, their barriers to playing more often, how many different courses they play annually, and the factors that they consider important in selecting a golf course.

In this first section, two questions provide valuable insights as to what the vision and mission of your course should be: “Why Do You Play Golf?” and “How Important Are These Factors to the Enjoyment of the Game?” as we highlighted in Chapter 2.

One of the great options a survey provides is the ability to filter responses to a given answer by gender, ethnicity, income, playing frequency, and more. Some fantastic insights can be obtained by drilling into the detail if the survey has attracted a sufficient number of respondents.

To begin the second section of the survey, the question, “Would you recommend the following courses to a friend, colleague, or family member?” should be asked. A 10-point rating scale, ranging from “Extremely Likely” to “Extremely Unlikely,” is appropriate. It’s an essential question to determine customer loyalty.

Respondents are asked which courses in the area are their favorite, and which courses they play most often. These will provide insights as to their playing patterns. Additional questions to ask in this section include their ideal length of the golf course and how they rate a competitive set of golf courses based on conditioning, course layout, customer service, food and beverage, merchandise, practice facilities, and price and value. These answers will provide valuable insights regarding how the customer perceives the attributes of your course vs. your competition.

The third section of the survey provides the opportunity for respondents to opine on the facility, rating the various specific aspects of your golf course: condition, layout,

172 customer services, food/beverage, merchandise, the pace of play, price, proximity to home/work, range, tee time availability, and more. Further evaluation of course conditions analyzes their opinion on the condition of bunkers, fairways, greens, rough and tees. Questions asking how many times they have played your course, whether they are likely to play the course again, and the primary barriers to playing there more frequently provide insight on challenges to increase rounds and revenue. Frequently asked are questions about all aspects of the facility, including the restaurant, staff, their preference for making tee time reservations, and their preferred communication (email, website, social media).

For a private club, the questions expand when facing financial challenges as to what is the member’s desired preference: capital assessments, operational assessments, increase in monthly dues, course renovations, or closing various amenities offered. For a municipal, daily fee, or semi-private facility, the perceived value of changes in season pass programs can be vetted through a survey.

During the 4th quarter of 2019, we conducted various golf consumer surveys throughout the U.S., with new insights. We are beginning to ponder whether these “electronic convenience surveys” of golfers are genuinely reflecting the sentiment of all who play at the golf course. What has surprised us is the average age of the golfer who typically responds is a decade older than the average age of a golfer, which is 45. Millennials, who represented a significant portion of the client file, elected not to respond. Are they so wedded to mobile devices that a survey historically meant to be taken via a laptop or desktop computer generates no interest?

Also, there are some questions whose answers produce little meaningful insight.

For example, let’s say we ask golfers to rank the value of the golf experience received for a prime-time green fee on Saturday morning, and the choices include $30 – $34, $35 – $39, $40 – $44, $45 – $49, and $50 – $55. If the rack rate is currently $45, golfers will select $35 – $39 as the value they are receiving.

Why? They are smart enough to know that if they selected $30 – $34, the answer would be dismissed, knowing that they were intentionally lowballing the value. Thus, they choose the next higher bracket, trying to fool the golf course operator into thinking that their selection is the fair market value, hoping the golf course manager will reduce the rack rate.

When asked a question about the finances of the golf course, golfers will always respond based on their self-interest, rather than the more altruistic balancing of their interests with that of the golf courses. Questions regarding policies and procedures at the facility always produce skewed responses, reflecting the bias of the golfer.

One question that always gets the same response, when asked of municipal golfers, is shown here:

173 Golfers fail to grasp that in the allocation of a city’s resources – police, fire, utilities, and streets are core. Notable are those activities that private enterprise is unlikely to engage in, such as parks, ball fields, pools, etc. Golf is labeled as “Discretionary” in the National Parks and Recreation allocation model. The sole exception is that some cities might classify as “Important” golf activities that focus on juniors and new entrants to the game, i.e., Par 3 courses.

Self-interest always dominates when spending someone else’s money.

If the electronic survey produces biased results, based on our evolving culture, what are the alternatives?

Communication Challenges Amongst Four Generations

A golf course’s customer base spans four generations. Communication preferences among each generation are vastly different.

174 A golf course must utilize the various media to appeal to the preferences of each generation to communicate successfully in today’s culture. The race will be won by the SWIFTEST – a mass of letters to reflect the importance of social media, website, Instagram, Facebook, text, emails, surveys and an integrated tee time/point of sale golf management system, as shown here:

Social media, including mobile app management, requires the presence and operation of all platforms to include managing content, responding, and posting to comments. We highlight Facebook and Instagram as being two platforms that each course should adopt. It is our thought that Twitter and LinkedIn are not as useful for communicating with golfers, regarding events or specials offered at the golf course.

175 It is also vital to protect your brand reputation by reviewing platforms where your course might be listed, like Golf Advisor/GolfNow, GolfLogix, Supreme Golf, and TeeOff.

The key to all these communication media is to facilitate data segmentation to enhance customer loyalty.

Data Segmentation: Harder Than It Sounds Very few golf courses effectively engage in customer relationship management. Facilities have historically faced four barriers: 1) Lack of segmentation of their customer database, if they have one 2) Inadequate tools to cost-effectively market 3) Marketing inexperience 4) Inconsistent execution of programs Building customer loyalty in the golf business is straightforward. A customer relationship management program involves four steps: collecting data, analyzing the data, executing a marketing program, and monitoring the results. For the golf industry, those steps need to proceed as follows: First, install an integrated tee time reservation system that interfaces with your POS system. Use the software to build a customer database that tracks customer frequency, spending, and preferences. Note that developing an accurate customer database is not without challenges. One of the problems is that courses often collect “data” only from the golfers who make the tee time, especially if they check-in and pay for the foursome. If the other golfers’ check-in separately, then there’s the delay of getting names (spelled correctly), phone numbers (repeated for accuracy), and email addresses, which are a pain because many are “cutesy” and thus hard to listen to and type into a computer. Utilizing a registration system separate from the POS process is an effective way to overcome this potential bottleneck. Second, construct a website that can do the following: • Allow the golfer to book a tee time on the home page of the website or via a mobile application in three clicks. Few golf courses have websites or mobile apps that are efficient. • Permit the customer to self-register for tournament opportunities, merchandise specials, and tee times, priced consistently with the course’s yield management strategy. Fortunately, more courses are beginning to provide this functionality. Third, with the information collected, custom-tailored emails and social media messages are sent to your demographically profiled customers on a biweekly or customer- requested frequency to win and build loyalty.

176 Take caution that the data collection and filtering process must be accurate. Weak data will lead to poor decisions about how to manage the customer experience. Nothing is more frustrating than getting an email from a company to purchase products you have already bought from them or receiving an invitation to play in a tournament for which you are not qualified.

The key to success in building loyalty is crafting messages to golfers based on their preferences and their degree of commitment. Identifying core customers, new ones (acquired) and defectors (lost customers — those who haven’t played in 90 days) are essential. In Chapter 9, we will highlight the key reports that should be included in your golf management system to achieve the recommended segmentation.

We don’t support a reactive philosophy of only serving customers upon their arrival. We like to see a proactive philosophy of “hand picking” your customers based on their spending profiles.

A golf course achieves customer loyalty not because of what you do (sell a green fee, cart, merchandise, food, and beverage) but because you establish an emotional connection to the customers through every step of the purchase cycle. Their loyalty becomes a sphere of influence that gets your facility repeatedly chosen over the competition, not once or twice, but consistently.

Some may confuse the recent emphasis on customer loyalty with the evolution of social media and the connected customer. However, customer relationship management came to the forefront of every smart business owner’s conscience when it was introduced in 1993 by Don Peppers and Martha Rogers, Ph.D., who are recognized as founders of that discipline. Their book, “The One to One Future,” revolutionized marketing when it was first published.

Simply stated, customer relationship management is a system for managing a company’s interactions with current and future customers.

We use many different criteria for the segmentation of customers: demographics, geography, attitudinal affiliations, transaction value (recent historical value, historical total cumulative value, and future lifetime value), motivations (impulse, early adopter, status seeker, and bargain hunter) or lifestyle.

For golf courses, the transactional value of recent and lifetime customers are the most appropriate benchmarks. For example, segmentation beyond transaction history is of importance in the golf industry in identifying those who make the tee time (called “Captains”) versus the remaining group members and defectors (those who haven’t played in 90 days).

Note that for resort golf courses, the number of unique golfers who play the course is higher, and their repeat frequency is far less. Tailoring communication to those golfers at appropriately longer intervals will justify loyalty on subsequent travel.

177 To effectively market to these groups, Peppers and Rogers created the Picket Fence concept for customer relationship management (CRM), shown in the following figure:

What is interesting about their Picket Fence concept is that it introduces customer segmentation to perhaps the top 33% of the customer database that has the highest value. Peppers and Rodgers carry that concept more profoundly by addressing the customers according to their differentiated value, as shown below.

178 Many maxims ring true for the operation of any business or golf course. For the golf course, a strategic but often overlooked adage is that each customer has a different value. While all customers have “cash value,” some customers may also have strategic value. For example, the director of marketing for a corporation may have immense strategic importance. By identifying such customers quickly and courting them wisely, you can capture their corporate outing business.

The idea of dismissing customers who bring in less revenue than the cost to serve them is a good one. Unfortunately, most municipalities are precluded from engaging in the productive business practice of shooing away the season pass holders who dominate the tee sheet and behave as if they own the course. Daily fee golf courses get caught in the trap of the upfront annual revenue from season pass holders to even cash flow requirements and are reluctant to dismiss the frequent but painful customer.

Thus, a course might segment its ideal customer profile as follows:

• Best Customers: enjoy the experience, interaction is proper, low service requirements. • 2nd Quartile: pay top dollar, but the cost to serve is high in demands made of staff and complaints registered. • 3rd Quartile: very price-sensitive but have few unique requests and are easy to serve. • 4th Quartile: leverage buying power to achieve a low price with lots of services required.

All of this academic theory is great, but it will remain mostly pointless for the golf course industry unless it achieves a consistent change through execution. Change in the golf course industry seems to occur either almost accidentally or traumatically. Just as a trainer can’t make someone lose weight or a counselor can’t force a client to quit the excessive use of alcohol or cigarettes, it is foolhardy to think that demonstrating the benefits of customer segmentation will bring about the implementation of new management practices.

Comprehensive customer segmentation is one of the new frontiers for golf course managers. Golf course owners and managers who invest the time in the short term will reap financial and psychological rewards in the intermediate and long term.

On the journey to learning more about the customer who visits the course, the management team should give themselves some slack early on. Even the largest companies in the U.S. make mistakes.

179 We received this ad from United Airlines to upgrade our seat on a flight to a premium cabin upgrade:

As a United 1K flyer with over 3 million miles, we are accorded premium upgrades for free. This email was reflecting that UAL had my Mileage Plus number and mileage balance; they failed to filter the email by my flight status.

Another reputable company, Hertz Car Rental, sent an email message to me that wasn’t correctly filtered. Note that the error was caught quickly as shown below:

180 A third example is Starbucks. In notifying me about their Spring 2019 promotion, in which they awarded, supposedly, 2.5 million prizes, they provided a login to register for their Rewards program, failing to recognize that I was already an existing customer.

Therefore, a golf course should be mindful not to send an email to a male for a golf/ wine/dine for the ladies league!

A Lesson in Effective Email Marketing

Email marketing services (Constant Contact, Mailchimp, VerticalResponse) charge monthly based on the number of registered, opt-in subscribers. Over time, those respondents can sometimes lose interest in your products and services and no longer open your marketing pieces, whether they be newsletters, tournament promotions, season pass campaigns, etc. Other times an individual can leave the firm they are with, and the employer doesn’t remove his email address from their database. Thus, it appears that the message is being correctly delivered.

During December 2018, using Mailchimp’s Contact Rating scale, we analyzed our email database of 17,833 email addresses and sent the following email:

“Parting is Such Sweet Sorrow

We have great respect for your time. We are sending you an email in an intrusion on your most valuable resource.

181 Therefore, we are going to delete you from our email database effective January 31, 2019. You can continue to receive insights and perspectives on how a golf course can reach its financial potential by merely CLICKING READ MORE below. In departing, we would like to provide you one last insight from which you can benefit in your marketing efforts. Over the holidays, I analyzed the contact ratings given by Mailchimp to our email database. Here are the star ratings:

Star Rating Emails in File 0 5,454 1 2,257 2 5,859 3 1,816 4 726 5 1,721 Total 17,833

The ratings are based on the number of opens based on emails sent and click- throughs. We are removing from our database those with a 0- and 1-Star Rating. We would recommend your undertaking the same analysis with your database, and after attempting to re-engage your lost customers, removing them from your database will reduce your monthly marketing costs.”

The response I got was amazing. Twenty-seven people unsubscribed from a list that they were going to be automatically deleted from anyhow. Figure the intelligence of the typical person. More importantly, I received over 125 emails asking that they not be removed, some pleading, and some passionately asking to continue to receive our newsletter.

The email campaign was a success. Filtering your database on superfluous email addresses can save you money.

A Fair Loyalty Rewards Program

The concept of loyalty programs started in the 1880s with tangible goods, i.e., free chocolate chip cookies. S&H Green Stamps first provided cash incentives in the 1930s, and American Airlines introduced loyalty systems in the early 1980s. The airline loyalty program was a simple concept of earning miles based on actual distances flown, which were redeemable for future air travel. For as little as 15,000 miles, one might be able to fly a round-trip coach flight. Twenty-five thousand miles would have provided you a first-class flight within the United States.

182 You are probably too young to remember the classic movie scene in “Network,” where Peter Finch raises the windows and screams, “I’m mad as hell, and I am not going to take this anymore!” It is one of the iconic scenes in movies.

For decades three things have been consistent in my life: Starbucks Coffee, United Airlines and Marriott Hotels — only because there aren’t more Westins.

If you are offering a customer loyalty program, rewards have to be justly earned and easily redeemed when targets are reached. Unfortunately, neither the loyalty programs of Starbucks or United meet those benchmarks.

If a customer loyalty program is not structured properly, it may result in customers leaving. In my case, Starbucks: done, finished, never again. Why?

Over the holidays in 2017, Starbucks ran an online game Starbucks for Life! for early December through January 8, 2018. They promised that “you will earn a gameplay every time you make a qualifying purchase at participating Starbucks® stores with your registered Starbucks Card or your Starbucks Card registered on your App. Limit 2 earned game plays per day. You can earn even more plays by completing challenges.” I completed 14 of the 17 challenges.

After spending over $150, I won three ten-bonus stars valued at $0.96. My bad luck? Perhaps not. In an email exchange with a leading savant at PGA Headquarters, she said that they visit Starbucks five out of every seven days and won nothing — zilch, nada, zero, diddly squat. The Starbucks contest wasn’t fair.

Perhaps even more frustrating, because of the materiality of the award redemption, is the United Airlines Saver Awards for future travel, when attempting to secure a business or first-class flight Internationally.

Airline availability is made available 335 days in advance of the flight. Like Lufthansa, United posts NO Saver Awards until about 14 days before the trip. They will occasionally post a Saver Award on Star Alliance Partners for international travel, but the domestic portion is “economy” on United. The hours spent searching for the rewards are mind- numbing.

What is the lesson for golf courses? For a loyalty program to have value, it should include the following: • The requirements to earn a reward should be defined. • The point redemption system should be quickly understood, based on a single criterion. • Higher accumulated spending should be rewarded with more favorable point redemption. • The value of points earned should not be degraded based on annual adjustments.

183 • An individual can redeem instantly without having to engage in a prolonged search to find products or services desired. • Monthly statements should be emailed to the customer, summarizing their earnings. • If the company does not post miles or points, the customer should have 12 months to correct their account. • Points should expire after >18 months.

There is one golf management company that has marvelously crafted a loyalty program, which even incorporates yield management principles. A single golf course would be wise to emulate it. Here is the rewards chart of Troon Golf:

Tier Points Points and Cash 6 500 250 & $25 5 650 325 & $33 4 800 400 & $40 3 1,100 550 & $55 2 1,500 750 & $75 1 2,000 1,000 & $100

Do Loyal Customers Really Matter?

Consider the following:5 • Only 4% of dissatisfied customers voice complaints, but 91% never come back. • 24% of customers have posted comments online. • 80% of tweets regarding customer service are negative. • It takes 12 positive experiences to make up for one negative one. • It is six to seven times more expensive to acquire a new customer than it is to retain an existing one. • The probability of selling to new customers is 5% to 20%. The likelihood of selling to existing customers is 60% to 70%. • Loyal customers are worth ten times their initial purchase. • 70% of a buying experience is based on how the customer feels they are treated. • 75% are more likely to buy a brand that they follow on Twitter. • 90% of customers will pay a premium for superior customer service. If customer loyalty is essential, where it does start, how is it built, and how is it sustained?

5 http://downloads.helpscout.net/Help-Scout-75-CustServ-Stats-eBook.pdf

184 Every customer touchpoint provides the opportunity to build brand loyalty over the entire process of pre-purchase, purchase, and post-purchase, as illustrated in the following figure:6

You can’t shortcut the relationship. It takes time to develop customer frequency, duration and interaction — all of which the customer controls and all of which combine to become loyalty. A golf course achieves customer loyalty not because of what you do (sell a green fee, cart, merchandise, food, and beverage) but because you establish an emotional connection to the customers through every step of the purchase cycle. Their loyalty becomes a sphere of influence that gets your facility repeatedly chosen over the competition, not once or twice, but consistently. Some may confuse the recent emphasis on customer loyalty with the evolution of social media and the connected customer. Simply stated, customer relationship management is a system for managing a company’s interactions with current and future customers. All loyalty programs involve points, discounts, rebates, or privileges. While these retention/reward programs may increase transaction frequency, it is essential to differentiate between rewards programs, which stimulate additional purchases, and loyalty programs, which often cause the customer to become a promoter of the company, regardless of spending habits.

6 http://www.slideshare.net/Michael_Hinshaw/measure-understand-and-improve-customer-experience- mcorp-consulting?utm_source=slideshow01&utm_medium=ssemail&utm_campaign=share_slideshow, slide

185 Exercise

The survey conducted by Dr. Schoonover and Dr. Brey, discussed earlier in this chapter, was alarming in the significant differential between why people play golf and what is important to them vs. the perceptions held by the golf course management team.

Understanding why your customer comes to your facility is essential to be able to create the right vision, allocate the appropriate resources, and establish the proper fee structure to ensure the value accorded equals or exceeds that price.

We are becoming increasingly wary of long online surveys. We suggest dividing the 30 potential questions that are available for download here into three surveys that are available on your website, for a 5% discount on their next round, and send them to a segmented database via text message and via using Survey Monkey.

Once one knows what is essential to their customer, they can plan accordingly to fulfill those wishes, hopes, and dreams, as appropriate.

The exercise is summarized below and can be downloaded at jjkeegan.com:7

Step Description File Level of Explanation Retail Winning Format Difficulty Price Playbook Pricing 5 Golfer Survey Excel Entry There are 30 questions that a $25 Free – Loyalty and customer survey should include. Preference The use of this document will help your golf course craft a useful survey to ensure insightful responses.

Concluding Thought “I have not learned how to solve difficult business problems. What we have learned is to avoid them.” — Warren Buffet andCharlie Munger

7 https://jjkeegan.com/winninggameplan2020/

186 Chapter 9 — The Divining Rod

“It is tough to make predictions, especially about the future.” — Yogi Berra

Can’t Tell the Players Without A Scorecard

How would a basketball, football, hockey, or soccer game be played if there were no goals? Without goals, there is no game. The same applies to business: without a goal, there is no way to measure how effectively you are managing the business.

Financial statements are the goalposts of business. These reports are comparable to a doctor reviewing a patient’s x-rays. A tumor or broken bone is easy to spot. Is liquidity sufficient? Are the receivables at risk? Is the business adequately capitalized? Are the payables overdue, or the deferred liabilities extensive?

Reviewing the financial statements about how well a golf course is managed provides more information than from any other source. For a golf course, the financial information that each course usually relies on are:

• Balance sheet • Income statement • Cash flow statement • Key performance indicators • Monthly budget forecasts, including revenue, expense, and capital plans. • Customer utilization profiles

Historical financial statements include the balance sheet, the income statement, and the cash flow statement. The balance sheet reflects the financial strength of the golf course. The income statement mirrors the health of operations. The cash flow statement provides an analysis of the operating, investing, and financing activities and is a useful tool in determining the short-term viability of a company.

The sixth step to creating a “Winning Golf Course Playbook,” shown here, is gaining an understanding of the critical financial numbers that drive the successful operation of a golf course. Not all numbers have the same value.

187 We live in a world where attention to detail is rare. While the balance sheet, income statement, and cash flow statements are of anecdotal interest as to how the course has performed, there are more meaningful reports that determine future profitability. You need to have a real understanding of the key performance indicators and monitor them so that you can adjust daily performance to adhere to the monthly budgets.

Cutting to the Chase

It is easy to get overwhelmed with all the numbers generated out of the point of sale, tee time reservation software, inventory systems, food and beverage kiosks, accounting, and payroll systems. We can quickly lose focus and become distracted, solving immediate problems that are often emotionally charged.

The biggest challenge analyzing financial statements is how many facilities organize them in a manner that creates confusion rather than clarity. It can be stupefying to review the financial statements of golf courses around the world. Incredibly, there is no standard general ledger chart of accounts for a municipal, daily fee, private club or resort. As a result, the variance in the financial statements between courses is often unexplainable. The poor financial reporting at municipal courses is often a result of trying to adopt the City’s general ledger chart of accounts, which detail fire, police, recreational activities, and other responsibilities, and use it for a golf course.

Why consolidate the salaries from the golf shop, maintenance, and food and beverage under one general ledger account with no allocation to those cost centers? Why are fringe benefits masked? Why allocate the electricity costs for the entire golf course to the golf shop when maintenance uses the most substantial part? What is the purpose of

188 commingling revenue categories of green fees, season passes, and frequent player cards under one SKU? How could any manager not record the rounds played by season pass holders when determining the average revenue per round? We have seen it all.

We are of the firm opinion that departmental reporting is ideal. Here is an outline for an income statement, according to what we believe are Generally Accepted Accounting Principles (GAAP) for a golf course, which produces a meaningful representation of the operating performance of a public golf course:

Of note, several revenue categories influence all the others. For example, the rounds played, as reflected in individual green fees or a season pass play, are an accurate predictor of carts sold, merchandise bought, and food and beverage products consumed.

From an expense perspective, the restaurant operations at a municipal golf course are usually little more than snack bar operations. The vast majority of that revenue center, and the associated costs, often are contracted to a third-party under a lease. However, for daily fee and resort golf courses, the restaurant operations become more complex, and challenged, at best, to break even. Therefore, monitoring those costs, especially labor hours and the margins in food and liquor, draws increasing attention. At a private club, the dining experience can easily be a popular and profitable amenity equal to golf, tennis, swimming and other activities.

The most significant cost center in operating a golf course is (or should be) payroll, ranging from 48% to 54% of the total budget. If payroll is higher, overstaffing is likely. If payroll is lower, the adequacy of customer service should be examined.

189 When utilizing departmental reporting so that the appropriate salary expenses for the superintendent and their crew are allocated to maintenance, the maintenance department’s expenses are likely to be (or should be) the largest. They would range from 35% to 50% of gross revenue.

Because there are a plethora of numbers generated from the operation of a golf course, presented below is a chart of the key financial centers that should draw the attention of the management team:

Note: Understanding the highlighted areas in this chart is crucial to the management of the course.

The key areas to focus on are: green fees and season passes as measured by revenue per round, labor expenses, fringe benefits, cost of goods sold, and the cost of utilities.

190 Adapting these “hot zones” of required attention to each type of golf course has led general managers and directors of golf to concentrate on monitoring these six benchmarks:

Daily Fee - Municipal Private Club Resort RevPar = Revenue per Available Labor as a % of Gross Revenue Rounds Played by Members Round Merchandise Sales and Cost of Utilization Percentage Based on Guest Fees Goods Sold Available Rounds Total Starts Member Retention Labor Dollars per round Revenue per Round: Green Fee New Members + Waiting List Costs per Hole & per Round + Cart Fee The Conversion Ratio of Resort Net income Change in Initiation Fee Golf Rounds to Resort Room Nights Loyalty Rating from Customer Retail Sales per Round & per Cash Requirements Survey Room Night

These benchmarks serve as a good starting point for the efficient management of a golf course.

Peeling the Onion: The 15 Numbers that Matter

There is a slightly expanded set of significant numbers used to fine-tune the financial results of a golf course. Key Performance Indicators (KPIs) are vital tools to guide the golf course manager to optimize the financial performance of their golf course.

From a macroeconomic perspective, you can learn the green fee revenue of any golf course by asking two questions: What is your rack rate, and how many rounds of golf (starts) did you have during the past 12 months? If you multiply the rack rate times the number of rounds times 60%, you have a close approximation of the course’s gross green fee revenue. The question about the number of played rounds is deemed not to be intrusive — merely casual conversation at the course.

Beyond estimating green fee and cart revenue, based on your intuition as to the location of the golf course and the neighborhood you observed driving to the course, you can reasonably estimate the financial potential of the golf course and that of the competitors.

By viewing the size and condition of the clubhouse, examining the quality of the turf at the driving range, walking onto the practice putting green, and counting how many employees you see, you can make an educated guess regarding the economic viability of the golf course.

191 We glean insightful clues as to the profitability of the golf course from learning:

• How many season passes or memberships do you sell, and at what rate? The fewer, the better. • What is the revenue per round? If it is less than 50% of the rack rate, too many discounts are offered. • How large is the pro shop? A small pro shop with little inventory is unlikely to generate over $80,000. • Do golfers principally use the food and beverage services, or do you have a large number of outside dining guests for lunch and dinner? If the facility has only a snack bar or small restaurant, it is unlikely to generate over $100,000 in sales. • Does the facility have a large banquet and wedding venue? If so, revenues for those activities can exceed $1 million.

• How many leagues, tournaments, or outings are conducted? At most golf courses, these events average about 33% of total play.

Regarding expenses, several numbers provide the big picture:

• What is the fringe benefit percentage? If it is greater than 40%, the golf course is likely to be losing money. If the number exceeds 40%, It is advised to privatize the golf course through a third-party management company, where 22% to 26% is usually achieved. • What is the cost of water and utilities? If water is over $100,000, there is a real concern.

• Are maintenance expenses between 31% and 45% of total revenue? If maintenance expenses exceed 50% of revenue, issues abound. • How many labor hours dare you invest in maintaining your golf course? If in the Northern climate, budgets exceeding 17,000 hours generate an alarm. In a Southern climate, hourly budgets exceeding 28,000 hours are a reason for concern. • Does the outstanding debt exceed $1 million at a public facility and $3 million at a private club? If so, there should be a concern about the ability to service debt.

192 • What are your deferred capital expenditures (CapEx), in comparison to your capital reserves? If your deferred CapEx is greater than $3 million more than capital reserves, congratulations, you have entered the death spiral of declining revenues by providing a deteriorating golf experience. The cost of borrowing will exceed, in all likelihood, the ability to service debt through cash flow. The option for private clubs becomes member assessments. Each assessment is likely to result in a loss of members, up to 10%.

It is surprising that so few numbers can tell such a significant story about the probably financial success of a club. This methodology is called heuristics. Heuristics is a science founded on experience-based techniques for problem-solving, learning, and discovery that finds a solution, which is not guaranteed to be optimal but is good enough for a given set of goals. Where the exhaustive search is impractical, heuristic methods are used to speed up the process of finding a satisfactory solution via mental shortcuts to ease the cognitive load of making a decision.

For the golf industry, which mostly lacks a detailed financial or operational orientation, an analysis of 15 numbers provides a clear picture of the financial health of a golf course. Shown below are those “rules of thumb” applied to an 18-hole Midwest golf course facility:

193 Knowing and applying these 15 benchmarks to any public golf course will provide significant insights into its financial potential.

The golf course for which the above analysis was completed consistently has a cash flow deficit exceeding $200,000 for the past five years. Their response? We will raise green fees $1 and make no further adjustments. The impact? Negligible. Revenue per round will only increase by $0.60 per round, narrowing the deficit by $20,000. What does that tell you? They are not spending their own money but that of taxpayers — shame on them.

The 14 Reports That Provide Proactive Options

Beyond the key performance indicators, there are 14 reports that course operators can use to make informed decisions that will lead to an increase in the investment return of the facility. Six analyze the customers, and eight provide yardsticks of the facility. These results provide a flexible and deft management team with the opportunity to make real-time decisions and updates, which have the potential to have a positive effect on operational revenue. To view examples of these reports, click here.1

194 Report 1: Customer Distribution

Customer relationship management focuses on identifying a club’s best customers to ensure they receive service commensurate with their loyalty to that facility. At a golf course, 20% of the customers typically generate about 50% of the revenue.

Most courses invest a lot of energy and money in serving all of their customers and fail to target their key clients. The revenue generated by outings, tournaments, and leagues often produces up to 40% of the gross revenue of many public golf courses, whether they be a municipal, daily fee, or resort. North of I-80 and in the Midwestern United States, leauges are essential revenue components.

It always amazes me that in the off-season, from November through March, full-time staff members are passive and do little to nothing to solicit recurring revenue for the upcoming season. We believe a city’s public golf course should book at least 25% of its green fee income from leagues, outings and tournaments before the season starts. This report identifies the location of the low-hanging fruit ripe for picking.

195 Report 2: Customer Demographics

This report identifies the spending potential of current customers and their price sensitivity. A median household income above national averages would suggest that demand is inelastic, prices could be raised, and that the experience sought would require an additional investment in the course and the service levels to ensure customer satisfaction meets customer expectations.

On the flip side, if the median household income is low, and the age of the population is older, there will be tremendous resistance to price increases. At one community golf course we observed, the patron cardholders defiantly maintained that their $400 season pass was the appropriate price for the course. Learning that the average unlimited season pass play rate in the United States is $1,980 and that the deferred capital expenditures at the golf course (which was worn, tired, and in need of attention) exceeded $3 million did not make a difference.

Who is your customer? The ability to effectively market your facility is highly dependent on knowing the detailed demographics of your customers — their name, zip code, cell phone number, email address, etc. From direct mail to targeted emails to text messages to zip code analysis for print or other media ads, your club must collect this data. This report will give you a quick look at statistics that are vital for effective marketing.

Report 3: Customer Retention

The Customer Retention report reveals the turnover in the customer database. Although a facility might host 30,000 rounds, the unique number of customers served ranges from 3,500 in smaller communities to more than 11,000 in major metropolitan markets.

With 50% of the customers who play the course one golf season not returning the next, replacing them with new customers and communicating uniquely to the core golfer, it is also essential to reengage customers who no longer play your course., reacquiring lost customers is essential. We observed a Kansas City golf course that generated $45,000 in revenue in August and September by sending out an email to golfers who had played their facility in April but had not returned during May, June, or July. That reconnection with the customers generated a return visit, and it was simple, effective, and possible because the course captured salient golfer information at the time of the reservation.

The utilization of a call center or having an easy reservation wizard on the home page of your website are the optimum ways to glean customer data. Attempting to obtain this information at the point-of-sale counter during check-in is fraught with operational challenges. That is why, even in the most efficiently managed facilities, customer data are gathered only on up to 75% of the customers. Having a website or social media app that offers online reservations facilitates the creation of a customer database. A poorly managed golf course gathers no customer information or transaction data.

196 Report 4: Customer Spending by Class

Customer Spending by Class indicates which SKU generates the highest yield per transaction. Usually, that is the prime-time rate. Understanding the yield by daily green fees — adult (male vs. female, senior, junior), leagues, outings — provides incremental insights.

This knowledge facilitates creating the appropriate “buckets – time slots” on the tee sheet to optimize revenue. For example, should a prime time on Friday afternoon be available to all golfers or restricted by the class?

At a municipal golf course, if there is a differential in rates between residents and non- residents, it is often advantageous to reserve an appropriate percentage of tee times during the prime time specifically for non-residents. About 70% of municipal and daily fee courses offer unlimited play passes. Reserving prime tee times for pay-as-you-go customers is an effective strategy to increase revenue.

This report allows you to identify which group is producing the most revenue. It also helps you affirm the importance of that group by enabling you to create a targeted email message to the segment you identify.

Report 5: Customer Spending by Individual

Customer Spending by Individual identifies your best customers by their frequency of play and by their spending. This information is often very revealing. As we met with the management team at a resort, this report was being reviewed by the General Manager, who was stunned that one customer has visited the course only nine times, but has spent $45,000 during the past year. His comment was, “I know the gentlemen, but I had no idea that he was that important a customer to our facility.”

It was immediately suggested that the Director of Golf create an “amenity package” and have it delivered to the customer with a note of appreciation. It is in the DNA of all of us to be attracted to those who acknowledge our presence, celebrate our uniqueness, and appreciate our patronage.

This report identifies your most valuable customers, including those who should be cultivated for growth, the marginal customers, and those whose cost in serving them exceeds their revenue potential. Trim this last group from the active roster.

197 Report 6: Zip Code Analysis

How, what, and where should a golf course advertise? Are national, regional, or local publications appropriate? This report helps answer those questions by displaying the residential location of your customers.

For most courses, the vast majority of revenue generates from as few as four zip codes. Knowing those zip codes determines which publications offer optimum utilization of advertising expenditures.

Report 7: Merchandise Sales by Vendor

Merchandise Sales by Vendor provides for efficient ranking of vendors by sales, turnover rates, and levels of the current inventory on hand. It is our observation, from reviewing the list of many golf courses, that the vast majority order only a few items from many vendors, hoping to create a diversified selection of merchandise.

If the 80/20 rule ever applied, it would undoubtedly be concerning merchandise sales. Twenty percent of the vendors generate the vast majority of sales. It is always amusing how buyers will hang on to merchandise that is not selling throughout the season and will only offer a substantial discount at the end of the season to liquidate the slow- moving items. Reducing the price of an item, starting on the 30th day, with a certain percentage for every day it remains unsold, up to the cost, would provide capital to invest in other faster-moving merchandise.

The typical golf course should have about 15 to 20 vendors for the entire inventory. If this report extends to several pages, there is an excellent opportunity to reduce the number of lines carried, which will simplify purchasing and minimize stock on hand that has a low margin and low likelihood of selling.

Report 8: Reservations by Booking Method

The first contact a golfer often has with the facility is in booking tee time reservations. There are many ways to make tee time reservations: by an individual in the golf shop, via call center, via a kiosk, third-party broker, via the facility’s website, or social media application.

Reservations by Booking Method evaluates customer reservation preferences, such as calling center, phone, internet, and others. If I were operating a golf course, I would offer golfers a discount for reserving their tee times over the internet or via social media, if they completed a customer profile and entered a credit card that was chargeable in the event of a no-show.

198 This report would provide flexibility, through pricing, to encourage customers to use the medium that gives them the best customer service and gives the course the most significant amount of customer data.

Report 9: Reservations by Day of Week

The goal of any golf course is to maximize its revenue. We assume that weekends, when most customers are not working, are the busiest days of the week, and therefore, we set prices higher, often as much as 25% higher than on weekdays. This assumption often proves incorrect, however.

This report will display which days of the week are busiest and will facilitate your determining should Friday be set at weekend rates. Ultimately, the decision on setting rates is a subjective science, but having quantitative information available reduces the error rate significantly. This report guides you in setting the correct green fee.

Report 10: Revenue Benchmarks

This report will provide critical benchmarks on a revenue-per-round basis for the five departments generally accepted in financial reporting for golf courses: green fees, carts, merchandise, food and beverage, and others.

This report also shows the interrelationship between the departments. Green fees drive the volume of revenue for each of the segment categories.

Report 11: Revenue per Available Tee Time

The established net rate per round by time slot becomes an accurate predictor of likely gross revenue. If you ask at a golf course how many rounds (“starts”) the course is expected to achieve that year, you can accurately forecast gross revenue. A golf course will typically net 60% of its rack rate. Best practices suggest that well-run golf facilities will attain a net price per round of 70% to 75% of the highest posted green fee rate.

We demonstrated the forecasting power of the effective yield on a recent business trip to a trendy Hawaiian resort. Management there indicated that the course yields $145.60 per tee time on 78,600 rounds. Gross revenue we calculated was likely about $11,444,160.

It is not uncommon for Hawaii resorts to achieve merchandise sales that bring in income equal to 40% of the green fees and to earn an amount equal to 20% of the green fees in food and beverage sales. We guessed that this 36-hole course was doing around $18 million in annual revenue. Our guess was within $250,000 of the actual income. From learning the cost of water and utilities to knowing the increasingly important variables,

199 benchmarks, and standards in operating a golf course, we could predict the profitability of this resort.

The purpose of this report is to quickly identify time slots where you are hemorrhaging money vs. those that are performing well. The use of marketing tools and pricing strategies can help you improve your bottom line.

Report 12: Revenue by Department

This report represents gross revenue in the aggregate by the five key departments at the golf course. It allows a golf course manager to ascertain whether the departments will meet their budget for the month and, if not, which of the revenue centers underperformed. When contrasted to the benchmark revenue reports that reflect revenue on a per-round basis, this report aggregates total dollars generated by each department.

Revenue by Department focuses on revenue centers, and then the relationship between green fees, carts, merchandise, food and beverage, and other (range, instructions, etc.) is predictable. By knowing the yield on green fees, it is easy to forecast the yield per round at a specific golf course after ascertaining the following:

• What is the green fee walking? • Are carts required? • How large (in square feet) is the pro shop?

200 • Is it well-merchandised? (Think Sea Island Resort in Georgia and Grayhawk Golf Club in Arizona.) • How large (in square feet) is the clubhouse? • Is there a snack bar separate from the restaurant? • How many items are on the menu? • Are beer and alcohol served on the course?

Knowing these variables makes predicting revenue reasonably accurate. I know I’m in a great golf shop when I feel compelled to buy something unique for my wife that she would not be able to find at a department store.

Most frequently, though, I hear something like, “We carry a minimal line of understated women’s clothes, just basic staples because sales aren’t good.” I sort of chuckle. What came first? Low sales or no ladies merchandise to buy. I had to visit the four separate pro shops at Bandon Dunes, Pacific Dunes, Bandon Trails, and Old MacDonald to find one golf shirt for my wife.

Report 13: Rounds per Revenue Margin

Each golf course sets rates based on customer type, day of the week, and time of day. This report focuses on the differential between the resources consumed (the number of tee times used by a customer type) vs. the revenue generated by that customer type.

For example, volunteers and season pass holders often use the golf course to a far greater extent than they generate comparable revenue. On the reverse side, non- residents at a municipal golf course regularly contribute far more to the gross revenue than the percentage of rounds they play. At a university golf course, students and faculty are likely to dominate the tee sheets during prime time, playing on highly discounted passes. They are expected to play 30% of the rounds while contributing only 15% of the revenue. Alumni and those with an affinity for the university, visiting as a one-time event, may play only 10% of the rounds but generate 40% of the revenue.

The report displayed here effectively highlights which groups are detractors and which are supporters of the financial success of a golf course:

201 This report provides managers with insight on which groups are generating the highest “margin” to their facility. Are you seeking to raise revenue? The answer is often simple — provide the group that yields the highest revenue per round the greater access to the tee times and the course.

In this case, those with negative numbers use the facility to a greater extent than they are paying for. It suggests increasing the rates in these categories.

This report will also illustrate why season passes are usually a terrible deal for the golf course. Shown here is the excessive use of season passes for five years before adjusting the annual rate to fair market value.

202 Note the significant improvement in the revenue contribution margin was starting when implementing the modified rate structure. The course was losing over $100,000 per year. When the rates where changed, losses narrowed, and those who were historically abusing the passes complained vociferously about their right to play at the highly discounted rated.

Report 14: Course Utilization

In 2019, the average golf utilization — the number of rounds divided by the capacity — was slightly higher than 50%. This report provides a benchmark against that national average.

The report, presented below, also shows which hours within a month are near capacity, suggesting that an increase in green fees within those time slots might be appropriate. Alternately, the report shows the slack periods where, if dynamic pricing were in place, green fee rates might be lowered:

203 Key: Blocks in red indicate that the course has less than 40% utilization for the month. Yellow indicates usage between 40% and 60%, and green reflects the utilization of over 60%.

Another purpose of this report is that it will often reflect whether the tee time prices within the day are correctly set. For example, if afternoon rates are discounted too significantly, one might notice a significant drop-off in play the hour before the afternoon rates become effective. Such a scenario would suggest that three- or four-tier pricing might be more appropriate than a dual-pricing schedule.

The power of this report illustrates the opportunity to increase the revenue in a one- hour slot (the hour before twilight rates) by $250,000. It is my favorite operational report because it has the most significant potential to increase revenue. And for those using yield management software, this report provides the information needed to create initial targets.

Tee times are a perishable commodity. There exists a theory that if the green fees were accurately priced by day, hour and month, the course would operate at 100% of capacity. In comparison to the 50% utilization of a golf course in 2019, hotels were operating at 80%, while the airline industry was operating at near 70% capacity.

204 These reports, while relevant, provide little benefit if the insights created are not implemented. With this information, however, course operators find it easier to make informed decisions that will lead to an increase in the investment return of the facility.

Benchmarking Resources Developing internal benchmarks at a golf course is the first step in the professional management of that facility. The second step is the comparison of those numbers to industry standards.

If it were only that easy. Benchmarking is one of the many areas where the golf industry is lacking in comparison to other sectors. For example, the dSTAR Report (click here)2 serves the hotel and tourism industries by providing them information on how well their property is performing against the competition, providing benchmarking statistics and data intelligence to help them make informed decisions. Reports provided with daily, weekly and monthly availability include:

• Data and insights covering key metrics such as Occupancy (Occ), Average Daily Rate (ADR) and Revenue per Available Room (RevPAR)

• 18 months of historical data; year-to-date (YTD), running 3- and 12-month data, year-over-year percentage changes and indexes

Because golf is often a cash business, golf course owners are sometimes finicky and resist wanting to develop industry benchmarks. Management companies are also very resistant to participating in national benchmarking studies. To provide a platform on which their owners might review their performance causes great angst. This narrow- minded thinking continues to restrict golf courses from being professionally managed.

Why? The cause is a lack of sophistication on the part of many golf course owners as small business entrepreneurs. Because their livelihood is dependent upon the cash flow generated by the course, they hold a false belief that protecting their “trade secrets” is beneficial.

Two benchmarking services that were available five years ago, PGA PerformanceTrak and the R&A CourseTracker, no longer exist. PerformanceTrak compiled 50 reports presenting information by type of facility and ranking by quintile, and with the ability through advanced search criteria to monitor results nationally, by state, or by PGA Section for the number of holes desired.

Today, the PGA of America currently offers the “Facility Operators Scorecard.” Shown here are the representative numbers for 2018 based on data submitted in 2019 for municipal, daily fee and private clubs:

205 Criteria Municipal Golf Courses Daily Fee Private Golf Courses

Revenues 1,217,200 1,185,909 4,100,000

Expenses 1,202,017 1,033,896 3,180,500

EBITA 15,183 152,013 919,500

Net Income -215,076 -64,054 730,731

Merchandise 67% 66% 71% Food and Bev- 35% 38% 35% erage Days Open 300 310 300

Rounds 31,593 24,499 17,050

Peak Rate 49 56 85

Note: Merchandise and Food and Beverage are showing cost as a percent of revenue.

What confidence do I put in these numbers? Unfortunately, not a lot. They may be broadly representative of the financial performance of these types of facilities, but I believe that the margin of error is relatively high.

Why? The hierarchical structure of revenue consists of a control total, six departments, and 14 sub-categories. Expenses comprise a control total, seven departments, and 34 sub-categories. The sub-categories don’t equal the department totals, and the department totals don’t equal the control totals. They are within plus or minus 15%, but to an accountant like myself, the data should tie to the department and the control totals. Second, there is no disclosure as to how many courses are reporting, and which one could determine the statistical reliability for all golf courses. Third, the software is quirky. Depending on the browser one uses, clicking between the private club and daily fee information can be unreliable. Fourth, another benchmarking service,Club Benchmarking, reports the average revenue at a private club is closer to $6 million than $4.1 million. But it is better than having nothing.

The numbers that I do have much confidence in are those gathered in the “Public Golf Course Rounds/Revenue Survey,” which is published annually by the Colorado Golf Association. Eighty-seven of the public golf courses submit their rounds, green fee/ round, and green revenue for tabulation and distribution in the annual survey. Shown here is an extract from that report:

206 That’s precious data.

Concerning the disappearance of the R&A CourseTracker, there is a comparable service available regarding the sustainability of a golf course titled OnCourse (click here),3 which is a subscription-based service with a free 30-day trial.

The USGA has a comparable resource management program (click here)4 that includes a year-long subscription. It provides the ability to customize the course map and resources, perform “what-if” scenarios based on changes in maintenance profiles, detail resource consumption, obtain advanced weather information and track hole location and generate hole location sheets.

For those owners looking for more in-depth financial information, four alternatives are available:

• Complimentary monthly reporting by Golf Datatech • Subscription service by Club Benchmarking • Licensed national surveys by Club Managers Association of America, Golf Course Superintendents Association of America, National Golf Course Owners Association, and the National Golf Foundation.

3 https://getoncourse.golf/ 4 https://rm.usga.org/landing.html

207 Leading National Data Services

Successful operators must understand, manage, and anticipate specific vital operating statistics and industry benchmarks to maximize the bottom line.

Golf Datatech (click here)5 creates a monthly national rounds report, illustrated below. This report highlights changes in rounds from prior periods, temperature, and precipitation. Over 3,000 golf courses participate in this monthly service.

Golf Datatech also provides specialized market research covering retail sales, inventory, pricing, and distribution. With the plethora of FREE standard reports that Golf Datatech publishes monthly, a golf course can quickly determine which brands they should carry in each line of merchandise.

The Golf Datatech Retail Market Reports provide timely and accurate data on market share, unit sales, dollar sales, average pricing, inventories and distribution for golf balls, golf clubs (woods, irons, putters, and wedges), footwear, bags, and gloves. Also, Golf Apparel Reports are available covering the categories of men’s and women’s shirts, tops, bottoms, and outerwear. Would you go to Walmart to buy a Zegna Italian suit? For an entry-level golf course with green fees under $25, would you carry Peter Millar or Fairway & Greene? Nope. There is an unofficial rule of thumb. The price of a golf shirt sold at a facility should be comparable to its green fee.

5 https://www.golfdatatech.com/

208 Shown below is an example of a Golf Datatech report:

The process used by Golf Datatech is very comprehensive. Its website says:

“Sales data for all Retail Reports is accumulated monthly from hundreds of retail outlets and projected to the total market based upon proprietary models created by Golf Datatech.

Sales and inventory data is transmitted to Golf Datatech through each shop’s point-of-sale software system and includes units sold, actual selling price, and inventory remaining. Individual shop data is collapsed into totals within the database to ensure confidentiality.

Golf Datatech reports are currently produced monthly for the United States, the United Kingdom, Germany and Sweden.”6

Within the United States, Club Benchmarking (click here)7 offers business intelligence tools with strong ties to the “Why? How? What?” model. It provides the most comprehensive financial analysis for private clubs, with nearly 1,000 participating in the subscription-based service.

Starting at $2,495 per year, the client receives robust finance and operations benchmarks, including compensation for executives, and all hourly and salaried staff. The subscription provides a full suite of reports, such as tools for a detailed department assessment, advanced filtering and financial forecasting, and budgeting.

6 http://www.golfdatatech.com/research-products/retail-market-reports/overview/ 7 https://www.clubbenchmarking.com/

209 Club Benchmarking’s philosophy, which is on point, is that while every golf course is unique, the industry is governed by a standard business model, and clear vital performance indicators matter. And food and beverage is not a profit center. A key component of its model is an executive dashboard view applying standard business measures, such as gross margin, fixed expenses, labor, dues and debt ratios, etc., acting as a benchmarked alignment point for boards and managers.

Their superlative database report provides 14 Key Performance Indicators (KPIs) for private courses, some of which appear here:

A comparison of a golf course’s financial numbers to these industry benchmarks serves as a useful reference point to measure both strengths and weaknesses in a golf operation. It is about understanding the facts vs. opinion and changing, “I think” to “I know.”

Benchmarking is more about learning about your operations, not others, for it represents fact-based leadership, using factors to discharge your fiduciary duty by using ratios and indexes.

Club Benchmarking reports are straightforward to generate and export into PowerPoint, Word, and Excel, producing graphs and charts as shown here:

210 My Food Operation Is Eating Me Alive Profitable Food Facilities (click here)8 is a food and beverage consulting group that specializes in operations evaluations for captive market venues, including private country clubs and catering operations. Established in 1991, PFF has a client base numbering over 370 projects in 48 states and has reviewed and designed more than 140 private club operations worldwide.

They are frequently asked, “What should our food costs and labor costs be at a private country club?” To answer that, we must differentiate between a snack bar and a full- service restaurant. There are two distinct businesses at a club: 1) a la cart dining; 2) banquets and special events.

A typical full-service restaurant not associated with a golf course targets overall food costs at 30%, labor costs at 30%, and other costs at 30%, for a profit of 10%. Some operations are more profitable than others, and these numbers vary slightly depending on the concept.

As Michael Holtzman, President of PFF, highlights so adroitly — “A club has a unique set of challenges that make this harder, including: • Open on slow days • Big pours at the bar • Free items are given away (coffee in the morning, ice cream at dinner, etc.) • Member privileges (I belong to a club, so the food is less)

8 https://profitablefood.com/

211 As a result, the average private club loses $250,000 annually in F&B. There are slightly less than 4,000 clubs. The individual club food and beverage business lose $1 billion annually, …which is truly staggering, as the members ultimately assume these losses as part of their dues or assessments.

What is the fix? Daily fee golf courses and private clubs have higher food and labor costs. The essential benchmarks to monitor are:

• Sales for banquet, a la carte, beverage and % of sales for each entity • Food costs and % of sales • Labor costs and % of sales • F&B management cost and % of sales.”

The challenge arises when food costs average above 45%, and labor costs are higher than 65% or more. Here are some solutions:

• Food and beverage payroll is by far the highest expense. Management of this number daily by the entire food and beverage team will reduce these costs. • Calculate payroll daily. Most golf facilities can reduce labor costs by 15%. • Stagger the “start” and “end” times of staff. • Eliminate overtime. • Banquet servers should not make more than $15-20 per hour. • Add the service charge for banquets to the facility’s revenue, with the servers compensated based on the prevailing wage.

• Cost out every menu and catering item — target 20-25% banquet cost and 30-33% a la carte dining cost. If anything is over 40% food cost, change the portion, the ingredients, or the price. If it is still over 40%, don’t sell the item. • Re-engineer the menu and bold and highlight the more valuable items. Have less description and smaller text for the less profitable details.

212 The Barriers to Liquid Commerce

Is it harder to increase revenue or to decrease expenses?

A story is told about Henry Ford, the founder of the long-standing U.S. automobile company. The company was struggling during its infancy, and expenses were exceeding revenue. Everyone at a meeting of company executives was offering ideas as to what to cut. Finally, in exasperation and frustration, Henry Ford said, “I got the answer. We can cut all the expenses and just shut this place down. That won’t work. So let’s determine where we need to make an investment that will achieve our goals.”

Who knows whether that story is true. But it illustrates a great point.

Increasing revenue is dependent upon making assumptions with no certainty as to their realization. Because it is easier to address that which is known, expenses become the focus.

Travelers are very familiar with demand pricing. Airlines, car rental agencies, and hotels all have sophisticated software and staff to manage prices based upon availability, time, and demand. Very rarely do you pay the same price for a destination; the amount depends upon what’s booked and booking patterns (demand).

Tee times are perishable. They are like airline seats. Once the plane takes off, the empty seat is worthless, and once the 1:15 tee time comes and goes, it’s gone forever. The goal is revenue optimization.

Demand pricing has struggled to get a foothold in the golf industry. The options available to the course owner are limited because of:

1) Technology: the golf industry software is behind these other industries. Most software companies are very good at tracking and collecting money. Some are even outstanding at tracking customer or member information. However, few can provide sophisticated customer relationship management. Also, if a course attempts yield management, it is rarely an ongoing exercise because the available tools, including third-party tee time providers, are not used wisely. Sophisticated yield management requires a significant investment. The golf market is not big enough to justify such an investment by small entrepreneurs who head the leading golf software management companies. Development costs to build a yield management software system for golf would exceed $2 million, prohibitive for almost all golf operations.

213 2) The average aptitude and attitude of golf course personnel at public golf courses. They are typically technology phobic, and the introduction of a golf management system creates inherent resistance. Those who reject change cite costs, the inability to train staff, and objections to abandoning the human touch of customer service.

While golf courses offer up to 100 rates, depending on the time of the year, time of the day, and type of golfer, the pricing modules are developed with little data to support the rates posted. Some golf early bird, back 9, twilight, super twilight, night owl, beat the heat, pay the temperature in cold markets—all examples of demand pricing in golf. They set weekday and weekend prices based on a historical rate structure and current information on competitor’s pricing. Then, to stimulate rounds, they use emails, text alerts, and providing inventory to third parties — all tactical applications.

In 2018, some golf courses started introducing “filters” to their web-based applications. These allow a golfer to select, based on the time of the day, what they are seeking in terms of the level of amenities and service, as shown here:

Because a golf course has a perishable inventory of tee times, fixed capacity, predictable time-related demand, high fixed and low variable costs, it is an ideal industry for revenue management. Each course owner must ask, “Are you maximizing the revenue from your most perishable commodity: tee times?”

214 As the “rack rate, or “published rate,” is adjusted upwards, rounds fall. Conversely, lowering rates boosts play. If golf were free, in theory, the course would be at capacity. If the fee were $1,000 per round, no one would play. The essential question is: What is the appropriate mix between price and rounds, the combination that will maximize gross revenue?

Finding the balance between these variables is essential, as evidenced below:

Note 1: The cost per round, identified by color, is specified by the numbers on the far right.

The chart displays total revenue based on decreasing rounds but increasing revenue per round. Twenty-six thousand rounds at $38 per round generate the same revenue as 38,000 rounds at $26. Which is better? While some might maintain, there is no difference, in golf, the 26,000 rounds at $38 have a slight advantage, as the wear and tear on the course would be less. The ideal price is $32, which maximizes the revenue with the appropriate balance of rounds. However, settling on a median price that maximizes revenue is often not done at a golf course. Many individuals in the industry tie the cost of golf to their self-esteem and like to keep the rack rate high, believing it creates a differentiated brand.

Thus, yield management involves allocating the right capacity to the right customer at the right place and the right time to maximize total revenue.

215 Yield management is as much guesswork as it is a science, and attention to detail is needed to ensure that the competitive price pressures within the industry are correctly assessed. Exacerbating the burden are third-party intermediaries, coupon books, and competitive advertising.

One firm, Sagacity Golf (click here),9 hopes to educate the golf course management team with its performance tools Benchmark (a historical accounting of a course’s tee time utilization and yields), Forecaddie (rate recommendations based on historical data, market demand, and current bookings) and Power Pricing tools for groups, prime tee times and individual slots. In May 2020, they served 358 golf courses in 21 cities, where they provide a historical analysis of one course and compare the yield data to other courses in their competitive set.

Maximizing green fee revenue boils down to these simple facts:

1) Customer activity drives revenue. 2) There are many types of players with different demographics who will play at different times of the day, week, and year. 3) Tournaments and catering are critical ancillary components to a course.

It will be an exciting time when dynamic pricing becomes a standard practice amongst all public golf courses, and the astute golf course owner will be able to stem the third-party discounter, adversely impact the competition, and benefit financially.

In the interim, we should hope to achieve at least 75% utilization during the prime season, defined from sunup to two hours before sundown. Realizing that a golf course’s most profitable customer is often the repeat customer, consider the following:

1) All green fees and tournaments should be prepaid at the time of reservation with credit card guarantees. 2) No “complimentary” rounds during prime time. 3) Charge the weekend rate on Friday. 4) Tournaments should be booked for the “shoulder periods,” if possible. 5) Tournaments should pay a premium of 25% over the standard green fees for prime time and include supplemental pricing for food and beverage.

6) Carts should be mandatory for all tournament play. 7) Audit the starter sheet daily to avoid “situational morality.” Write the cashier’s ring number next to each player’s name.

9 https://www.sagacitygolf.com/

216 8) Correctly price and restrict season passes to low utilization periods. 9) Introduce value pricing only during slack periods.

10) The wave and crisscross are methods of starting golfers on the 1st and 10th tee for approximately 2 hours in the morning, midday and during the afternoon. 11) Put a winter enclosure on carts to encourage play during the shoulder seasons. 12) Don’t participate in charity cards that give away free golf. Package your own card with other local golf course owners, focusing solely on non-peak periods. 13) Put your course brochures in the off-course golf shops. 14) Have the staff write a weekly golf tip for the local newspaper. 15) Food and beverage at most golf courses are merely a break-even endeavor. To minimize the downside, provide quality service, which drives profit. The food must be affordable, and a beverage cart and halfway house will increase revenue. By adding a phone at the ninth tee, orders will increase. A best practice is to have a barbecue at the turns. It creates a great smell and enhances the experience. 16) Selling bottled aterw rather than providing on-course water coolers is a profitable revenue source.

The opportunities for the creative mind are great.

217 Exercises

With the key performance indicators illustrated in this chapter, it should take less than 30 minutes to create a realistic and achievable five-year cash flow forecast.

Illustrated below are the simple assumptions one needs to make to be able to generate a revenue forecast quickly.

The options to forecast expenses, determine earnings before interest, taxes, depreciation and amortization, and predict net income are not that complicated, either, as shown here:

218 Download the cash flow forecast (click here),10 and within a short time, you will have an accurate five-year projection.

10 https://jjkeegan.com/winninggameplan2020/

219 Step Description File Level of Explanation Retail Winning Format Difficulty Price Playbook Pricing TACTICAL TEMPLATES 6 Cash Flow Excel Advanced The operation of a daily $500 $250 Forecast – 5 fee or a municipal golf Years – Daily course can be forecast Fee/Municipal based on 60 controllable – 1 course variables. This worksheet facilitates sensitivity analysis to quickly project revenues, income, and expenses for the next five years for daily fee and municipal golf courses. This template is also available for 2, 3, 4, 5, and 6 courses with a consolidated worksheet tab and capital investment option alternatives. 6 Cash Flow Excel Advanced The operation of a pri- $500 $250 Forecast – 5 vate club can be forecast Years – Private based on 50 controllable Club or Resort variables. This worksheet facilitates sensitivity analysis to quickly project revenues, income, and expenses for the next five years for private club courses. 6 Cash Flow Excel Advanced The operation of a resort $500 $250 Forecast – 5 can be forecast based on Years – Resort 75 controllable variables. This worksheet facilitates sensitivity analysis to quickly project revenues, income, and expenses for the next five years for resort golf courses.

Note that the template comes with 30 minutes of online consulting on how to properly use via a Zoom meeting within 24 hours after downloading the templates.

Concluding Thought “Just because it is common sense, doesn’t mean it is common practice.” — Gilbert Enoka, All-Blacks Mental Skills Coach

220 Chapter 10 — AI Imagined

“At the end of the game, the King and the pawn go into the same box.” — Italian Proverb

Today’s Green Eye Shade and Calculator

Gone are the days of paper tee sheets and cash registers — hopefully. However, I am confident some lone course operator in the middle of nowhere still favors cash as their preferred form of tender, due to its tax savings opportunities. The COVID-19 pandemic provides a marvelous opportunity for a golf course to go “cashless.”

The foundation of every successful golf course is a technology platform that seamlessly integrates the elements of all profit centers into a streamlined information and reporting system that managers can proactively administer, based on current financial data. Understanding the role of technology is vital because software systems produce the numbers an adept manager can use to increase revenue and control expenses.

Generating timely, accurate, and meaningful operating data requires the proper selection, configuration, training, and utilization of a golf management system. With an hourly workforce, often seasonal, as the main ones entering the data, the accuracy of the information can be highly suspect.

Realistically, no golf management software system will precisely meet the needs and wants and desires of a municipal, daily fee or resort course in precisely the ways the golf course personnel desire.

Unlike the general business application software to which we all have become so accustomed (Word, Excel, PowerPoint, and Outlook), the user interface from one vendor software to another is dramatically different. Some use an icon-based approach while others use a hierarchical system reflective of a very dated DOS-based application.

There are very few who would be able to use any vendor’s software without additional assistance and training. The proper configuration of a golf management software system, with its numerous templates, fee tables, SKU charts, report preferences, and security- level permissions, reflecting the different policies and procedures of that facility, is a daunting task to fully organize.

221 Providing the insights and perspective required to optimize the investment return of a golf course by leveraging technology is the seventh step in the “Winning Playbook for Golf,” as shown here:

In a survey conducted in 2018, we learned that it takes a golf course up to 36 months to implement and fully use the features within the software.

Many Paths to Take — Most Take You Down a False Trail

Of the dollars spent building, maintaining, and operating a golf course, the lowest return on investment often seems to be from technology. Ironically, one of the tools designed to create simplification, to provide meaningful insights, and to facilitate the ability to manage a golf course effectively becomes one of the most frustrating aspects of managing a golf course. Such need not be the case.

Golf course owners can generate value from a computer in many ways:

• Better control of having uniform policies consistently applied. • Improved security through monitoring inventory theft, controlling price changes, and optimizing inventory turnover while minimizing cash investments. • Enhanced data collection of customer transactions to increase customer share. • Optimizing revenue per round through monitoring prices and effective yields. • Access to the course’s financial information from anywhere in the world via the Cloud.

222 However, despite the benefits, which far outweigh the cost, the installation of the integrated system is always met with understandable resistance from the staff:

• Individuals are already “at capacity” in a zero-sum game. • The volume of information available is paralyzing. • Humans value routine. • Despite the merit of innovation, most people will not readily adopt it if they have to change habits. • Staff who are intimidated by their lack of technical knowledge become aggressive and claim the software is flawed or lacks support.

Within a golf course hierarchy, the advocates and opponents for implementing a system can usually be categorized according to their level of responsibility, as follows:

The result is internal disagreement about the functionality required and which vendor to select. Many purchase decisions are made based on recommendations of friends, vendor’s brand image, the proximity of the vendor to the golf course, technical support, or price.

Rarely is the actual functionality of the software the real deciding factor. Often the decision-makers can’t accurately differentiate one software product from another. The look and feel seem to have a far greater weight in the decision than the actual capability of the product.

When a customer can’t differentiate between products, then, unfortunately, price, or friendship, becomes the criterion on which a decision usually is made.

223 All That Is Required

The information-system needs of a municipal golf course, a daily fee, a private club and a resort are vastly different.

We speculate that of all of the golf facilities in the United States, perhaps as few as 15% have one vendor handling all of the information-processing requirements. From third- party tee time reservations to tournament management to handicapping, to food and beverage, banquet and catering, to property management systems, to email marketing, and the creation and maintenance of a website, many vendors dominate a particular market segment.

So, what does a golf course need? To clarify the fundamental requirements, presented below is a chart highlighting the principal priorities at each of the varied types of golf courses:

Module Component Daily Fee Municipal Private Club Resort Accounting X X Credit Card X X X X Food and Beverage X X X Marketing Email X X X Customer Relationship Management X X X X Loyalty Rewards X X X Social Media X X X Text Messaging X X X X Geo-Fence Encoding Profile Image, Arrival Notifications X Hotel Interface X Membership X Merchandising X X X Pace of Play Tag Marshal System to Monitor Play X X X X POS Desktop X X X X Tablet X X X X Kiosks X Mobile Application X X Reporting Preformatted Reports X X X X Open Database Query System X X X X Tee Time Reservations Call Center X X X Electronic Tee Sheet X X X X Lottery X Mobile Application X X X X Online Reservations X X X X 3rd Party Tee Time Networks X X X

224 Module Component Daily Fee Municipal Private Club Resort Yield Management X X X Website Hootsuite X X X LeadLander X X X SumoMe X X X Zopim X X X X

While the above represents what a golf course team might use, the access to technology by golfers also includes booking tee times, digitally keeping score, posting rounds for handicaps, viewing websites, and reading digital magazines like Golf Digest, Golf Magazine and Links. Golfers also search online for golf course reviews, ratings, and apps for instructions. They purchase merchandise online, including GPS devices and rangefinders, and utilize swing analyzers and launch monitors. They also review blogs and participate in social forums like GolfClubAtlas, in addition to Facebook, Instagram, and LinkedIn.

It’s hard to believe that all of these activities and applications are necessary to efficiently manage a facility and optimize net income that is likely to generate only $1.4 million in revenue. Quick Tricks

Software can be expensive. But there are tools available for golf course operators that will help them self-evaluate their effectiveness in the deployment of technology.

One can have their website evaluated by HubSpot for free, as shown here:

225 We ran the test on March 20, 2020, with 75 million American citizens sequestered, and the loads on the usage bandwidth were taxed. Though I took solace that our site compared favorably to GolfNow.com, we immediately sent an email to the web development team to look at the performance and SEO (Search Engine Optimization) components to the site.

Beyond receiving an overall grade, HubSpot evaluates four components of a website: performance, mobile responsiveness, search engine optimization, and security.

The Performance tab provides insights on optimum page size, page request, speed, browser caching, page redirects, compression, and render-blocking. Mobile insights determine if the site is responsive, and the viewpoint provided to the user. SEO measures page titles, meta descriptions, heading, and the presence of a site map. Security ensures that the SSL certificate is present.

There are numerous tools available to have one’s site evaluated by entering into a search engine, like Hubspot’s Website Grader.

How effectively is your competitor marketing? You can learn their key search words by visiting spyfu.com (click here)1 and downloading your competitor’s most profitable keywords for paid and organic search for free.

Another handy tool is LeadLander (click here).2 This software enhances the impact of a golf course’s inbound and outbound sales and marketing efforts by providing information analytics about visitors to your website, particularly regarding anonymous visitors. It provides an instant email when a visitor clicks on a set number of pages — the criteria which you set. It also provides daily reports on who visits your site and what pages they view.

If an anonymous visitor views the membership or tournament page, that would be incredibly valuable information to follow up proactively, with a targeted marketing message. LeadLander is the ideal web application for a golf course that is seeking:

• New leads (even those who do not complete a registration form) • Validation of interest from cold calls • Real-time alerts for new & returning prospects on the website • To identify a steady stream of warm leads • Access to dynamic visitor history and click path activity on your website

1 https://www.spyfu.com/?alt=5 2 https://leadlander.com/

226 LeadLander’s plans start at $200 per month.

Want to stay engaged with your customers? Zendesk (click here)3 is another free and useful tool. With paid enterprise plans available, this web tool allows you to chat with your customers for free when they are on your website or send you an email message directly from your site, without having to figure out the proper email address.

Scheduling posts, developing content, engaging with your audience, and tracking the results of your social media campaigns can be daunting, even for the most talented social media guru. Starting at $29 per month, Hootsuite (click here)4 takes the pain out of social media marketing. You can create ten streams to Facebook, Instagram, LinkedIn, Twitter, and YouTube, posting content to develop and promote your brand while communicating important information about your facility. As an example, three streams are shown here:

Another free website tool is SumoMe.com (click here).5 SumoMe.com provides tools to automate your website growth by collecting emails from visitors to one’s site — featuring fully customized pop-up ads and banners that facilitate social media sharing and encourage email opt-in with integration to Wordpress, Shopify and Google Tag Management. A premium subscription is available for less than $500 per year.

Their simple goal is to help you grow your customer database by highlighting which of your marketing pieces are the most effective in attracting and retaining customers, as shown here:

3 https://www.zendesk.com/ 4 https://hootsuite.com/ 5 https://sumo.com/about

227 You might ponder why the blip on Feb. 29, 2020. That’s the day the monthly newsletter was published. We are demonstrating, as a small envisioning strategist and reality mentor to golf courses, that if we can gain value from these tools, the benefits to the golf course owner will be exponential.

There are a lot of supplemental software tools to help golf course owners more effectively and efficiently manage their golf course. Still, the critical decision is what is the primary golf management system to meet the unique needs of the facility best.

Mirror Mirror on the Wall — Who’s the Fairest of Them All?

In its 2018 edition, the Golf USA Tee Time Coalition published “Market Sentiment Study: Online Tee Time Distributors & Golf Management Software Providers” (click here),6 hoping to educate golf course owners on the benefits and perils of various software providers. Nine hundred and twenty-six participating Golf Course Owners, Operators, and Golf Professionals responded to the survey, creating a 95% degree of confidence with a 3 ½% margin of error on the evaluation of three components:

• Tee time/point of sale providers systems • Website design, dynamic pricing and marketing services • Tee time distributor

6 https://jjkeegan.com/wp-content/uploads/delightful-downloads/2020/03/2018-Tee-Time-Coalition- Market-Sentiment-Study_CA_FINAL.pdf

228 This report was a summarization of a more detailed analysis posted in June 2017 that had the stated goal of:

“The key objective of the research program was to gain a comprehensive view of how OTTAs (Tee Time Distributors & Golf Management Systems) are serving golf course owners and managers. The research includes general feedback on perceptions of OTTAs, challenges, and benefits around working with OTTAs and how well OTTAs perform on aspects of Golf USA Tee Time Coalition guidelines.”

Firms reviewed included: Clubessential, Club Prophet Systems, EZLinks, foreUP, Golf18 Network, GolfNow Marketplace, Golf Pipeline/GolfBook, Jonas, Quick 18, TeeOff, and Tee-On (listed in alphabetical order).

The top-rated firm at the time, Club Prophet, was not surprising. The net promoter score for GolfNow was also not surprising. They scored -26.

Regardless of the supplier, the top challenges faced by golf courses when working with tee time distributors related to pricing integrity, poor customer service, difficulty in using the software, and problems with trading tee times, double booking, and player cancellations.

The principal reason for selecting a tee time distributor was the hope for increased rounds and revenue, though nearly a quarter of respondents were also searching for a point of sale (POS) system.

Vendors that offer tee time distribution embedded in their golf management software license their services in exchange for securing up to three tee times per day from the golf course. Simply stated — it’s a bartered arrangement.

The leader amongst tee time distributors was GolfNow Marketplace, with 77% market penetration. TeeOff.com by PGA Tour and Golf18 Network are its closest competitors, used by 33% and 25% of owners and operators, respectively.

Golf management software companies fared better in the survey when judged easier to use, particularly the POS systems, and they allowed a golf course to collect and track more data. They are preferred due to reporting capabilities, technical support, and facilitating more efficient use of an employee’s time.

Regardless, the overall satisfaction of golf course owners and operators with industry solutions was low. Part of the confusion we believe is the multiple forms of payment golf software firms offer: barter vs. cash.

There are a plethora of software vendors that serve some aspect of the golf industry. If one Googles “golf management software,” 25 firms are listed (click here).7

7 https://www.capterra.com/golf-course-software/

229 They can be divided loosely into two categories: they prefer to barter for payment, or they require the golf course operator to pay a fixed cash amount. Separating the wheat from the chaff, measured by installed customer base, the most frequent payment arrangements between a golf course and the leading software vendors are highlighted in the chart below:

Software Firm Barter Cash Chronograph by Lightspeed Yes Yes Club Caddie Yes Club Prophet Yes foreUP Yes Yes EZLinks Yes GolfNow Yes Teesnap Yes Vermont Systems Yes

It should be noted in the chart above that those that select barter and not cash, do offer a cash price. The annual price quoted is so high that it is not a viable alternative.

But ratings based on four years ago is a lifetime in the golf software business. In April 2020, we conducted a review of the following golf management systems: Chronogolf, Club Caddie, foreUP and G1 by GolfNow. Our preference was for the first three firms listed, with Club Caddie by Jonas being the narrow favorite due to its features for a single course operator. However, we believe the answer is the trouble lies with “the archer and not the bow.”

In educating golf course owners, change never comes as fast as one would hope. The clear majority of golf course owners are stuck in an operational quagmire. They fail to think tactically or strategically and muddle along, underperforming with mediocre results. Attempting to inform the masses is a fruitless task.

The reality is that the majority of positions, excluding senior management, require less than high school education. The responsibilities of those in the pro shop are the same as Nordstrom clerks or Starbuck’s baristas.

We believe the proper use of technology is a fundamental asset that can bolster the revenue of a golf course. Golf course owners can use marketing software tools, many of which are free, to increase their database, more effectively communicate with their customers, and better monitor the success of their efforts.

230 Requirements are Daunting — The Audience Is Challenging

It is with a great understanding and sincere sympathy that I emphasize the challenges that a technology software vendor faces in serving a golf facility. The hurdles include:

• No system, despite promises of some vendors to the contrary, is developed and supported solely with the firm’s internal resources. The computer’s operating system, database, credit card processing, and reliance on the Internet are some of the dependencies that a technology vendor must rely on for their solution to function. The integration of multiple platforms is necessary. Fingers are crossed that integration doesn’t break the core functionality of the golf management system when one component is upgraded. • The informational needs of a municipal, military, daily fee, resort, and private club differ based on the type of customer and the policies of the golf course. That is the reason one firm dominates in the private club sector, Jonas/ Constellation software, and another firm dominates in the public sector, GolfNow, a subsidiary of the Golf Channel, NBC, and Comcast. Neither of the sector leaders’ software would meet the needs in the other sector, as well. • The variety, depth and breadth of modules (point of sale, tee time reservations, inventory, and merchandising with open-to-buy, food and beverage, member billing, customer relationship management, event scheduling, lessons, website, marketing, accounting, payroll, etc.) are diverse, based on each facility having its preferred configuration of SKUs (stock-keeping units) and general ledger accounts. Unlike Word, Excel, and PowerPoint, a golf management system requires substantial configuration before utilizing it. • The hardware devices from file servers, desktops, laptops, kiosks, iPads, and social applications displayed on an iPhone, each with their own operating systems, all create unique obstacles for consistency. • The ability of a public golf course, whose gross revenue averages $1.4 million, to invest extensively in software systems is limited. • Capable yield management software has never been developed for the golf industry because the development cost, likely to exceed $1 million, would not produce a positive return on investment unless the golf facility agreed in a revenue-sharing split, and that is unlikely. • Software is current only on the date it is released. The financial strength of a software vendor to develop new releases taxes their internal resources and capital. When a large management company selected the G1 platform of GolfNow, the decision was predicated mainly on the financial strength of GolfNow to continue to aggressively release updates based on the evolving needs of their golf course clients.

231 • That was probably a flawed decision if the GolfNow research and development department had only 30 programmers, as understood by many within the industry. It took GolfNow effectively a decade, after acquiring a booking module from a hair salon, to release the G1 product in 2019, with credit card integration still pending. • In contrast, Chronogolf by Lightspeed has an entire team of developers envisioning and coding now what they believe will be the required applications five years hence.

The challenge of being a software developer in the golf industry is the rapid acceleration of change in technology and the constant custom development required. This is best manifested in the more successful software vendors acquiring other firms in the industry to increase market share.

Since the fall of 2019, the following transactions have occurred:

Buyer/Investor Seller Battery/Clubessential Vermont Systems GolfNow EZLinks Jonas/Constellation Club Caddie Lightspeed Chronogolf Northwoods Chelsea Systems Supreme Golf foreUP

After an investment exceeding $40 million, Teesnap is for sale by its owner, Allegiant Airlines, a public company (ALGT). Allegiant revealed in its January 2020 earnings call its intent to divest of Teesnap by the end of 2020. That could mean a sale, spinoff or closure, putting Teesnap customers at risk on several levels. Does a new owner charge more money? Will a closure follow an announcement, and will there be adequate time to find a replacement? The point is, any decision on technology must include due diligence on the strength of the company and the likelihood of it staying in business over the long haul. Organic growth of golf course customers does not exist — new courses are not popping up on the landscape. Instead, companies like Teesnap and others must steal business from one another. Not all will succeed.

All that glitters is not gold. Being a software developer in the golf industry highlights the axiom, “Capitalism creates, capitalism destroys.”

The Next Generation

We have entered an age of dizzying acceleration. Due to an exponential increase in computing power, climbers atop Mount Everest enjoy excellent cell-phone service, and self-driving cars are taking to the roads.

232 We are living in an interdependent world that is flat. The individuals who lived in a shantytown in Cape Town that we visited two years ago were amazingly aware of American politics and its players, citing a precise knowledge of our government. Internet access was available in these lodges in the bush. Wuhan, China sneezes, and the world experiences a spreading pandemic from a virus.

Here are some compelling statistics regarding how technology is changing our culture: • 76% of U.S. consumers shop online, 16% once per week.

• 53% browse on mobile, 37% via desktop, and 10% by tablet. The majority make the final purchase via desktop.

• U.S. consumers spent $517.36 billion online in 2018. (Source: Campus Press Yale).8 Online shopping conducted through smartphones accounted for roughly $117 billion in the U.S. in 2018. Sales made directly through smartphones could hit $209 billion by 2022. (Source: Retail Dive)9

• 69% of online shopping carts are abandoned. (Source: Statista)10

• The average open rate for a marketing email from e-commerce brands is around 15%. However, emails specifically targeting consumers after they have abandoned their online shopping carts have an open rate of more than 50%. (Source: Moosend)11

• More than a quarter of U.S. adults report being online “almost constantly,” and 43% of adults go online “several times a day.” Young adults are more likely to be continually connected, as 39% of Americans 18 to 29 are “almost constantly” online. (Source: Pew Research)12

• 10% of U.S. adults do not use the Internet. (Source: Pew Research Center)13

The average citizen now spends an average of 4.5 hours a day online. In a survey we conducted in 2017, golf managers indicated that they spent 38.9% of their workday on the computers — so much for personal contact with the customers!

Technology has advanced faster than many humans have been able to adapt.

8 https://campuspress.yale.edu/tribune/e-commerce-will-make-up-17-of-all-us-retail-sales-by-2022/ 9 https://www.retaildive.com/news/mobile-sales-to-hit-117b-in-2018/530852/ 10 https://www.statista.com/statistics/477804/online-shopping-cart-abandonment-rate-worldwide/ 11 https://moosend.com/blog/cart-abandonment-stats/ 12 https://www.pewresearch.org/fact-tank/2018/03/14/about-a-quarter-of-americans-report-going-online-almost-constantly/ 13 https://fitsmallbusiness.com/online-shopping-statistics/

233 Airlines software allows you to schedule a flight, pay for the tickets, select a seat, receive a boarding pass on a mobile app, obtain bag tags for the luggage, and scan your boarding pass at the gate. Flight announcements and departure notices are sent via text, which we now accept as standard. The screen below shows how you can check-in for a flight in Denver or pick up your rental car at Hertz in Philadelphia.

Restaurants are now featuring mobile apps to order food, pay your bill, and obtain an email receipt, as illustrated below at Outback Steakhouse and Chili’s.

Society, as a whole, continues to be shaped by emerging technology. Golf should be no different.

234 We have seen a transition from desktop applications to iPads to the cell phone, where email, though preferred as the primary means of communication in 2019, is now being replaced by text messaging. The use of mobile devices is up over 50% during the past five years, based on some industry surveys. Mobile technologies have transformed the way we live, work, travel, shop, and stay connected.

The golf industry is behind other industries, at an increasingly exponential rate, in our ability to understand and communicate effectively with those playing golf.

Turned on a Dime

Whether you read this in two months, two years or twenty years after publication, if one mentions the word “Corona,” it is suspected more will think about the virus that closed the world rather than the tasty beer from Mexico.

In March 2020, life changed in an instant, with one-third of the world’s population “locked-down” in their homes with only permission to go out to seek medical attention or to grocery shop.

To assist golf course owners, the Golf Course Superintendents Association of America posted every day at 5 p.m. the status of course closures by state. It included gubernatorial directives regarding whether golf could be open, and if not, whether maintenance crews were allowed to maintain the property. They highlighted whether there were local considerations and listed individuals to contact by state (click here).14

The National Golf Course Owners Association issued (click here)15 well-thought guidance on how to encourage play, while American Golf Corporation closed all of its courses in the United States. Los Angeles County mandated its facilities cease operations, and even the leading club fitter, True Spec, saw government recommendations to close its locations in Chicago, Miami, Los Angeles and New York.

In response to the virus, Arcis Golf, a talented management company that guides the operation of many courses, including the Cowboys Club in Dallas, Texas, sent out this email on March 26, 2020, at the early stages of the pandemic virus:

“Dear Members and Guests:

In this ever-changing environment, we want to provide an update on how we are operating today. First and foremost, the safety of our Members, Guests, and Staff is our highest priority. We are implementing and strictly enforcing additional measures and precautions, as recommended by the CDC, throughout the property. We appreciate your patience and understanding at this time.

14 https://www.gcsaa.org/advocacy/priority-issues/coronavirus-pandemic/50-state-coronavirus-update 15 https://jjkeegan.com/category/blog/

235 Here is a list of the items we currently have in place: Before arriving at the golf course: • If you are sick or are feeling ill, do not come to the golf course. • Effective immediately, all tee times must be made either online or through the Arcis Golf mobile app. No walk-up play is allowed until further notice. • Over the next few days, we will be introducing two new methods of payment for your round of golf — online check-in through the Arcis Golf App and the ability to prepay for your round through our online tee-time booking websites. Please look for an email from your club with the specifics of both new programs. • At this time, we are only allowing credit card payment for all transactions. Credit card terminals will be sanitized regularly throughout the day. Upon Arrival: • The CDC’s requirement for the social distancing of 6’ is strictly enforced on property. We will not be pairing any golfers with unknown individuals. • Please arrive no less than 10 minutes before your tee time to minimize gathering in all areas. • We have increased spacing on the driving range, which reduces our capacity. Please limit your time to accommodate all members and guests. Range balls are being cleaned regularly between golfers. • Merchandise sales will be limited to golf balls, gloves, and tees. Club rentals will not be available until further notice. Please do not plan on sharing clubs with any golfers. • Restaurants and snack bars will offer take-out only. Beverage carts will be available in compliance with local mandates. All water stations have been removed from the golf course. • All golf carts will be thoroughly sanitized before they are set-up in the staging area. Golf carts will be a single rider. • Public spaces within the clubhouse will be closed to all members and guests. We will increase the sanitation of our restrooms, golf shop, point of sale terminals, and all high touch surfaces. On the golf course: • The cups on all putting greens are modified to allow for ball retrieval without the need to touch any surfaces. • Sand bottles have been removed throughout the golf course. • Rakes will not be provided for bunker raking at this time. Please do your best to smooth disturbed sand with either your shoe or golf club. • Do not pick up your playing partner’s clubs during play. • We ask you to please forgo the traditional after the round handshake and invite you to create your own socially-distanced salutation. We’re fans of the putter salute! • Please ensure that you wash your hands (while humming or singing your favorite tune) before a quick departure from the club.

236 We look forward to providing you with a safe haven in the future. Thank you, Cowboys Golf Club.”

The mobile app Arcis featured is shown here:

What strikes you in the Arcis message? To me, it’s their reliance on technology — requiring golfers to book online, pay by credit card, and check-in via mobile app.

Another set of golf courses in Mecklenburg County, NC, implemented comparable procedures as golfers check-in themselves via a kiosk shown here:

237 Golfers can prepurchase rounds of golf online with Chronogolf technology. They safely enter their credit card information at that time. When they arrive, they check-in using the kiosk — a straightforward process that takes less than 30 seconds. The course provides sanitizing wipes and hand sanitizer so golfers can sanitize and wipe the kiosk down before they use it. The solution worked very well except if the round was not prepaid and the golfer did not have an account with the course established, which allowed for the secured storage of their credit card information. Again, the theme is that technology was the central focus of facilitating the golf course experience.

Exercises

Are you keeping pace? The average software system has been installed at a golf course for over seven years. While some annual updates may have been selected, the plethora of new applications have most golf courses behind. This checklist will provide you with a quick view of how your golf course is doing and will grade you based on your self-evaluation. This exercise is summarized below and can be downloaded at jjkeegan.com:16

Step Description File Level of Explanation Retail Winning Play- Format Difficulty Price book Pricing TACTICAL TEMPLATES 7 Technology Excel Easy In today’s Inter- $100 $50 Integration net-connected Checkpoint world, customer service and financial reporting are rooted in the ideal application of technology. This worksheet highlights the options available to ensure that you are leveraging technology properly.

Note that the template comes with 30 minutes of online consulting on how to properly use via a Zoom meeting within 24 hours after downloading the templates.

Concluding Thought “It is much easier, as well as far more enjoyable, to identify and label the mistakes of others than to recognize our own.” — Daniel Kahneman

16 https://jjkeegan.com/winninggameplan2020/

238 Chapter 11 — The Magic Potion

“Your legacy becomes what you leave behind, not engraved in some stone, but what is woven into the lives of others.” — Pericles

Turning to Home

The golf industry generates $85 billion annually, employs 2 million people, has 29,000 members of the PGA, and one in nine people in America play golf. Just think, as a reader of this book, you have a sincere interest in what is a fantastic sport.

Warren Buffett has coined the phrase “circle of competence.” You intuitively understand what lies inside this circle; what lies outside, you may only partially comprehend. His partner, Charlie Munger, says the best piece of advice is, “You have to stick within your circle of competence.”1

Human beings are fascinating creatures.

We systematically overestimate our knowledge rather than underestimate it. We also methodically miscalculate our chance for success.

What humans are best at doing is interpreting all new information so that our prior conclusions remain mostly intact. We manage our lives mostly on assumptions and find that our business and personal relationships are with like-minded people.

We prefer information that may not be entirely correct to no information and find that everyone aligns their opinions and accepts the supposed consensus.

We all yearn for consistency and seek a pattern that can be followed quickly. Hopefully, this book has challenged some of your biases, and it has aroused your curiosity to change our strategy, tactics, and operational view of how the golf experience should be created and delivered to the customer.

Of all of our quirks, perhaps the biggest is our inability to predict the future. Forecasters

239 fall into two categories: those who don’t know and those who don’t know they don’t know. There has yet to be a forecast by a precisely correct expert.

It is thus with great hesitation, admitting to being prey to all of the foibles listed above, that we venture the following predictors, knowing full well the succeeding words have little probability of coming true, though we somehow believe they will.

This chapter explores how one should anticipate the future evolution of the game and the associated golf experience, and prepare for it today. Set the optimum plan for today by using the lessons learned from implementing the seven steps shown here for the “Winning Playbook for Golf Courses.”

What Won’t Change

It is our opinion that there will always be a bifurcation in the interests and focus of traditionalists vs. recreational players.

Representing traditionalists are various associations, particularly the USGA, the LPGA and the PGA tours, and a small sector of private club members who relish the history, the fundamental concept that the game is challenging, and the elitism that is associated with the sport.

Traditionalists will maintain significant influence and control over the game’s brand and will define the sport to the entire world. Though they represent a small percentage in numbers, they will always wield a disproportionate influence of the game’s future direction, based on their capital and central position of consolidated authority.

The industry will remain fragmented, with Associations representing their interests 240 over those of the golf course owner who, without providing the product, there would be no industry. Associations will continue swimming in their own pool lanes rather than removing the ropes so all swim in the same pool.

As a form of television and spectator entertainment, the golf tours will appeal to about one-third of U.S. citizens and significantly less internationally. The National Football League, Major League Baseball, National Basketball Association, the National Hockey League, college football or basketball, attract avid fans with tremendous loyalty to their teams. Golf is an individual sport, so that certain professionals gain media attention. Still, few will have the adoration or longevity shown by teams in organized leagues.

Despite many initiatives to welcome new golfers to the game through well-intended programs, i.e., PGA Junior League developed by the PGA, First Tee, Girls Golf and others intended to mitigate the cost of entry and the difficulty of the game, growth in the number of golfers will be consistent with the increase in population. Ventures like Welcome2Golf, launched by the National Golf Foundation in 2019, will not exponentially grow the numbers, based on new programming, lessons, or improvements in club manufacturing that make the game easier for the recreational golfer.

Green grass courses will continue to be financially threatened, resulting in many more closures for the next decade, with over 4,000 facilities at risk. The value of land, particularly in major metropolitan areas, makes it an easy decision to sell for a handsome gain vs. slog along in the daily trenches of golf.

The hurdles for the golf course are many. The business is dependent on the U.S. economy in the aggregate, without secular declines in the stock market or real estate.

Finding qualified service-oriented labor is a hurdle. Labor expenses will continue to be a downward draft creating financial pressure. Accelerating expenditures for water, fertilizer, and energy will always draw attention. Environmental concerns will always be foremost in the minds of many.

Third-party tee time vendors will continue to put pressure on courses charging appropriate fees for the experience provided. The PGA’s efforts to establish its tee time network announced at the 2020 PGA Merchandise Show will likely never achieve meaningful market penetration.

The length of time to play will remain at the forefront. Alternative options, i.e., nine holes or two-person scramble leagues, will not be widely embraced. As a result, derivatives from entertainment enterprises like Topgolf, BigShots, Drive Shack and others will proliferate until market saturation causes a contraction among those that are heavily debt-leveraged and thinly capitalized. Offshoots will include a small indoor learning facility that features simulators and lessons and sports bars with local craft breweries.

241 The tremendous success of the South Broadway Country Club in Denver, CO (click here)2 illustrates this trend.

Booking tee times should be bought online with prepayment required like an airline or sports events. However, the concept will meet significant resistance because a “captain” reserves for a group, and collecting from the other players is troublesome.

Recreational players will continue to be attracted to golf due to “shot euphoria” — the sensation of hitting that rare shot well. However, dress at the course is unlikely to change significantly. David Owen stated in the Spring 2017 edition of Links magazine, “Golf’s dress codes may seem archaic, but they do the game — and its players — some good.”3 He asserts that by dressing appropriately before teeing off, you are implicitly endorsing golf’s association with civilized behavior.

Social media influencers will remain a presence whose impact and financial benefit to the golf course will be long debated. I hope that such influencers become unnecessary, as golf courses become adept at marketing through a website presence, mobile application, email, text, social media, and paid social efforts, though it is unlikely.

To their misfortune, the majority of golf course owners will continue to believe that they are in the golf business, rather than the entertainment business, as emphasized here:

2 https://www.southbroadwaycc.com/ 3 Links Magazine, “Viewpoint – Dress for Success,” Spring 2017, pg. 14

242 A Soothsayer’s Prognostication

We are often asked, “How do you see the future for various types of golf properties — private, daily fee and municipal golf courses — during the next five to ten years?”

Macroeconomically, if golf were an ETF (exchange-traded fund), I would short the industry. Today there are 24.2 million golfers. Forecasts by research firms project that by 2030 there will be between 21.8 million to 26.1 million golfers. Despite the growth in the U.S. population, the percentage of participation for golf will fall, led principally by the increase in ethnic minorities.

But this book is not about the industry in the aggregate, but instead how a golf course owner can implement shortcuts to long-term financial success. While this book has a weighted emphasis on public golf courses, i.e., daily fee, military, municipal and resort facilities, due to the fact they comprise over 70% of courses in the United States, it is essential to understand the speculated direction of golf in the future.

All private clubs are not exclusionary. Instead, they are inclusionary, contrary to the opinion held by many. People with like values, backgrounds, family composition, and income naturally congregate with like individuals.

There will always be a sector of exclusive private facilities, perhaps the top 2%, that are committed to excellence in each area of their operation. Recognized as great institutions are Platinum Clubs of America in five categories: Golf, Country, City, Athletic, and Yacht Clubs, in a biennial vote of Club Managers, Presidents, and Owners. The election process is orchestrated by Club Leaders Forum, and validated by an independent third party. Established in the early 1990s, Platinum status in the private club industry is akin to a Michelin star for restaurants, or an Academy Award in the movie business.

Carefully crafted selection criterion, as approved by the Club Leaders Forum Advisory Board, comprising 16 of the most respected General Managers from world-renowned clubs, are used as the basis for the election. The criteria includes excellence in staff and professional service levels, facilities and amenities, governance and fiscal responsibility, adapting to changing times, and universal recognition.

A decade ago, Club Leaders Forum introduced Platinum Clubs of the World, to address the growth of private clubs in emerging markets and more recently added Platinum Clubs of Asia Pacific and Platinum Clubs of Europe.

Clubs so designated receive this plaque:

243 Jeff McFadden, General Manager of Union League of Philadelphia, stated, “Platinum Clubs are how Clubs are measured in the industry; it is the benchmark of excellence.”4

J.J. Wagner, past President of the Club Management Association of America, was asked to define Platinum status. He said, “Platinum recognition is something all clubs should strive for; it is the most respected award in the industry. Clubs, their members, management, and staff should be proud to be acknowledged as a Platinum Club of America.”5

The best-managed clubs defer to the General Manager’s leadership or have a robust central member who strictly oversees the governance of the club. Private clubs that govern through an extensive committee system where rotation is frequent amongst the volunteer members tend to be the weakest managed. The personal agendas of strong- willed committee members can often create havoc. I often think the most effective committee is that of one person. For each person added, the efficiency decreases by 10%, so that when the committee exceeds ten members, it is pointless and challenging to reach a consensus.

Click here6 to view those clubs voted in 2019-2020 as noteworthy.

For the other private clubs — historically focused on serving their member’s psychological needs of esteem, accomplishment, and gaining the acceptance of others — they will evolve and balanced by the practical requirements of providing for the

4 https://clubleadersforum.com/pcoa/ 5 https://clubleadersforum.com/pcoa/ 6 https://clubleadersforum.com/pcoa/the-2018-lists/

244 family a holistic environment for their recreation and social relationships. For these mid-tier and entry-level private clubs, representing 20% of golf courses, we anticipate they will migrate to offering a diversity of activities focused on wellness, such as exercise via golf, tennis, swimming, yoga, fitness facilities and metabolic training. New services provided will include diet & nutrition, sleep and stress management, and the quality of life encapsulated in a spa-like environment.

The leading private club consulting group in the golf industry is the McMahon Group. In January 2020, they published an impressive 163-page report titled, “McMahon Pulse Survey – Outlook 2020.” The survey asked respondents to rate the importance of a particular aspect of their club in attracting new members today and in the future. Here are the results:7

By (clicking here),8 you can purchase the report for $99. Look at the numbers, and you will see a significant increase in health and wellness programs, from 64% to 82%, and children’s programs, from 72% to 83%. Other improvements are in family programs, short-game practice areas, pool and racquet facilities, and dining programs, while decreases incurred in the importance of the golf course and the history and tradition of the club.

The vast majority of private clubs are primarily dependent on the economy and consumer confidence. The turmoil witnessed during the COVID-19 pandemic has created fear amongst many boards. The ongoing issue for member clubs is how to attract and retain sufficient members and funding sources for renovation projects.

7 http://mcmahongroup.mybigcommerce.com/categories/Pulse-Survey-Reports/, page 5 8 http://mcmahongroup.mybigcommerce.com/categories/Pulse-Survey-Reports/

245 Peter Nanula, CEO, Concert Golf Partners, believes:

“…most clubs, even in prestigious neighborhoods, are not filled like they were back in 2006 or long ago when private clubs occupied a different place in people’s lives. Most clubs we speak with are about 30-40 members short of where the board would ideally like to be – sometimes more. So, the club temporarily reduces its initiation fee or offers a dues promotion to attract new members. In this environment, proposing a member-fund renovation plan is a tricky endeavor.”9

Thus, over the past decade, more than 10% of U.S. private clubs have closed. They’ve been converted to public, semi-public, or acquired by a municipality for the open green space.

Daily fee golf courses and resorts, particularly the high-end ones, will continue to do very well financially because of superior management and greater flexibility in staffing, policies, procedures, and rates, compared to municipal or military golf courses. Comprising two-thirds of facilities, the fundamental change we forecast is empowering the customers to serve themselves. With the cost of labor representing 48% to 54% of total revenue, golf course apps will become all-encompassing, from booking a tee time to paying via cell phone upon arrival to requesting the beverage cart to order in the restaurant. The function of servers will be solely to create a relaxing ambiance, serve food, and clean the table. Tournaments, events, and the reduction in labor costs are essential for this segment to continue to prosper.

Daily fee golf courses introduce an interesting risk element to the ownership of a golf facility. While ownership in private clubs can be equity (member-owned) or non- equity, one has to commend the daily fee owner for the gamble they make owning a golf course.

The National Golf Course Owners Association, consisting of 1,600 members representing 3,300 facilities, is one of the primary organizations focused on serving the daily fee constituency with an educational program, an annual conference, and advocacy amongst State Legislators. Some debate the efficacy of this group.

As for municipalities, if the estimated 2,480 facilities were required to operate exclusively as a stand-alone business enterprise without financial support from the general fund, we believe about 40% would close. The Achilles heel for municipalities consists of excessively high fringe benefits, labor unions, and the ineffective governance structure of self-serving Golf Advisory Committees that depress rates through a plethora of season pass and punch card options. They are also affected by the challenge of retention and termination of employees and the election of City Council members, mainly volunteers, who have long personal agendas and short backgrounds on how to operate a golf course successfully. No one should view a volunteer as an altruist. Nearly all volunteers have their agendas.

9 Concert Partners, “Is Your Club Recession-Proof? The Club Capital Paradox,” page 3.

246 The harsh reality is that every municipal course in America could close tomorrow, and golfers would still have a plethora of opportunities to play, albeit more expensive and perhaps more inconvenient to access.

Despite these woes, we believe the municipal market will slightly grow as city governments purchase failing golf courses to protect open space and preserve the quality of life for their citizens.

The broader question is, “Should Municipalities Even Be in the Golf Business?” The quick answer is yes. However, the type of golf experiences a municipal facility should provide and how to fund it is up for debate.

The features of the municipal courses that will excel vs. the ones that will suffer are summarized below.

The top golf courses share these characteristics:

• They are all located in the 16 states within the most significant 20 core- based statistical areas in the United States, where demand vastly exceeds supply. They average 7,831 golfers per 18 holes within a 10-mile radius. • The annual spending by residents for golf within 10 miles per 18 holes averages $9.4 million. • The median MOSAIC profile index, reflecting the attitudinal behavior of residents within 10 miles to golf, is a negative -9.7%, which indicates that the ideal golf course would have a slope rating of 120, which, ironically, is the average slope rating of a golf course built before 1980.

In contrast, the bottom 100 share these characteristics:

• Supply vastly exceeds demand as they average only 488 golfers per 18 holes within a 10-mile radius.

• The annual spending on golf by residents within 10 miles per 18 holes averages $356,740. • The median MOSAIC profile index, which reflects the attitudinal behavior of residents within 10 miles of golf, is a negative -.23.06%. The index indicates that the ideal golf course would have to be an entry-level facility with a slope rating of 113, an executive length golf course, or a par-three facility.

The characteristics of the winners vs. the losers are obvious.

247 Many golfers believe golf courses should receive the same level of financial support as city-subsidized pools, parks, and libraries. That argument falls on deaf ears, at least to me. There is no economic incentive for private enterprise to fund open park space, pools, libraries, or any of the other social services the government provides to enhance the quality of life for its residents. Golf is different. There are viable alternatives beyond municipal golf courses.

Thus, a city council needs to answer the question, “Is the Golf Course a Community Asset or a Business Enterprise?” Golf courses provide many benefits to residents, including, but not limited to, the following:

• A healthy recreational outlet for residents and enhancement to the overall quality of life. • A game that inculcates in its participants’ life skills, such as courtesy, judgment, honesty, integrity, sportsmanship, respect, confidence, responsibility, and perseverance. • A venue to attract visitors and prospective residents. • An excellent reflection on the image/brand of the city and community. • Enhancement of local property values. • Golf-related jobs and income to the community through purchases, wages, and taxes. • An exceptional venue for scholastic use in practice rounds and tournaments. • A venue for hosting charity tournaments and other fundraising activities. • Positive use of stormwater retention and city effluent water. • An officeor f those retired. • Effective use of green space.

There are two principal reasons municipal golf courses struggle. First, the vast majority of municipal golf courses offer rates far below the experience provided. The best illustration is season passes, typically priced at 60% below their fair market value. What is the solution? Municipal golf course rates are like a buoy in the ocean. The bottom feeders set rates in the industry for everyone. Rates must rise by 40% per hour for a golf course to be economically viable if the goal is to service existing debt and create capital reserves for future investment.

The second hurdle for municipal golf courses is that the labor component at a municipal course has three aspects that don’t challenge daily fee operators: 1) Retention and termination of personnel, 2) Labor Unions, 3) Fringe Benefits.

The termination of an underperforming municipal employee environment is a tedious task that can consume upwards of 18 months, based on the required numerous warnings and personnel reviews. Employees at municipalities are protected from dismissal, except for the illegal use of drugs, theft or misappropriate sexual behavior. Second, labor unions serve a vital role in America — in manufacturing concerns that

248 are non-seasonal and provide a stable 40-hour workweek. Golf doesn’t meet those criteria. It is highly seasonal, and during the peak of the season, 60+hour-work weeks are standard. While municipalities dance around providing “comp” time during off-peak periods, the formula results in excess wages paid.

The third hurdle is fringe benefits. We have observed fringe benefits paid by municipalities ranging from 35% to 65% of base pay. The fringe benefits of many municipalities exceed 40% of base wages, which is the threshold in which the cycle of death commences. It is noteworthy that the fringe benefit paid by third-party management companies is only at 22%. It is often economical to pay the $75,000 – $100,000 management fee for merely the savings in fringe benefits.

The result is that municipalities frequently understaff to compensate for the inflated wages. The outcome is often an inferior experience for the customer. The consequence is the financial underperformance of the golf course when the course conditions are substandard, grumpy undertrained personnel staff the pro shop, or a plethora of volunteers receive free golf.

Considering that it costs $100,000 annually to maintain 150 acres of open park space, the position could be taken that to the extent that the golf course is losing less than $100,000 per year, the continued operation of the facility is economically prudent.

However, the current operational model for municipalities is unlikely to change in the short term. Reforms will first be introduced to these facilities by third-party management companies retained to cure the massive losses now occurring.

What is Missing?

Even though golf rounds are up only 1.5% for 2019, various segments increased slightly based on the numerous introductory programs to golf: Get Golf Ready, Welcome2Golf, PGA Junior League, First Tee National School Program and others. An exception is those between 6 to 18 years of age, whose participation is nearly double that from 20 years ago, as reported by the National Golf Foundation. Also, those over 70, because of advances in medical practices, are playing longer in life.

All will agree that if growth in golf will come, it is not from having existing golfers playing more frequently, but rather from attracting and retaining new entrants to the game.

How can we accomplish that? The hurdles can be high.

Here is an illustration of the challenge. One golf owner stated to me that for a “Women’s Golf Day,” two new players sat in their cars at the clubhouse texting each other. Were they dressed correctly? Will there be clubs to use? Will they feel comfortable?

249 Beyond the additional bromides that golf takes too long, is too expensive, and also too difficult, we can soften one of those hurdles. There are only two barriers to attracting a new customer to the game: fear of embarrassment and equipment.

The cost and access to proper equipment is a significant barrier to the game. Here is an idea for your consideration.

Seventy-five percent of all customers rent snow skis or snowboards. Eighty-five percent of all bowlers use a ball provided by the facility. However, at most courses, if they have rental sets, and many don’t, the clubs are of such inferior quality, it almost ensures that the customer will have a bad experience. Also, what beginner is going to invest over $2,500 in a new set of clubs and golf bag after a few lessons? Not many.

We need to change the culture in golf to where courses around the country offer new quality rental sets consistent with the brand experience of their facility, i.e., high-end resorts (Callaway, TaylorMade, Titleist) and mid-tier (Cleveland, Cobra, PING). Think about it. First, the financial model makes sense as it generates a positive return on investment, as shown below:

In our research, we learned of resorts that offer rental clubs for $65 – $85 per round, with two complimentary sleeves of balls. The rental clubs are viewed as a profit center.

More important than the financial benefits are the quality aspects of improving the culture surrounding golf.

250 While golfers rotate drivers, wedges, and putters on some varying frequency, the average life of a golfer’s clubs, in a July 2019 flash poll we conducted, is shown below:

Ask yourself how many of those golfers would like to upgrade their equipment if they could buy a one-year-old set of quality rental clubs for your wholesale cost at the end of the year. Also, as golfers use the rental clubs throughout the year, I would surmise some will ask, “Can I buy these clubs now?” What a perfect problem to have.

If every lesson taught to an entrant to the game included new equipment, ask yourself, wouldn’t that increase the probability of them seeking to play golf based on increased enjoyment and success in using the proper equipment?

Ask yourself, if it was well-known that all golf courses carried new rental equipment, how many more potential golfers might be enticed to try the game, and how many recreational golfers would be tempted to play more? My thought: a lot!

Ask yourself, do you think the equipment manufacturers would be clamoring for your business? If 3,000 golf courses each bought 50 sets of golf clubs at wholesale, it would generate $150 million in revenue for the equipment manufacturers. The sale would provide club manufacturers great exposure for their business and increase word-of- mouth sales from golfers hailing their new equipment.

How do you execute the concept?

251 Our research indicates that the number of rental sets required varies by the type of facility and the number of holes, as illustrated below:

Number of Holes Green Fee and Ideal Number of Cart Fee Rental Sets 18 <$40 15 18 $40 – <$80 20 18 >$80 40

Variables that would influence the number of rental clubs would include the number of holes, lessons offered, tournaments, and tourists. Because of the permutations of left- and right-handed, women vs. men and juniors, the composite of one’s equipment order might likely be:

The chart above is representative of a high-end daily fee golf course, resort, or private club that sponsors lots of large tournaments. In the middle tier, a balance between premium and standard sets with varying prices might be advised. On the low end of the spectrum, for those lacking capital, it is suggested that entry-level facilities could pool their money and rotate rental clubs between their facilities, based on the scheduling of events and tournaments.

252 The most common rentals are made by a traveling golfer, by someone who doesn’t have access to clubs currently, or less frequently, by the novice or very occasional golfer who hasn’t invested in clubs. To me, this last group is the ideal customer to focus on for rental clubs because the ease of getting premium equipment might induce them to play incremental rounds. The novice has a tough time embracing the fact that the club rental is typically as high or HIGHER than the fees they pay to play the game, but that is also a genuine incentive for them to purchase a set that they rent at the course. In essence, they have tried the clubs, liked them, and typically get an outstanding deal on them. This golfer is the person that we should look to target with a focused marketing plan and strategy to not only get them to use the clubs, but maybe even buy them.

What we expect is the generation of additional revenue for same-day purchases. It is not uncommon to have a guest request a particular set of irons, driver or putter after using it for a day. Those clubs can sell for full wholesale, or even cost plus 10-15% is typical.

There is a caution. There is a definite need for a staff member to monitor the sets daily and report missing or broken clubs. Charging a set replacement cost of irons/ putters and hybrids/metals generates additional revenue. The standard set price is cost plus a 15% administrative fee that guests are informed of when they sign off on the rental agreements.

To stimulate the purchase of “rentals,” I would hang pictures of the LPGA and PGA Tour players who are using that equipment with a simple moniker, “These Clubs Are Good Enough for These Players. How About You? Make Your Game Come to Life with a Rental Set of the Finest Clubs.” That slogan defeats the argument that the rental clubs selected are not of sufficient quality for the player.

For the golf industry to grow the game, it must be with the single step of each golf course expanding their club rental program — that will create a bridge over troubled water that the industry now finds itself immersed in.

It Could Be a Great Life

The concept of a golf facility merely as a golf facility needs to change. Perhaps a successful model for that diversification is evolving with GreatLIFE Golf & Fitness (click here),10 of Sioux Falls, South Dakota, which introduced the concept in 2015, with three golf courses and one fitness center. Their model of unlimited golf, unlimited fitness, and free bowling at meager costs has gone over very well, as shown here:

10 https://joingreatlife.com/

253 They now operate six golf courses, have another 12 “affiliate” golf courses where their members get free green fees, as well as 18 fitness centers, and five bowling and family fun centers. The focus is on being the “friendliest and the cleanest” and that “you only get one chance for a first impression.” GreatLIFE has invested significantly both in its facilities and its staff in delivering on its mission and goals. They built two new clubhouses and did significant remodels on two others, including fitness centers in their former banquet rooms. They added GPS and Bluetooth to all their fleets of carts, plus a cooler with four bottles of iced water, towels, tees and ball markers, along with sand and ball washers.

Sioux Falls is a city of about 175,000 people, and GreatLIFE has attracted over 32,000 members. Throughout the summer, they have free family clinics on Sunday afternoons with a reception afterward, adult clinics on Monday and Tuesday afternoons, and children’s clinics on Tuesday mornings. One of their most popular programs is “Play Everything” clinics, which are held throughout the year to show kids the connectivity of sports, that the motion for golf is the same for tennis, baseball, throwing a football, or kicking a soccer ball.

As importantly, they have always been heavily involved with charities and civic organizations, especially children’s charities. Through the golf events they host and sponsor at their courses, and their GreatLIFE Challenge on the Symetra Tour, they raise over $500,000 annually.

The GreatLIFE “PLUS” program provides members free movies at local seven theaters, free baseball and football game tickets, significant discounts at numerous local attractions like the zoo, butterfly house, an aquarium, and water parks.

GreatLIFE is one model that is worth following to see if it can be replicated successfully in other cities in the United States.

254 Another model that is a departure from the typical golf club is the Blue Sky Golf Club (click here)11 in Jacksonville, FL. In 2014, the Club underwent more than $1.5 million in renovations to the golf course and clubhouse, as shown here:

The Blue Sky website highlights the Golf Club’s many attributes:

“Blue Sky features an updated driving range, including Toptracer, with day and night practice capabilities. There’s plenty of fun including shuffleboard, cornhole, and more than 20 flat screen T.V.s; a full-service restaurant; and 9-hole and 18- hole golf options. “We also offer 3-hole and 6-hole based on availability. Blue Sky Golf Club has no dress code – come as you are and enjoy all of the great recreational amenities!

At Blue Sky, no one is concerned about how much you make, where you are from, or what clubs you play with. We just want you to bring your friends and family out and have fun! We believe a more relaxed atmosphere, with great customer service and affordable rates, will be a game-changer for the industry.”12

What is compelling about the Blue Sky Golf Club is the clubhouse, where they have made it one large area that functions as the pro shop and the restaurant, reducing the need for labor while creating a “sports bar” ambiance to attract and retain the golfer after the round. At a daily fee golf course, the requirements to stock extensive merchandise isn’t a cost-effective use of resources.

The Toptracer range, shown here, where groups are served food and beverage from the clubhouse, has become very popular.

11 https://www.yelp.com/biz_photos/blue-sky-golf-club-jacksonville-11 12 https://golfbluesky.com/

255 The Toptracer technology that gives a golfer the ability to precisely measure the distance, direction, ball speed, and spin is marvelously entertaining.

Golf, as a singular activity at a facility, is at the crossroads. The activities and functions of a daily fee, municipal, private club, and resort all serve different purposes. How they evolve will determine their future financial success.

Transaction vs. Personalization

What all golf facilities have in common is that historically they have offered a “transaction-based” encounter with management and staff. Check-in at the pro shop counter, visit with the starter, interact with the cart attendant, and order from a server in the bar or dining area. Years ago, members would receive a statement in the mail, review it, write a check, and mail or drop the payment off at the club. Today, most clubs use “automatic debit.”

Another thing these facilities have in common is that they are an outlet for socialization. Each person seeks a connection with others.

Most golf courses have a robust set of amenities and extensive programming. They all are striving to provide the most exceptional conditions, the best customer service, and value for the dues or green fees received. Differentiating one facility from another in a transaction-based world is challenging.

256 Doug Hellman, former Vice President of Business Development for Kemper Sports and former Managing Director of ClubCorp’s ClubLife Division, is one of the foremost minds on how the golf industry will involve. He says:

“The essence of a golf course is its culture. The fifteen-year member of a club has a far different expectation than the new member. The desires of millennials are dissimilar to those over 55 years of age. The club of the future will have many fun ‘energy zones’ with different vibes attuned to each member’s interest. The General Manager and the Director of Golf’s roles will evolve to become ‘ambassadors,’ chatting up and ensuring the needs of the member are anticipated in advance rather than reacted to upon request.

Service at the highest level is not merely a transaction. Core to exceptional service is it must resonate with each customer or member and be memorable. In order to consistently achieve this level of service, staff must constantly seek to do the unexpected at the most opportune times. This core belief must be ingrained in the culture of a team.”

Mr. Hellman envisions that each staff member at a private club will have an earpiece and microphone. As club members are moving from one location to another, the staff member will inform another staff member as to the anticipated presence of that club member so that they can greet the member or golfer by name and have his favorite beverage waiting.

One of the legendary locker-room attendants was Mr. Thomas Horrell, the recently retired locker-room ambassador at the Castle Pines Golf Club in Castle Rock, CO. At the end of every day, he reviewed what every member and guest preferred and recorded it on a card. He would then review the tee sheet for the next day and ensure that he had his “notes” available to anticipate what the individual would like to have, i.e., an Arnold Palmer, Mr. Mastalir?

We even forecast that the club will create separate “energy zones” attuned to each golfer’s interest, i.e., sports bar, relaxed dining conducive to conversation, mini-office space, and more.

On the Cutting Edge or Over the Edge?

One firm, Pacesetter Technology (click here),13 is on the leading edge, introducing geofencing with member-based mobile applications that enable the club to provide the attentive service thought to be the standard for the future.

13 https://pacesettertechnology.com/

257 The mobile apps offer a hyper-personalized experience with name recognition software. Beacon technology divides the clubhouse into a zone that alerts management and staff as members enter a room or approach a table and push notifications to ensure that events of interest to members can be delivered crisply.

The software is designed for the club seeking to strengthen its service levels to members by acknowledging the new family units and dynamics and redefining wellness.

With time being such an essential component of one’s experience on a golf course, Tagmarshal has developed a highly sophisticated operations platform to monitor pace of play, as shown here:

258 The software reduces the average round by 17 minutes, as evidenced at Erin Hills, Links at Gateway, and the Wisconsin Club. It enhances the player experience, optimizes efficiencies and adds revenue, and reduces costs at an operation.

The software includes course and analytic reports, a geofencing mobile, the easy assignment of tee times, and produces a heat map of where golfers have traversed the course.

The heat map feature has broad implications in optimizing the maintenance costs of a course by allowing the agronomic crew to reduce the course’s footprint.

What is assured is the communication with the customer via multiple channels of communication will be vital. As individuals are migrating from desktops to laptops to iPads to iPhones, the development of mobile apps with various functionality for a golf course will be critical.

A firm that is addressing this need is Gallus Golf, as shown here:

Beyond providing a mobile app to the golfer, Gallus strives to provide consumer self- service that benefits the course by making it easier and more convenient for golfers to spend money with them, even when they are not physically at the course. A new feature under development by Gallus Golf is mobile payment with functionality similar to that found in the Starbucks mobile app. Consumer self-service also benefits operational efficiency and reduces labor costs.

Gallus developed a marketing strategy that encompasses email campaigns, text messaging push notifications, and social media management on Facebook, Instagram and LinkedIn to ensure the proper monitoring with analytic reporting of the course’s brand.

259 The majority of all generations embrace text messaging. Two-way communication with the course is likely to evolve over the next decade. The ability of a golfer to text questions to the course staff, book a tee time, check-in, pay, receive updates on course conditions — we forecast that all of the above will become standard and powered by mobile technology.

There are likely to be a plethora of existing firms and new entrants offering this software. The key questions the golf course management teams need to ask are: • What is the software provider’s revenue source — the course (strongly preferred) or the golfer? • Who controls the database of golfers — the course (mandatory) or the software firm? • Is the mobile app exclusively branded for the golf course? • Does the golf course exclusively control all messaging?

We can expect to see new entrants capitalizing on social media. For example, Popsters (click here)14 analyzes the efficacy of 12 social networks, including Facebook, Instagram, Twitter, YouTube, TikTok, VK.com, OK.ru, Telegram, Coub, Tumblr and Flickr.

The analysis is divided into six sections: • Audience engagement by day • Engagement by the hour • Activity s.v text length • Activity yb day and hour vs. text length • Audience engagement for various post formats (by content-type) • Average Engagement Rate based on audience size and average posting frequency

As the world turns, we forecast that by 2030, the golf experience will center around three concepts: • Installation of tangible objects, i.e., think of an Art Exhibition, to uniquely define the facility • Personalization • Data Segmentation

All three of these will come with increased compensation to the staff, development of a more appealing work environment, and a commitment to the defined culture of the facility.

14 https://popsters.com/blog/post/social-networks-users-activity-report

260 Golf 2030

What will the golf experience look like in 2030?

With the help of some industry leaders — Eddie Ainsworth, PGA Executive Director, Colorado PGA; Mike Cutler, Billy Casper Golf Management; Jim Hajek, PGA, Director of Golf at Fossil Trace; Mark Pfingston, PGA, Director of Golf at Golf Club at Bear Dance; and Del Ratcliffe, PGA of Ratcliffe Golf Services overseeing four golf courses in Charlotte — we speculated as to how the experience might evolve.

Shown here are the initial touchpoints from the desire to play until loading the golf bag on the cart:

As the golfer begins the round heading to the range via a cart, Golfboard, or merely carrying their clubs, the future opportunities to enhance the experience are shown here:

261 Will these come to pass? Facial recognition and artificial intelligence are evolving quickly, creating many ethical debates. Brad Smith, President of Microsoft, and Carol Ann Browne, Senior Director, External Relations & Executive Communications, refer to the challenges in their compelling book, “Tools and Weapons.”15 Shoshana Zuboff, Ph.D. and professor at Harvard in “The Age of Surveillance Capitalism – The Fight for A Human Future at the New Frontier of Power,”16 chronicles the massive amount of consumer data that is being aggregated and sold. The trade-off is clear: convenience vs. privacy. While some would debate you can have both, it is unlikely.

The evolution of social media and increased concerns about creative environmental destruction is an essential tenet of capitalism.

The biggest challenge facing the golf course is the cost of labor.

With the evolution of GPS, we can expect that autonomous mowers will be developed, albeit with some fits and starts. Jim Hajek, PGA, Head Golf Professional at the impressive Fossil Trace in Golden, Colorado, stated, “If I could reduce the size of my maintenance staff by 25% with the use of GPS equipment that allowed for the raking of bunkers and fixing ball marks on all 18 holes before a 7:00 a.m. shotgun, count me in.” Though the investment for five mowers would be nearly $350,000, the return on investment could be under five years.

15 https://www.amazon.com/Tools-Weapons-Smith-Brad/dp/1984879227 16 https://www.amazon.com/Age-Surveillance-Capitalism-Future-Frontier/dp/1610395697

262 Another significant investment in the future could be, “What is the ideal clubhouse?

I sense that they will vary greatly depending on the vision of the facility and the fees charged. For the golf course whose green fees are under $60, the concept of one large “community center,” which handles functions currently performed by the Pro Shop and the Restaurant, is anticipated. As I noted earlier, the Blue Sky Golf Club in Jacksonville, FL, implemented that concept with great success.

Mark Pfingston also believes that the golf course clubhouses will evolve from a singular purpose to a multi-faceted facility, combining indoor and outdoor elements, with each one having their own private and unique environments. Mark thinks that golf courses in the northern part of the U.S., with a season of fewer than 300 days, must diversify their activities to facilitate being open year-round.

He sees the competition as bowling alleys, movie theaters, sports parks, and the plethora of youth sports that divert the attention of parents. He ponders why golf hasn’t embraced the concept of year-round golf for juniors, leveraging the indoor aspects. His creative mind envisions the screen image, not of a golf course, but of a Spiderman or Superman movie. The junior aims to hit the villains on the screen with his shots for points, similar to an arcade.

While golf simulators are expensive, they provide fabulous benefits, such as being able to retain staff year-round, providing indoor training for juniors and new golfers throughout the year, and facilitating custom club fitting. And there is a great advantage to learning indoors. The bad shots, Mark states, are not magnified indoors, like they are outdoors, and learning on mats as a beginner is far more comfortable than on grass.

Other options are modular components, like those offered at wework.com, which members can rent hourly, and business meeting space that features golf simulators and screens for PowerPoint presentations. Also, weddings, baby showers, and other activities historically handled by private catering firms will be an integrated service of the evolving golf facility.

For the high-end daily fee golf course, a multi-level “wheel and spoke concept” might evolve to eliminate noise pollution of the golfer in shorts at the bar interacting with the individual in a tuxedo or impressive gown attending a wedding. Administrative offices for the staff would likely be sequestered away from the traffic flow. The clubhouse might evolve as a business center, an outing facility, and oh yes, a venue for golfers.

The concepts presented above have a central tenet: providing the customer with a consistent experience where they are empowered to serve themselves and leveraging technology to create personalization in their experience.

263 A Hope and a Prayer

What is for sure is that golf is a lifestyle, and those who choose to join elite private clubs will seek several significant personal touchpoints for which they are willing to pay a premium. Their needs will be met through data segmentation, leveraging the next generation of technology to anticipate rather than react to the customer’s needs. Joining a club will be equivalent to joining a clique.

I speculate hopefully that many of the items and challenges discussed in this chapter will have become passé in the future as our culture evolves, and that new and exciting service-leveraged technology and enhanced data segmentation will result in personalization.

But for the masses, it will be interesting to watch and participate in the evolution of that which is a good game and a challenging business.

The beauty of the sport is that it teaches etiquette, compliance with rules, self-discipline, and time management. Thus, we all have a responsibility to continue and support the business of golf through the reasonable exercise of our ability and skills.

It is with this hope, and the motivation for writing this book, that golf courses thrive, providing an excellent experience for family, friends, and business associates that enhances the quality of all our lives and the civility in which we live.

264 Concluding Thoughts

“Yin-Yang: In the black, there is some white; In the wrong, there is some right; In the dark, there is some light; In the blind, there is some sight.” — Venerable Abhinyana

“The journey of life is not to seek perfection but to seek acceptance that we are flawed and be comfortable with that conclusion.” — Father Patrick Dolan 267 Appendix A: Recommended Reading

Education is a lifelong journey. Reading opens our minds to the independent thoughts and perspectives of others.

Here is a list of books we recommend that provide a framework for your management of a golf course:

• Dan Ariely, “Predictably Irrational” • Clayton M. Christensen, “Innovator’s Dilemma” • Jim Collins, “Good to Great” • Lolly Daskal, “The Leadership Gap” • Rolf Dobelli, “The Art of Thinking Clearly” • John Doerr, “Measure What Matters” • Charles Duhigg, “The Power of Habit” • Michele Gelfand, “Rule Makers, Rule Breakers” • Malcolm Gladwell, “Talking to Strangers” • Malcolm Gladwell, “Blink” • Chip and Dan Heath, “Switch — How to Change Things When Change is Hard” • Sally Hogshead, “How the World Sees You” • Steven Johnson, “Farsighted” • Daniel Kahneman, “Thinking Fast and Slow” • James Kerr, “Legacy — What The All Blacks Can Teach Us About the Business of Life” • Geoffrey A. Moore, “Crossing the Chasm” • Tom Rath, “Strength Finder 2.0” • Hans Rosling, “Factfulness” • Simon Sinek, “Start With Why?” • Simon Sinek, “The Infinite Game”

The thoughts of these writers are incredible and referenced throughout this book.

267 269 Appendix B: Golf Industry Research Reports

Author Year Title Link

Adam Lawrence 2019 The Future of Muni Golf.pdf http://www.jjkeegan.com/?ddownload=86355?LLM=*|HTML:EMAIL|*

ASGCA 2006 Master Planning a Golf Course.pdf http://www.jjkeegan.com/?ddownload=86356?LLM=*|HTML:EMAIL|*

ASGCA 2006 The Golf Course Remodeling Process.pdf http://www.jjkeegan.com/?ddownload=86357?LLM=*|HTML:EMAIL|*

ASGCA 2016 Forward Tee Study.pdf http://www.jjkeegan.com/?ddownload=86359?LLM=*|HTML:EMAIL|*

ASGCA 2016 Water Golf Study - Volume 1. pdf http://www.jjkeegan.com/?ddownload=86360?LLM=*|HTML:EMAIL|*

ASGCA 2018 Water Golf Study - Volume II.pdf http://www.jjkeegan.com/?ddownload=86361?LLM=*|HTML:EMAIL|*

ASGCA 2020 Profitable Golf Studies.pdf http://www.jjkeegan.com/?ddownload=86362?LLM=*|HTML:EMAIL|*

Canadian PGA 2018 Annual PGA Report http://www.jjkeegan.com/?ddownload=86364?LLM=*|HTML:EMAIL|*

CMAA 2019 Economic Impact Report Final.pdf http://www.jjkeegan.com/?ddownload=86363?LLM=*|HTML:EMAIL|*

Dekalb Park 2019 Park and Recreation Strategic Plan.pdf http://www.jjkeegan.com/?ddownload=86365?LLM=*|HTML:EMAIL|*

GCSAA 2018 Budget Survey Report.pdf http://www.jjkeegan.com/?ddownload=86366?LLM=*|HTML:EMAIL|*

GGCA 2019 Millennial Study GGA Nextgengolf.pdf http://www.jjkeegan.com/?ddownload=86367?LLM=*|HTML:EMAIL|*

269 Golf Course Industry 2020 January 2020 - Budget & Labor.pdf http://www.jjkeegan.com/?ddownload=86369?LLM=*|HTML:EMAIL|*

Marcus and Millichap 2020 Golf Newsletter.pdf http://www.jjkeegan.com/?ddownload=86393?LLM=*|HTML:EMAIL|*

Marcus and Millichap 2020 Corona Virus Implications.pdf http://www.jjkeegan.com/?ddownload=86394?LLM=*|HTML:EMAIL|*

McMahon Group 2020 Outlook 10 Pages of 163 Page Report http://www.jjkeegan.com/?ddownload=86368?LLM=*|HTML:EMAIL|*

NCA 2010 Club Trends and Economic Outlook.pdf http://www.jjkeegan.com/?ddownload=86370?LLM=*|HTML:EMAIL|*

NGCOA 2017 Golf USA Tee Time Coalition Report — Abbreviated http://www.jjkeegan.com/?ddownload=86371?LLM=*|HTML:EMAIL|*

NGCOA 2018 Tee Time Coalition Market Sentiment Study FINAL.pdf http://www.jjkeegan.com/?ddownload=86372?LLM=*|HTML:EMAIL|*

NGCOA 2020 Beware of Barter.pdf http://www.jjkeegan.com/?ddownload=86373?LLM=*|HTML:EMAIL|*

NGF 2012 Maximizing the Economic Benefits of Municipal Golf Courses.pdf http://www.jjkeegan.com/?ddownload=86374?LLM=*|HTML:EMAIL|*

NGF 2017 Demand Presentation.pdf Call NGF

NGF 2017 Supply Presentation Call NGF

NGF 2018 Future Of Off Course Participation.pptx Call NGF

NGF 2018 Golf Travel Report.pdf Call NGF

NGF 2018 Media Report on TV Watching.pdf Call NGF

NGF 2018 NRPA Presentation.pdf Call NGF

NGF 2018 State Of The Golf Industry.pdf Call NGF

NGF 2018 State Of The Golf Industry.pptx Call NGF

NGF 2018 Technology And Golfs Best Customer.pdf Call NGF

NGF 2019 Golf and the Millennial Generation.pdf Call NGF

270 271 NGF 2019 Golf Facilities in the US Summary.pdf Call NGF

NGF 2019 Golf Facilities in the US.pdf Call NGF

NGF 2019 Golf Industry Report 2019.pdf Call NGF

NGF 2019 Golf Participation Report.pdf Call NGF

NGF 2019 NRPA State of the Golf Industry Presentation.pdf Call NGF

NGF 2019 Rounds Played Summary.pdf Call NGF

NGF 2020 Rounds Played Summary.pdf Call NGF

PGA 2019 NRPA Presentation.pdf http://www.jjkeegan.com/?ddownload=86375?LLM=*|HTML:EMAIL|*

PGA 2019 Show Breakfast Presentation http://www.jjkeegan.com/?ddownload=86376?LLM=*|HTML:EMAIL|*

R&A 2015 Golf Around the World.pdf http://www.jjkeegan.com/?ddownload=86377?LLM=*|HTML:EMAIL|*

R&A 2017 Golf Around the World Report.pdf http://www.jjkeegan.com/?ddownload=86378?LLM=*|HTML:EMAIL|*

R&A 2019 Golf Around the World Report.pdf http://www.jjkeegan.com/?ddownload=86379?LLM=*|HTML:EMAIL|*

Sports & Leisure Group 2016 A New Context for Business Golf.pdf http://www.jjkeegan.com/?ddownload=86380?LLM=*|HTML:EMAIL|*

Sports & Leisure Group 2017 The State of Golf - Fact or Fiction http://www.jjkeegan.com/?ddownload=86381?LLM=*|HTML:EMAIL|*

Sports & Leisure Group 2018 By Design.pdf http://www.jjkeegan.com/?ddownload=86382?LLM=*|HTML:EMAIL|*

Sports & Leisure Group 2018 Golf Inc Summit - Three Macro Trends http://www.jjkeegan.com/?ddownload=86383?LLM=*|HTML:EMAIL|*

Sports & Leisure Group 2018 Golfer Omnibus Market Update.pdf http://www.jjkeegan.com/?ddownload=86384?LLM=*|HTML:EMAIL|*

Sports & Leisure Group 2018 Millenials Insights from the Market Everyone is Struggling to Capture http://www.jjkeegan.com/?ddownload=86385?LLM=*|HTML:EMAIL|*

271 Sports & Leisure Group 2018 New Paradigms for Golf Marketing.pdf http://www.jjkeegan.com/?ddownload=86386?LLM=*|HTML:EMAIL|*

Sports & Leisure Group 2019 How the Golf Market is Trending for the Year Ahead.pdf http://www.jjkeegan.com/?ddownload=86387?LLM=*|HTML:EMAIL|*

Sports & Leisure Group 2019 Optimizing Golfers Satistfaction Through Data Driven Insights.pdf http://www.jjkeegan.com/?ddownload=86395?LLM=*|HTML:EMAIL|*

Sports & Leisure Group 2020 Golf Barometer http://www.jjkeegan.com/?ddownload=86396?LLM=*|HTML:EMAIL|*

Tactician 2019 Detailed Demographic Report.pdf http://www.jjkeegan.com/?ddownload=86398?LLM=*|HTML:EMAIL|*

272 PB Index

A Step 8 — Setting the Tone: Warming Up 128–129 Abhinyana, Venerable 265 Step 9 — You’re Off and Running Aeration 94 130–132 Agronomy 22, 106 Step 10 — 18 Tees, 18 Fairways, 18 American Golf Corporation 157, 235 Greens: The Thrill Ride 132–134 Analysis 20, 60, 67–68, 166, 198 Step 11 — Do I Really Have to Go? 134–135 Architecture 22 Step 12 — Exit Stage Left? 135–136 Arcis Golf 235–237 Step 13 — Rub A Dub Dub – Time for ASGCA (American Society of Golf Course Some Grub 137–138 Architects) 79, 80, 87, 90, 92, 98 Step 14 — A Luxury Once Experienced Ashley-Montagu, Montague Francis 37 Becomes A Necessity 138–139 Assembly line of golf 22, 114, 116, 140, 141, 166 B Step 1 — Motivating the Golfer to Select Your Course 114–116 Baby Boomers 169–170 Step 2 — Making the Reservation Barter 156–165 Process Seamless 116–118 Benchmarks 25, 26, 30, 42, 68, 158, 200, Step 3 — Where Is It? How Do I Get 203, 244 There? 118–119 10-mile radius 26, 27, 28, 31, 55, 68, Step 4 — First Impressions Offset A 147, 247 Few Hiccups 119–121 Benchmarking Resources 205–207 Step 5 — The Ambience and Culture Club Benchmarking 23, 142, 206, 207, Resonate 121–124 209, 210 Step 6 — The Clubhouse: Once Inside Demographic indicators 26 124–126 Four principal expenses 96 Step 7 — Chariots of Fire 126–128 Lifetime customers 177 Number of golf courses 25, 70 Customer relationship management (CRM) Number of golfers 20, 25, 27, 39, 158, 176–178, 185, 213, 231 161, 241 Customer segmentation 178–179 The 15 Numbers that Matter 191–194 Customer Value Experience 145, 165 Berra, Yogi 33, 187 Brey, Dr. Eric 9, 171 D Bryant, Bear 93 Data Segmentation 176, 260 Buffett, Warren 239 Demand pricing 213–217 1) Technology: the golf industry C software is behind these other industries 213 Campus Press Yale 233 2) The average aptitude and Carnegie, Dale 166 attitude of golf course personnel Chinese Proverb 68 at public golf courses 214 Club Benchmarking 23, 142, 206, 207, Demographic indicators 26. See MOSAIC 209, 210 profile Club Benchmarking reports 210–211 Demographics Clubessential 229, 232 Baby Boomers 169–170 Club Leaders Forum Advisory Board 243 Females 12 Club Management Association of America Generation X 12, 169, 171 244 Generation Z/Boomlets/Centennials Club Prophet Systems 229 170 Conducting a survey 172 Millennials 169–173 Constant Contact 181 Minorities 12 Core values 50 Traditionalists 169–170 Coronavirus 233, 235 Who is the Customer? 34–36 Precautions 235–236 Women’s Golf Day 249 Customer experiences 76, 112–116, 120, Dethier, Dylan 90 136, 177 Directional signs 119 Customer relationship management “Distance Insights Project: Implications of 177 Hitting Distance in Golf” 89 Players’ needs, wants and desires 167 Doerr, John 48 Top five enjoyment factors 171 Dolan, Father Patrick 265 Customer loyalty programs 183

274 275 Duhigg, Charles 168 Golf Golf’s competition 37 E Number of golfers 20, 25, 27, 39, 158, Einstein, Albert 110 161, 241 Email marketing services 181 Participation rate 39, 171 Enoka, Gilbert 220 Playable days 63–67 Equipment 13, 22, 34, 51, 78, 89, 90, 96, “Standard” golf course 37 99–101, 109–110, 250–253, 262 Types of golf courses 224–225 EZLinks 160, 229, 230, 232 Golf18 Network 229 Golf Advisor 81, 176 F Golf Course Builders Association of Fertilizers 104 America 99 Fertitta, Tilman 167 Golf Course Industry magazine 96, 97 Finch, Peter 183 Golf course loyalty programs 183–185 First Tee National School Program 241, Golf Datatech 23, 207, 208, 209 249 GolfLogix 176 Food and beverage facilities 211–213 Golf Magazine 78, 81, 83, 90, 128, 225 foreUP 229, 230, 232 Golf management software system 221 Formula 19, 23, 45, 52, 53, 95, 114, 139, GolfNow 150, 158, 160, 164, 176, 226, 141, 144, 151, 152, 249 229–232 Foundational formula 19 GolfNow Marketplace 229 Fringe benefits 4, 188, 190, 246, 249 Golf Pipeline/GolfBook 229 Golf USA Tee Time Coalition 163, 228, 229 G Grass. See also Turfgrass GCSAA (Golf Course Superintendents Bentgrass 101, 102 Association of America) 98, 99, Predominant grasses 103 100, 108, 109 Tall fescue 102 Generation X 12, 169, 171 Transition zone 97, 102 Generation Z/Boomlets/Centennials 170 Typical grass types 101 Girls Golf 241 GreatLIFE Golf & Fitness 154, 253, 254 Goethe 52 Green Bay Packers 114–115 Golden Circle of Communication™ 43 Green fees 142–165

275 Barter 156–165 Key performance reports 194–202 Customer Value Experience 145 Report 1: Customer Distribution 195 Cycle of decline 142 Report 2: Customer Demographics Green fee pricing tool 164 196 Lowballing the value 173 Report 3: Customer Retention 196 Proper green fee 144–145 Report 4: Customer Spending by Class 197 Raising prices vs. discounting 143 Report 5: Customer Spending by Senior rates 149–150 Individual 197 Software services 161–162 Report 6: Zip Code Analysis 198 H Report 7: Merchandise Sales by Vendor 198 Hanse, Gil 90 Report 8: Reservations by Booking Hellman, Doug 257 Method 198–199 Herbicides 104 Report 9: Reservations by Day of Week 199 Heuristic 20, 24, 193 Report 10: Revenue Benchmarks 199 Hoffer, Eric 111 Report 11: Revenue per Available Tee Holtzman, Michael 211 Time 199 Horrell, Thomas 257 Report 12: Revenue by Department HubSpot 225–226 200–201 Report 13: Rounds per Revenue I Margin 201–203 Italian Proverb 221 Report 14: Course Utilization 203–205 Key questions 21, 22, 23, 260 J KPIs (Key Performance Indicators) 191, 210 Jonas 229, 231, 232

K L Labyrinth at Bandon Dunes 113–114 Kahneman, Daniel 238 Lang, Eric Anders 114 Karen, Jay 164 Leading national data services 208–209 Keiser, Mike 113 LeadLander 225–227 Kerr, James 47, 48, 141 Lifetime customers 177

276 277 Links magazine 242 Moosend 233 “Links Restoration and Maintenance MOSAIC profile 20, 21, 28, 29, 30, 67, 68, Policy” 51–52 92, 147, 148, 247 Location Munger, Charlie 186, 239 Golf course’s potential 27, 30 Municipal golf courses 8, 9, 14, 17, 26, 27, LPGA Tour 34 37, 38, 40, 45–46, 49, 52, 54, 55, 58, 68, 112, 124, 142, 145, 147, M 152, 155, 172, 173, 188–189, 195, 197, 201, 205, 220, 231– Madison, James 18 234, 243, 246–248, 256 Mailchimp 181–182 N Maintenance Average operating expenses 108 National Golf Course Owners Association (NGCOA) 2, 16, 158, 207, 235, Equipment 100 246 Expenses 96 National Golf Foundation 2, 5, 6, 8, 23, 25, Golf course annual maintenance cost 60, 70, 71, 161, 207, 241, 249 93–94 Novak, Dr. Jill 169 Labor expenses 97, 241 NPK (Nitrogen, phosphorus, and Traffic on the course 107 potassium) 104, 107 Turf health 105 Water budget 98 O

Managing the business 187–191 OKR model 48 Market Sentiment Study 228 Operational 45 Maslow, Abraham 40 Operations 22, 139, 171 Maslow’s Hierarchy of Needs 40 OTTAs (Online Tee Time Agencies) 160, McKee, Mike 113–114 229 McMahon Group 52, 94, 245 P McMahon Pulse Survey – Outlook 2020 245 Pace of play 4, 36, 76, 86, 87, 88, 95, 128, Millennials 169, 171, 173 146, 171–173, 258 Mission statements 43, 49, 50, 52, 158, Pandemic 6, 233, 235 163 Peppers, Don 177 Moore, Geoffrey 39 Pericles 239

277 Pesticides 104 Reservation process 116–118 Pew Research 233 Restoration 51, 52, 90, 91 PGA Junior League 6, 241, 249 Retail Dive 233 PGA of America 10, 11, 85, 86, 126, 158, Revenue 163, 205 Annual revenue potential 24 PGA PerformanceTrak 41, 142, 205 Roberts, Kevin 47 PGA Tour 34, 74, 157, 158, 229, 253 Rogers, Ph.D., Martha 177 Picket Fence 178 Platinum Clubs of America 243 S

Platinum Clubs of the World 243 Sagacity Golf 216 Polish Proverb 140 Saint-Exupéry, Antoine de 32 Predictive Index™ 31 Schoonover, Dr. Kris 171 Private clubs 20, 25, 26, 30, 37, 38, 40, 52, Season passes 151–156 55, 58, 62, 74, 109, 142, 188, Self-evaluation checklist 140 193, 205, 209, 212, 243–246, 264 Seneca 53, 55 Professional Golf Enterprise Management Silverman, Harvey 160 Program 171 Sinek, Simon 42, 43 Profitable Food Facilities 211–212 Slope rating 20, 26, 29–32, 41, 54, 58, 67, 68, 76–78, 80, 84, 92, 145, 247 Q Social media 23, 38, 114, 173, 175, 176, 177, 185, 196, 198, 227, 242, Quick 18 229 259, 260, 262 R Facebook 227 Instagram 227 R&A (Royal and Ancient Golf Club 34, 70, LeadLander 227 89, 90, 106, 205, 207 Social media influencers 242 Remodel 90 Twitter 227 1) Economic problems 91 YouTube 227 2) Maintenance problems 91 Zendesk 227 3) Design problem 91 Social media influencers 114 4) Aesthetic problem 91 Staples, Andy 98 Renovation 22, 84, 90, 91, 245, 246 Statista 233 Rental clubs 250, 251, 252, 253

278 279 Strategic plan/strategic vision 19, 20, 23, Golf simulators 263 42, 48, 52, 53, 69, 72, 109 GPS 41, 128, 171, 225, 254, 262 Core values 50 Mobile technology 260 Defining Your Vision 40–41 Pacesetter Technology 257–258 Seven-step formula Requirements are daunting 231–232 1. Geographic Local Market Toptracer 255, 256 Analysis 20–21 TED Talk 43 2. Weather 21 TeeOff 150, 157, 160, 176, 229 3. Architecture and Agronomy 22 Tee-On 229 4. Operations 22 Tee time distributors 158, 229 5. Customers: Learning Their Clubessential 229 Preferences 22 Club Prophet Systems 229 6. Key Metrics, Yield Management, Financial Modeling and Course EZLinks 229 Valuation 23 foreUP 229 7. Technology—The Foundation Golf18 Network 229 23 GolfNow Marketplace 229 Strategic Plan 44–45 Golf Pipeline/GolfBook 229 Supreme Golf 150, 157, 176, 232 Jonas 229 Surveys 12, 22, 35, 36, 52, 63, 67, 68, Quick 18 229 71, 87, 97, 136, 151, 166, 170, 172–174, 186, 206, 222, 228– TeeOff 229 229, 233, 245 Tee-On 229 McMahon Pulse Survey – Outlook Tee time vendors 159–160 2020 245 Templates 24, 67, 139, 165, 166, 220, 221, 238 T The 15 Numbers that Matter 191–194 Tactical 23, 45 “The Infinite Game” 42 Technology 2, 15, 23, 38, 59, 90, 116, 128, “The One to One Future” 177 161, 163, 213, 214, 221, 222, “The Power of Habit” 168 225, 230–234, 237–238, 256– 258, 260, 263, 264 Topgolf 7, 84, 141, 241 Chronogolf 238 Touchpoints 41, 112, 140, 166, 171, 261, 264 Gallus Golf 259 Traditionalists 169–170

279 True Spec 235 W Turfgrass Wagner, J.J. 244 Maintained turfgrass 100 Weather 21 Tzu, Lao 1 Forecasting technology 59 U Leveraging weather 66–67 Uncontrollable factors 53–68 Uncontrollable factors 53–68 Weather Trends 21, 59, 60, 62, 67, 152 United States Golf Association (USGA) 34, 89, 106 Website tools 227 Innovative Symposium 171 SumoMe.com 227–228 USGA/R&A’s Distance Insights Project Welcome2Golf 241, 249 90 Y V YouTube 48, 114, 124, 227, 260 VerticalResponse 181 Vision statement 48–49 Z Caribou Coffee vision 19 Zendesk 227 Vogt, Michael 94

280 PB