Golf Club Performance, Ireland

How would you set a range of green fee rates that reflects fair value membership at your golf club?

This question is part of conversations that golf members talk about up and down the country. Truly, a large body of research on this particular subject would be of great value to this industry. However, to the best of knowledge, this research has not been undertaken and may I offer a suggestion to a golf club’s modus operands? For the purpose of this article, using a made up golf course called Lake Golf Club and Lake GC is owned by the club members.

Lake Golf Club

Like so many Irish golf courses the sources of revenue are green’s fees, membership subscriptions and what little profit is made from a bar and small menu and food service.

Part of the current management operational plan is to drop the entrance fee to lure new members and increase revenues. Subsequently, the club also offers 2 rounds for the price of 1round of golf and an open competition once a week.

The golf course is known in the locality to be a good test of golf and the course is kept in good condition. Not unlike a lot of golf courses in recent times, this course experienced a steady decline in revenues. The club believed that they also had to compete for the society golfer at discounted green fee rates to compete with other local clubs. In doing so, Lake GC’s green fee rates crumbled and the club membership are completely dissatisfied with the club offering cheaper greens fee rates. Which in turn during the clubs recent AGM, a group of member’s raises a range of concerns about the benefits and value of their golf membership.

Club Operations: 

Lake Golf Club operates to break even and if they make a profit that amount is parked into the rainy day fund. The club currently costs €750,000 a year to operate in full. Within that amount is simply the cost of operating the golf course, small clubhouse, administration, bar and restaurant staff.  

• 600 members paying €900.00 a year membership revenue                 €540,000
• All types of Green fees generated revenue                                        €105,000
• Bar & catering generates revenue                                                     €85,000

Therefore currently Lake golf club is losing 20k. Taking this scenario into consideration, may I make a few points about Lake Golf Club?

The current subscription is €900.00 per member per year. Therefore, if a golf member at Lake GC plays golf once a week for 52 weeks and that amount of golf translates into a membership fee of €17.31 per week.

The value added to a golf membership can be identified by the varied green fee prices. May I suggest that a guest of a member pays 50% more than what the weekly member pays per round? Also, is it not unreasonable to say that a visitor should pay twice as much if not more than what a member pays weekly? Therefore, Lake GC should set its guest fees at €25.97 or €25.00. A full visitor fee rate could be charged at double that rate to a full green fee rate of €50.00.

The "What If"

What if the club did not offer discounted green fees or other such incentives to play? Offering golf customers “No discounts” may result losing custom from the price conscious golfer. The resulting benefit to the members is that the golf course is more likely to be in better condition from less play. However, the Lake Golf Club needs to generate a source of revenue to keep yearly subscription as low as possible for the club members. 

Let’s assume that Lake Golf Club management is now asking members to support their golf club by inviting seven paid guests to play in a calendar year. If the 600 members invited 7 guests at the rate of €25.00 will return €105k. Therefore, the club member and his/her guests may well become one of the main sources of revenue. Now the club can avoid competing with other golf clubs in the race to the revenue bottom competing for golfers at discounted golf rates, open days, charity days, society days & etc. Additionally, Should Lake Golf Club set a cap of 500 or 750 rounds at the premium rate at €50.00 per player. That amount of rounds returns an extra €25,000 to €37,500. 

Lake Golf Club can forgo spending valuable time developing sales leads for premium tee time sales. The club can now focus on enhancing the membership services for their golf members and guests. A happy club attracts new members to join with a loss less effort compared to a club full of moaning members. Sounds simple, however, a golf club should be able to measures the value of a golf club’s membership to it’s members. 

Final Thoughts: 

There are other ways to add revenue to a golf clubs bottom line and finding more revenue is not an easy task. However, my point is, the value of the greens fees should reflect a cost pattern to the yearly golf membership.

John Dooley PGA 

Golf Professional