Jerry Kilby says a business model built entirely on tourist golfers is difficult to sustain.
In the last 15-20 years, hundreds of golf courses have been built around Europe and the Middle East. Many of these are struggling for rounds, and their revenue is a fraction of that predicted at the outset.
Many business plans wrongly assumed that their beautiful, championship, signature-designed, 7,000-plus yard monster of a course would have golfers beating a path to their door.
In the 1990s and the early part of the last decade, there was much golf development in the traditionally popular golf tourism regions like the Costa del Sol and Algarve as well as new destinations like Turkey, aimed at attracting travelling British and Irish golfers. But the number of British players remained broadly the same, or even dropped. So now, more destinations and courses are chasing a reducing number of travelling golfers. Then, in 2008, the financial crisis affected golf travel arguably more than any other sector in the travel industry. In these circumstances, what can you do to get golfers to play at your course? The majority of successful clubs have a common business model: they enjoy a revenue mix with a balance between local members and casual visitor players.
The few golf courses that survive happily on green fee revenue alone (the pay-and-play business model) are located in or very close to high-density urban areas, where the local population can access the course quickly and cheaply. There are few exceptions to this rule (Kingsbarns in Scotland is perhaps one). Many of these courses also have local clubs playing on them, and offer season tickets, which can be purchased in advance for a year, like annual membership in many ways. It takes time for a golfer to get to and from the course. A recent analysis of golfers in the Netherlands shows that 70 per cent do not travel further than 40km to play.
Golf courses in tourist destinations must find a way to engage with and attract local residents (whether expats or locals). Lesson programmes for non-golfers can help. Get your professional to design group tuition programmes for adult ladies, young men and pensioners – all age groups are happier when they are in a group learning with their peers.
Have a flexible membership scheme so that local people can join your club for a modest sum, paying more as they use the facility more, and don’t forget: it’s not just about golf. Club membership is about socialising with friends and family, meeting people with similar views and passions. Your golf club should be where you make new friends but perhaps most importantly, where you go with your guests and are made to feel welcomed and valued.
Organise social evenings in the clubhouse like Friday night family dinners; wine tastings; member and guest evenings. Casual dress and family-friendly events are the key elements for a successful social event.
Attracting more casual golfers and golf tourists is very expensive, as a golf resort should advertise and promote itself in all of its target markets. Scandinavia, Germany and Netherlands are full of potential golfers for many resorts, but to advertise in all the golf magazines in all these countries would need a large marketing budget.
Perhaps golf resorts should think more about international memberships for their once-a-year customers. An e-newsletter and some other benefits would be of great interest to those golfers who enjoy coming to play your course. Another idea is to collaborate with other nearby golf courses and pool your international marketing budget, promoting your area as a golfing destination. Golfers rarely travel to play just one golf course, so this makes a great deal of sense and has been very successful in the development of such destinations as Myrtle Beach and the Gold Coast in Australia.
Of course, a key element of the balancing act between members and visitors is ensuring that you allow both sets of customers to enjoy the golf facility without adversely affecting each other.
To do this, you need a good club manager, a decent tee-time and a golf management software system that allows you to have time segments for different customer groups. Green fee visitors and golf tourists will be unlikely to want to play at eight in the morning, but this is exactly when your members will want to play.
The club manager needs to communicate to the members the benefit of the visitors being there and vice versa. Effective communication is absolutely vital in a semi-private club, and the club’s website and members’ newsletters are the most important tools in this process.
Whether you end up with your members generating 40 per cent of your revenue and your visitors 60 per cent, or perhaps your members making only a 25 per cent contribution and your visitors the balance, each club needs to find the right balance for its individual and local circumstances. The fact remains that perhaps 95 per cent of golf facilities in Europe and the Middle East are ‘semi-private’ clubs, where club membership is a key element of their revenue, but where visitors are welcomed.
Golf consultant Jerry Kilby is a former general manager of Nad Al Sheba Club in Dubai, and is CEO of the Club Managers Association of Europe.
This article was initially featured in the April 2010 issue of Golf Course Architecture.