Golf-Based Resorts: Managing the Operation Copyright © 2012 John Wiley & Sons, Inc. Photograph Courtesy of SuperStock
Golf-Based Resorts:Managing the Operation
Copyright © 2012 John Wiley & Sons, Inc.Photograph Courtesy of SuperStock
Learning ObjectivesIdentify the changing trends in and
demographic profiles of the golf market.Identify the critical variables in determining
a golf-based resort's profit potential.Identify potential solutions to financial
problems faced by golf-based resorts.
Copyright © 2012 John Wiley & Sons, Inc.
Market TrendsInternational golf market: 57 million peopleJust under half are in the U.S., about a
quarter in JapanSlightly more than 10 percent are in Canada
with just under 10 percent in EuropeAvid golfers account for less than one quarter
of all golfers but account for 63 percent of all golf-related spending.
Copyright © 2012 John Wiley & Sons, Inc.
Market TrendsU.S. golfers spend over $26 billion a year on
golf travel, three quarters of which goes to the accommodation, transportation, and food and beverage sectors.
Florida, South Carolina, North Carolina, California and Arizona are the most popular travel destinations for golfers.
Number of core golfers has been declining Major challenge is to turn occasional golfers
into core golfers.
Copyright © 2012 John Wiley & Sons, Inc.
Changing Trends (cont.)Industry Trends (cont.)Water management is the major
environmental issue facing the industryMany courses are utilizing water conservative
technology
Changing DemographicsThere are seven segments of golfers: core,
seniors, women, juniors, highly skilled players, private club members, and high spending golfing households
Copyright © 2012 John Wiley & Sons, Inc.
Identify the critical variables in determining a golf-based resort’s profit potential.
OperationsThe Sun Belt covers the southern states and
part of the coastal regionThese courses are likely to be open year-
roundThe Frost Belt consists of northern states
and the mountainous parts of southern statesThese courses usually shut down for a while
during winterCopyright © 2012 John Wiley & Sons, Inc.
Profit Potential (cont.)RevenuesMost revenue comes from annual fees and
green feesThe second most important source of
revenue is from golf cart rentalsExpensesThe greatest expense is the cost of
merchandise sold, followed by the cost of food and beverages
Payroll is usually the largest expense category
Copyright © 2012 John Wiley & Sons, Inc.
Identify potential solutions to financial problems faced by golf-based resorts.
Tournaments and EventsBusiness Golf
Customer Appreciation EventsSales/Product LaunchesEmployee OutingsFund-Raising events
Copyright © 2012 John Wiley & Sons, Inc.
Solutions to Financial Problems (cont.)Hole in One Contest
Companies organize the activity for the resort and provide the prizes
While many think it is virtually impossible to achieve a hole in one, in any given year in the U.S., there are over 40,000 holes in one
Copyright © 2012 John Wiley & Sons, Inc.
Solutions to Financial Problems (cont.)Women-Friendly
Women friendly courses can:Vary tee locations to allow the option of
playing a harder or easier courseFeature holes in the 5,600 to 5,700 yard
rangeProvide holes where players do not have to
carry the ball over a lot of obstaclesWhere greens can be easily reachedWhere forward tees are closer to the hole and
allow for a better angle at the greenCopyright © 2012 John Wiley & Sons, Inc.
Solutions to Financial Problems (cont.)Banquets
Can be an excellent way to bring in additional revenue
Golf tournaments are a good market to advertise to
Pre-game lunches, box lunches, post game dinners, or cocktail parties have proven successful
Social events are the most financially profitable segments, including weddings, bar mitzvahs and anniversaries
Copyright © 2012 John Wiley & Sons, Inc.
Solutions to Financial Problems (cont.)Pro ShopsMargin Enhancers include discounts,
rebates, fitting fees, advertising co-ops, freight programs, or free product accounts
AccessoriesThe key to increasing sales is in the
presentation of itemsKeep displays neat, use color effectively,
develop a theme, cross merchandise, and avoid one level displays
Copyright © 2012 John Wiley & Sons, Inc.
Solutions to Financial Problems (cont.)Inventory Control
Controlling inventory can cut down costs“Open-to-buy” refers to the amount of retail
dollars set aside for the purchase of merchandise in the future
Old sales figures are used to project future sales
Merchandise group departments are created
Copyright © 2012 John Wiley & Sons, Inc.
Solutions to Financial Problems (cont.)Inventory Control (cont.)
To maintain control of the system the two important pieces used to determine beginning inventory levels are projected sales volume and the turnover rate desired by the shop
Credit CardsAccepting credit cards makes the purchase
easier for the customerRetailers pay a fee to credit card companies
when they accept credit cards
Copyright © 2012 John Wiley & Sons, Inc.