Is Golf Now Melting? (The Tee Sheet Wars Part Deux)

A few weeks ago I posted the results of my study of recent activity in the tee sheet software market in the Minneapolis-St. Paul area.  In that report we noted that industry leader GolfNow was bleeding market share to Club Prophet, ForeUP and Teesnap.

That result made me curious whether this trend was being played out in other markets as well, so I launched a comprehensive study of market share changes in the US tee sheet market.

The results were somewhat shocking, even to a wizened old veteran like me.

In the rest of this post I’ll provide some of the facts that our team has gathered and I’ll also give you my not so humble opinion on what the trends indicate are most likely to happen in the future.

Let me preface all of this by saying that I have a tremendous amount of respect for any company that is offering a competitive golf course tee sheet product to course operators.  Building, operating and selling high quality software is a difficult job and any vendor that establishes a solid presence in the market has had to do many things well.  I tip my cap to all of the vendors mentioned below, even those who have not fared as well in the market recently as their competitors.

You probably know that GolfNow entered the tee sheet market about four years ago with the purchase of Fore! Reservations.  They followed that up with several more acquisitions (Active Golf, Crescent, BRS in the UK).  Those acquisitions gave GolfNow the #1 market share in the US by quite a margin and its biggest US rival EZLinks subsequently launched an acquisition spree of its own (GolfSwitch, IBS, CourseTrends).

Our study focused on the Internet booking software used by public golf course operators behind their “Book a Tee Time” buttons on their branded websites (we consider a golf course to be “public” if the course is generally open for daily fee play)  We had market share data from late 2015/early 2016 and we’re now in the process of refreshing that data during the summer months of 2017… meaning that we’re recording changes that have occurred in about an 18 month period.

So far, we’ve completed the analysis of 13 states that contain over 4,600 public golf courses… 38% of the US total.  States included were Arizona, California, Colorado, Massachusetts, Minnesota, Nevada, Ohio, Pennsylvania, Texas, Utah, Virginia, Washington and Wisconsin.  We’re planning to gather the same data for all other states by the end of September.

Some pertinent facts from our work to date include:

18.8% of all courses studied (884 of 4,655) converted to a new system for Internet tee times in the past 18 months.

Market share leader GolfNow lost 28% (353) of the customers it had 18 months ago; it also picked up the most new customers (102), but it still wound up with a net of 20% fewer Internet booking customers, (a net loss of 251 customers).  GolfNow’s customer count declined by at least 10% in every state we studied.  GolfNow still holds the largest market share by a wide margin, but the gap declined significantly in the past 18 months.

EZLinks added the most new customers (181) but also lost 142 customers for a net gain of 39.

The three fastest growing tee sheet/Internet booking software providers in the 13 states analyzed so far were ForeUP (91 net new), Club Prophet (75) and Teesnap (69).  Club Prophet has been in the market for a long time while ForeUP and Teesnap are new entrants within the past five years.

42% of public golf courses in these 13 states still don’t offer tee time booking on their websites.

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There are lots of other details, but it’s time to go into full Golf Gadfly mode by spouting some opinions.

As I will always remind you these are just my opinions and I could be wrong, but in a previous life I spent 15 years as an IT consultant advising large companies on selecting, installing and operating software solutions and I spent another 15 years as founder/CEO of a software company that provided reservation booking, check in and accounting software services to airlines in 30+ countries.  I’ve lived in and around software-based businesses for a very long time and as is true in most things… the more things change, the more they stay the same.

 

Why is GolfNow melting?

New, aggressive competitors like ForeUP and Teesnap along with established competitors like Club Prophet and EZLinks are applying major heat.  Markets are a wonderful thing.  When a company has a dominant position in a market, it usually spurs some competitors to raise their own games to a new level.  That has definitely happened in this case.

Many of GolfNow’s “acquired” customers never wanted to be GolfNow customers in the first place and are moving on now that their contracts are expiring and there are proven alternatives with reasonable price tags.

GolfNow is offering a complicated mix of products to customers who want simplicity… they haven’t rationalized all of the products they have purchased into an easily understandable set of offerings.  Their competitors have much crisper, clearer offerings.

GolfNow has created tremendous ill will among a significant % of its potential customer base with a combination of inflexible contract terms and sharp elbowed negotiating tactics.  The infamous video showing some of its salespeople doing the “trade rap” was the final straw for many operators I have surveyed.

And here’s a gadfly-like thought… Does GolfNow even want to be in the tee sheet business?

This might seem like a crazy question to ask about a market share leader, but let’s remember how we got here.

GolfNow got in the tee sheet business by acquisition and the primary reason that many speculate they got into it was to feed more trade volume into the GolfNow.com consumer site.

Now that they’ve been at this awhile, I seriously wonder whether they really have the desire to be in the tee sheet business; managing that business is vastly different than managing a consumer tee time booking service.

What’s the worst thing that can happen if a customer can’t book a tee time on GolfNow.com on a course where they want to play?  They go to the course website or call the course and book the tee time.  No one is upset… life goes on.

What’s the worst thing that can happen if a golf course tee sheet is down for a few hours?  The golf course operation is in chaos mode and the software salesperson and customer support staff are getting an earful from the operator as they frantically try to debug the problem and get the customer back online.  No one is happy… and the wounds linger.

Running any transaction processing system that a business depends on for its core operations is a hair-raising experience that requires tremendous attention to detail and a maniacal devotion to customer service… with the customer being the golf course operator in this case.

It isn’t at all clear to me that GolfNow has the right stuff in its DNA to manage the tee sheet business.  It is a sales-driven culture, not a technology-driven culture.  Many of the people who operated the acquired businesses have moved on.  Managing the nuts and bolts of the tee sheet/POS business probably isn’t a lot of fun for the GolfNow crowd and it would not shock me at all to see them remove this thorn from their paw.

 

How is GolfNow’s loss of tee sheet/Internet booking market share affecting its GolfNow.com consumer business?

I don’t know precisely… but it can’t be helping.

Every time a golf course operator leaves the fold, it reduces the inventory of tee times that GolfNow can sell as trade… and that reduces its ability to offer “hot deals”… and that reduces the value to the consumers who have been trained to crave hot deals… and it also reduces the number of courses offered on its site… and that reduces the convenience level for the golfer… and it all combines into a downward spiral.

 

Will the current trends in market share shift continue?

Barring a disruptive event, I believe the current trends will continue and most likely will accelerate.

Possible disruptive events could include:

A major acquisition/merger… GolfNow or EZLinks could continue their acquisition sprees… GolfNow and EZLinks could merge… GolfNow could divest of its tee sheet business to one of its current competitors or to a new player… etc.  No one ever imagined that GolfNow would acquire Fore! until it happened… the moral of the story is you never know what might happen tomorrow.

GolfNow management could get religion and make a renewed commitment to the tee sheet business… but don’t hold your breath… this would require a huge cultural metamorphosis.

Lots of other things could happen… we live in interesting times and even The Golf Gadfly can’t always stay one step ahead of new developments.  What things can you think of that could impact this market?

 

What does this market shift mean for golf course operators?

This is great news for operators.  Many operators were worried a few years ago that GolfNow was going to become a monopoly, leaving them with little choice but to do business with a vendor offering a value proposition that they weren’t comfortable with.  These results make it clear that course operators have several viable choices when choosing their tee sheet/POS/booking software systems.  ForeUP and Teesnap have made it through the teething process with their products and are both based on the latest cloud-based technology.  Club Prophet has broad and deep functionality and has been a proven provider for many years.  There are others that have succeeded in either regional or functional niches and may emerge as larger players… Quick18, Chronogolf and tee-on are the ones with the most current market share but there are others.  As a golf course operator, you have no shortage of high quality options.

 

Which tee sheet/POS/Internet booking system is currently the best?

That’s a trick question… the answer is “it depends” on your requirements.  Each system has different strengths and weaknesses and the ‘best’ for your needs depends on your requirements and priorities.  Do you need a fine dining food and beverage operation integrated with your tee sheet or do you run a basic snack shop or is your food and beverage operated by an outside agent with their own systems?  Do you have a highly reliable Internet connection at your golf course, making cloud-based services viable?  Do you need a sophisticated member management system that offers private club-like features or do you only offer basic patron card “memberships”?  Do you run lots of events?  Do you want to be able to connect your tee sheet to multiple marketing channels/3rd party distributors?  Do you want to buy everything from one vendor including website content management and email/text marketing or do you want to buy best of breed capabilities from multiple vendors?  Answers to those questions and many more determine the solution that is the best fit for your needs.

 

If GolfNow falls, will EZLinks be the new market leader?

Maybe… but for me EZLinks is a bit of “a riddle wrapped in a mystery inside an enigma” (thanks, Winston Churchill).

They have been steadily gaining market share, but not at the same pace as the upstarts.  They actually picked up more new customers (181) over the last 18 months than any other vendor, but they also lost 142 customers so their net gain of 39 put them in 5th place behind ForeUP, Club Prophet, Teesnap and Quick18.

They have a customer base that has the highest greens fee average of any competitor.  They have large relationships with major management companies such as Troon and OB Sports, and those relationships represent both a blessing and a potential curse.  If those companies grow, EZLinks has a steady source of new customers but if any of those relationships sours (as it did with Billy Casper a few years ago), then they stand to lose a large number of customers in one fell swoop.

They are absorbing two recent acquisitions (IBS and CourseTrends) and still have not fully digested their GolfSwitch acquisition from a few years ago.

Their acquisition strategy has sorta made sense, but some aspects of it are a little hard to decipher.  The IBS customer base is a good fit with EZLinks traditional more upscale courses.  The CourseTrends acquisition was more of a puzzler.  EZLinks filled in a gap in their product suite by acquiring the market share leader in golf course website content management software, but the CourseTrends customer base of mid-tier and lower-tier courses did not seem compatible with EZLinks existing customer base.

EZLinks is exhibiting some of the same tendencies that have gotten GolfNow in trouble, with a senior management team that is seemingly focused more intently on selling tee times at TeeOff.com than they are on servicing its tee sheet customers.  The horrific multi-day outage that took course tee sheets down last month was perhaps a wake-up call to this team that the core business needs a bit more focus.

The EZLinks plot line could end lots of different ways and I’ll stop short of predicting which scenario is most likely.

 

Why do so many courses (42% in our 13 states sampled so far and closer to 50% nationwide) not offer online tee time booking in this age of the Internet?  Do these courses represent a significant growth opportunity for the software suppliers?

There is a significant growth opportunity for the market, but it’s tempered by the fact that many of the courses considered here actually do already buy tee sheet/POS software… they just don’t turn on the services that enable consumers to book tee times on the Internet.

Many pitch and putt, par 3 and exec courses operate on a first come, first served basis… they simply don’t schedule tee times.

If we focus just on regulation length courses, the percentage that don’t offer Internet bookings drops to about 1/3 but that still seems like an insanely high number in 2017.

High end destination and/or resort courses (Pebble Beach, Whistling Straits, Bandon Dunes, …) don’t offer Internet tee times for some logical reasons.  Most resorts don’t want you to just book a tee time, they want you to book a stay… and they’ll schedule your golf as they interact with you as a guest.    At destination courses, a high percentage of people who are scheduling visits are scheduling groups of more than 4 and thus require multiple tee times… a trick that most systems can’t easily accommodate.  Many high end courses also require payment up front or have some other pre-play routine that they need to run you through as part of the reservations process.  I guess if they’re collecting $250+ per golfer, they figure they can afford to spend a few minutes on the phone with you to close the deal.

On the other hand, it is a bit harder to fathom why a garden variety 18 hole regulation golf course with scheduled tee times wouldn’t offer their customers the convenience of booking Internet tee times.

One operator that I surveyed told me that he didn’t want his customers to know how many open tee times he had because he figured they would come in and haggle on the price if they knew how many unused tee times there were on a particular day.  Really?  And you don’t think these same people wouldn’t notice when they arrive at the course with their phone-booked tee time that there are only 5 cars in the parking lot and try the same shakedown?

Another operator told me that due to the many events they hosted that “our schedule is really complicated so we don’t offer Internet tee times”.  Really?  That’s what computers are for… to allow you to manage complexity without a lot of manual effort.

Another reason offered is “we like to talk to our customers”.  Really?  Is that why your conversation with the customer in front of you who has shown up and wants to pay for their round needs to be constantly interrupted to answer the phone for people asking “do you have anything available today around 10 o’clock”?  And what about your customers who decide at 10pm that they’ve got time to play tomorrow… do you man a call center to talk to them at that hour or is their only option to go check out your competitor down the street who offers Internet booking?

In this age of the Internet, I expect to see the number of courses who offer Internet tee time booking to continue to rise in the coming years.

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I could go on with other questions… but I’ve taken up enough of your time for today.

If you’ve made it this far, congratulations… you’re outlasted most of my readers.

In my opinion, the US golf course tee sheet market has room for 3-5 healthy competitors… the dance floor is a bit crowded at the moment so there will likely be some fallout or consolidation in the coming years.  It’ll be very interesting to see how this story evolves.

If you have an interest in gaining access to any of the detailed data from my survey, give me a shout at [email protected].  Depending on what you want, there may be a price tag involved but it doesn’t cost anything to start a conversation.