What if every golfer joined the Public Country Club?

Want to play unlimited golf at 70+ courses for only $55/month?

 

This is the brilliantly simple pitch offered by TwinCitiesGolf.com’s Public Country Club (PCC).

What golfer wouldn’t be intrigued?  Membership has grown from 0 to 3,000 in 3 years.

But at first blush, what golf course owner/operator wouldn’t be terrified?  $55/month… for someone who might play every day?

One area golf course bigwig recently told me:  “If every golfer joined the PCC, it would kill the golf industry.  You can’t sustain a golf course for $55/month.”

On the other hand, a growing number of golf course operators have decided to participate… 12 in 2016, 55 in 2017, now over 80 at the end of the 2018 season.

 

I’m addicted to complicated and controversial issues, so I dug in to answer the question:

What would happen if every golfer joined the Public Country Club?

I spent some time with TwinCitiesGolf.com entrepreneur Kevin Unterreiner and his lieutenant Mike Hau and teased out some important facts, figures and insights about the current state of the PCC.  I have also been gathering feedback from the field during this year’s visits to dozens of course operators and topped off the research effort with some Einsteinian spreadsheet calculations that dimmed the lights a few times.

In case you are wondering, I have no financial stake in the Public Country Club… no “rooting interest” other than my preference for ideas and initiatives that help golfers play more golf and help golf course operators make more money.  Many PCC members use GroupLooper as a planning tool for their golf, but they enjoy no special privileges that aren’t available to any other golfer or golf game organizer.  I did join the PCC in 2016 (member #0009) to see how it looked from the inside, but I am no longer a member as it wasn’t a perfect fit for me.

 

We won’t make you wait for the punch line… here it is

If every avid Twin Cities golfer joined the PCC, the average course operator would generate golf-related revenues (greens fees and cart fees) of approximately $1.4M per year.

That doesn’t include food and beverage, golf shop merchandise, driving range or other ‘event’ revenues (e.g., weddings); it is just the pure golf revenue associated with greens fees and cart fees.  I’ll provide the detailed support for that number in a bit… for now, let’s just keep the focus on the big picture.

I asked several local golf course operators what their current annual golf revenues were… the numbers ranged from $800k to $1.2M for the operators I talked to… all were courses with peak weekend rack rates of $50-$65 for 18 holes with a ½ cart.

I also asked several of them how they would like it if they could generate $1.4M in greens fees/cart fees and they looked at me like I was the man on the moon.  “And how the hell do you expect me to do that?”, was the basic response.

So what gives… how can $55/month/golfer translate into increased revenues for most courses?

 

There are two sets of evidence:

#1 – The Real World– The PCC was not created in a vacuum. It is a variation of other multi-course membership programs across the U.S.  As an example, GreatLife Golf & Fitness operates membership programs in the Kansas City and Sioux Falls markets.  In those markets, GreatLife has dominant market share (they own a high percentage of the daily fee courses in those markets and also include affiliate courses in their membership programs) and uses a monthly membership fee model very similar to the PCC.  If you believe what participants in these markets tell us, golf revenues are up dramatically… in line with our $1.4m/year revenue estimate if adjusted for differences in market pricing.  While I’m still working to get more detailed facts on these markets, the evidence seems to be solid that a significant uptick in revenues has occurred.

#2 – Extrapolate current PCC Results – After studying other models, Kevin came back to the Twin Cities and consulted with several local course operators to construct the PCC model, in which he offers a Faustian bargain to golfers and golf course operators:

To golfers… if you give up the ability to play during Saturday and Sunday morning prime time and pay a slight premium for carts, we will offer you unlimited greens fees for $55/month.

To golf course operators… accept some rate risk during non-peak times and we will deliver new, younger, quality customers with zero upfront cost, no barter or freebies, someone else to do quality control on the customers, year round revenue to help get through the winter and enough incremental revenue to enable you to get rid of bartering… all without impacting weekend prime time, league and event revenue.  (If you want the full sales pitch, contact Kevin at TwinCitiesGolf.com.)

 

Membership in the PCC is limited to approximately 50 members per participating course… current numbers are about 80 courses and about 3,000 members.  When asked what his ambitions for the PCC are, Kevin responded this his current intent is to cap PCC participation at 100 courses and 5,000 members.

So… perhaps speculating on what would happen if every golfer jointed the PCC is a moot point, but let’s have some fun anyway and we might just learn something interesting in the process.

Here’s how we projected current PCC results to a GreatLife-like local monopoly.

We started with some facts and estimates:

  • There are ~425k golfers in the Twin Cities (Source: Pellucid Corp.)
  • There are 90 regulation length public golf courses in the Twin Cities Metro with peak weekend rates of $64 of less

Now assume that:

  • 25% of all MSP golfers are avid public course golfers who join the PCC
  • All 90 target courses participate
  • The average course blacks out 6,000 rounds that can’t be used by PCC members (prime time rounds (Saturday 7-11am, Sunday 7-11am and Event rounds) and sells these at an average of $50/round
  • Average PCC members play 25 rounds per year and use carts approximately 50% of the time (the experience to date has been 25-29 rounds and ~50% carts, per Kevin Unterreiner)

Crunching the numbers on those facts and assumptions yields an estimated average per golf course of $1.4M in golf revenues (greens fees, cart fees).  That does not include a deduction for any fees charged by PCC for running the program (credit card fees, marketing, admin).

As I was doing my analysis, I wanted some 2nd opinions so I sent the spreadsheet calculations to a couple of leading local golf course owners who I know are particularly astute numbers guys.  I just sent the raw numbers without any color commentary.

One of the owners sent me a response that ended with “so are you saying you are a proponent?”

Which leads us to…

 

Ok… so what?  What if anything should you do with this information?

It depends.

If you’re already participating in the PCC, you know what it is or isn’t doing for you.

If you’re not participating in the PCC but are intrigued by the potential, do some reading at https://www.twincitiesgolf.com/public-country-club/and contact TwinCitiesGolf.com directly to discuss how the program might impact your financial results.

If you’re a course operator in a market outside of shouting distance of the Twin Cities and you’re intrigued, maybe you want to dig into this concept further and get it started in your area.

If you don’t buy into the multi-course membership model and believe your course is better off operating independently, then stay the course… but keep an eye on what is going on with the PCC as it evolves.

If you think there is some merit in the concept of a multi-course membership model but there is something about the PCC model that prevents you from embracing it, consider putting a consortium of courses together and create your own virtual country club program.  Understand, however, that there is a lot of devil in the details required to make a program like this work and it’ll probably require a 3rd party operator to avoid infighting, to ensure fairness and to provide some process and technology support.

Or, maybe you fall into another category… have I missed anyone?

_ _ _ _ _ _ _ _ _ _ _ _ _

I hope this post has provided some insights that you found helpful.

Of course, there are LOTS of qualitative issues relating to the PCC that are also worthy of consideration… the short-term impacts might evolve into something quite different over the long-term.  If you’d like to continue this discussion, post a comment on this blog or drop me a line at thegolfgadfly@grouplooper.com.

 

0 Comments

Leave a Reply

Note: Your email address will not be published.