The Pellucid Perspective - October 2020 - 5

So how would we advise this municipality? Fortunately, the immediate 10
minute drivetime area has very positive golf conducive demographics.
lower than the base population data would suggest. While we are
getting anecdotal reports of "new" and "returning" golfers due to
the "safe recreational" character of the game of golf; this facility
has some basic demographic challenges. In addition, the current 5
Year Growth projection through 2025 is well below the national
average.
So how would we advise this municipality? Fortunately, the
immediate 10 minute drivetime area has very positive golf conducive demographics. How much of that area and its population
extends beyond the actual municipal boundaries is complex; but
we do know that the 20 and 30 minute areas are essentially "nonresident" and are seeing demographic shifts that are causing the
major drop in golf participation in the aggregate 30 minute trade
area. There is a smaller pool of "non-resident" golfers to draw
from now than there was 20 years ago; and even the pandemic
boost will not correct the problem.
Displacing the "non-resident" past supporters by granting different access procedures for the newly interested "residents" is
potentially problematic on two levels. First, the revenue impact
will be major. Second, what happens if the boom in pandemic
golf interest proves to be temporary? Will they be able to get the
"non-residents" back after driving them to play elsewhere?

The real issue is actually a fundamental pricing problem. A
close investigation will reveal that the "resident" rates are "below
cost". In our sidebar article (Pg 10), we will outline how to determine what it costs to produce an available round of golf. In this
case, the "resident" discount results in a rate that is below their
cost of production.
We also would point out that their "resident" rate is probably
also "below market". How else can you explain "non-residents"
paying about twice as much and historically providing 80% of
the demand? In the end, the only way for this course to avoid the
revenue shortfall caused by a politically imposed policy change
will be to completely re-evaluate their pricing structure. They
will need to adjust their "resident" rates to more accurately reflect
both their cost of production and the actual market "value" of
their available rounds of golf.
Time will tell whether the politicians have the stomach to
trade access for increased prices like they should. Or will they end
up like many other municipalities across the US that are finding
they are selling golf "below cost" and forced to decide whether
subsidizing golf is a proper use of public funds. The pandemic
boost in golf interest is simply making that dilemma more interesting.
n

The Lodge of Four Seasons
Lake Ozark, Missouri

DISC OV ER

the troon approach

Troon's collection of daily-fee, resort, private, and semi-private facilities
create memorable member and guest experiences at renowned clubs around
the world. By utilizing the professional expertise of our team and collaborating
with our clients, we reinvigorate golf courses and club communities, making
them relevant, healthy, and sustainable. To learn more, contact the Troon®

Visit TROONMGT.COM to check
out our new video and learn
more about who we are,
how we help, and why our
clients partner with us.

business development team at 480.477.0505, or visit TROONMGT.COM.

WWW.PELLUCIDCORP.COM

THE PELLUCID PERSPECTIVE

5
https://www.troon.com/management-services/ http://WWW.PELLUCIDCORP.COM
The Pellucid Perspective - October 2020

Table of Contents for the Digital Edition of The Pellucid Perspective - October 2020
