Driving Revenues with New Approaches
There’s no shortage of entrepreneurs, start-ups and golf industry stakeholders trying to emulate what has made Topgolf so successful in luring golfers and non-golfers alike to its golf-entertainment venues. Look no further than Drive Shack, which opened its Lake Nona, Florida, location this year and has at least five markets chosen for short-term expansion in addition to plans for a New York City location. Companies like Flying Tee and 1UP Golf are also looking to grow or gain footing in the niche market.
With the success of Topgolf and the increasing consumption of golf in non-traditional formats, golf course operators are also increasingly seeking ways to re-create, on some level, the type of atmosphere and excitement that these off-course venues provide. Here’s a closer look inside one example of an operator investing in creative technology-based facility enhancements with the goal of engaging more customers and beefing up the bottom line.
INDIAN WELLS GOLF RESORT
Shots in the Night debuted in mid-October at Indian Wells Golf Resort in California, engaging golfers and non-golfers alike in unconventional golf games after the sun goes down at the facility’s driving range and previously underutilized putting course. The gaming system and technology was originally designed for indoor simulator-based applications, so Shots in the Night may be at the forefront of its on-course uses. And it’s been an early success. A recent PGA of America event that was related to Suzy Whaley’s election as the organization’s first female president drew more than 300 guests.
So, how did Shots in the Night come about?
It started in 2016, when the city of Indian Wells, California, charged Troon Golf, the operator of its municipally-owned Indian Wells Golf Resort, to use ‘outside the box’ thinking to create new revenue streams for the successful, but expensive-to-run, premier facility.
Located in the competitive Coachella Valley, the 36-hole Indian Wells Golf Resort was developed in 1987 in part to help drive hotel nights and overall tourism-related revenue in the greater Palm Springs golf market. The city invested considerably in the facility, including a $97 million upgrade in 2006 that included major golf course improvements and an expansive new clubhouse. In 2013, the city added an on-site pavilion to host larger banquets and parties.
The resort’s visually-stunning golf courses benefit from being surrounded by four hotels (two of which are within walking distance) that total about 1,500 rooms. Still, the direct economic performance of the golf club had declined to five-year lows by 2016, resulting in city subsidy of the golf operation. Rising minimum wage costs and declining golf participation from resort guests contributed to operating deficits. The biggest contributing factor was a decrease of overall rounds at the facility, from 80,000 rounds to 75,000 rounds annually in a five-year span.
With growth from playing fee revenues constrained, Troon Golf explored ideas to generate additional revenue sources that would help ensure the premium level of golf course conditioning and overall customer service could be preserved.
“Whatever concept we decided to adopt needed to accomplish two primary objectives,” explained Indian Wells Resort General Manager Steve Rosen. “One, it had to provide a new and different source of revenue that would leverage the golf course assets when they were traditionally not being utilized – after our golfers leave for the day. Two, we wanted the new revenue center to be one that facilitates the growth of golf by providing a non-threatening introduction to the game.”
Troon turned to NGF Consulting to analyze the feasibility of one of the ‘go-big’ ideas: the potential addition of a new Topgolf-like golf entertainment venue that could be added on the site of the existing driving range. Market dynamics have resulted in NGFC’s practice becoming increasingly focused on helping operators come up with new revenue streams, and analyzing the financial feasibility of revenue growth-driven facility investments.
In the case of the proposed new facility at Indian Wells Golf Resort, Troon and the city envisioned that such a venue would add a significant source of direct revenue to the resort and bolster visitation to the area, especially from drive-in markets.
After extensive market research, including resident and visitor surveys that NGF conducted through the Greater Palm Springs Convention & Visitors Bureau, NGF Consulting concluded that the new golf entertainment facility would benefit from strong demand derived from the four on-site hotels as well as from other parts of greater Palm Springs, which draws about 13 million annual visitors but is relatively lacking in nighttime entertainment options. NGF put together a recommended program for the venue, and financial model results showed annual net income stabilizing at about $700,000 on top-line revenues of $3 million-plus.
While the city was confident in the NGF projections, the council shied away from the risk associated with an estimated $11 million price tag to build and equip the range entertainment building. Troon and its on-site management team began meeting with potential golf technology partners to come up with a concept that would provide the same basic elements that have proven so attractive to Topgolf customers – golf, technology, social atmosphere, gaming, music and food & beverage – but with a much lower investment footprint than the large permanent golf entertainment building would have entailed.
SHOTS IN THE NIGHT
Enter NextLinks, a Santa Ana, California-based company that offers entertainment concepts featuring putting games and golf simulators enhanced by lasers and neon lights. Games powered by NextLinks’ proprietary software gave rise to the Shots in the Night events that enable the Indian Wells Golf Resort to make money after the sun goes down.
The putting course features seven games (Golf Horse, Golf Darts, Golf Shuffleboard, Golf Beer Pong, etc.) on seven greens, with the NextLinks technology projecting game boards down to the green with colored lights. Scoring is tracked on a computer screen at each green.
In addition, large inflatable and lighted targets are set up on the range for golfers to take aim at with glowing golf balls. Each bay features cushioned couches and chairs.
“We’re already seeing the magic of this project realized as families where Dad is a serious low-handicap golfer and mom and the kids who’ve never teed it up are playing these games together and having the same amount of fun,” says NextLinks CEO David Shultz, who has a background is in avionics and aerospace engineering projects.
Adding to the experience is a chef-curated food truck, full-service bar, a DJ station, and an outdoor seating area where people congregate to dine, enjoy a cocktail with friends, or just observe the games and listen to music. The city’s total investment in the project was about $700,000, including $215,000 for the food truck and the balance to equip the venue and install the technology. The resort pays NextLinks an annual license fee, which includes technology upgrades and maintenance.
“It’s still early, but we believe we hit a home run,” says Rosen, the resort’s GM. “We also wanted to send a message that growth of the game has to be fun and not so thought- and technique-intensive.”
For now, the plan is to restrict general public play at Shots in the Night to the high season, from about mid-October through April, on Thursday, Friday and Saturday evenings. The venue is available for group bookings the rest of the week and Troon is also open to expanding to the hotter months if demand – especially from the on-site hotels – seems to warrant it. There have already been weeks in which the facility was fully booked every night.
ECONOMICS AND ENGAGEMENT
Golf courses are high fixed-cost operations, and it simply makes good business sense to get the most out of the assets by stimulating demand during slow demand periods, especially if the initial investment and incremental operating costs are not prohibitive.
Troon Golf and the City of Indian Wells took a creative approach to revenue enhancement that piggybacked off of the growing wave of off-course golf entertainment venues. These innovative ways to engage with golf hold great promise for activating non-golfers into the game (NGF consumer research continues to show there’s more than one interested non-golfer for every existing golfer). At the same time, they improve golf course economics for operators willing to invest in today’s evolving tastes and technologies.
And Shots in the Night is but one example of a creative revenue growth strategy by golf courses.
ClubCorp has introduced Drive Zone, a driving range experience currently offered at Brookhaven Country Club (Dallas area) that features bays with interactive games powered by Toptracer Range technology. The venue has suites and a lighted outdoor lounge with plush seating, fire pits, music, TVs and games. Drive Zone’s food & beverage service includes a full-service menu, seasonal beers and cocktails.
So, what are some of the other unique concepts and success stories you’ve encountered within the industry? Contact The Q and let us know.
Learn From NGF Members
Whether you’re the head planner of your upcoming buddies golf trip or simply along for the ride, we’ve gathered a few easy ways to keep everyone in your group happy.Read More...
With the golf season getting into full swing, the days are growing longer for course maintenance teams. Your plans and budgets are in place to help guide your superintendent ...Read More...
For most golfers, the idea of an in-home golf simulator is nothing more than a fantasy. However, with advancements in technology, your own golf simulator is now more attainable than ever.Read More...