Golf Course Operators Regain Some Pricing Power
With golfers turning, and returning, to the golf course in greater numbers over the past year-and-a-half, this increased demand has given some pricing power back to operators – at least in certain markets.
An analysis of fees in the NGF golf course database revealed that more than one-third of public golf courses increased their peak-season weekend green fees this year, by an average of 11%. (Note that posted peak fees, the only pricing data NGF maintains, are almost always discounted.)
In a separate survey of golf course operators, two out of three told us they made one or more pricing adjustments in the past year, the biggest change being a rise in non-peak rates (+5-10%, on average). Other changes include increased peak season rates, a stretched or shifted peak season, and adjustments/limits on discounts such as senior, junior, weekday, twilight and resident rates.
Increased demand in rounds was the main contributing factor to green fee increases, while others cited increased costs related to labor/wages, supplies and maintenance. Some also noted that competitors raised their rates and they followed suit.
Many operators are playing catch-up, as their prices had not been raised materially, if at all, in years.
Golf, on the whole, continues to shine as an affordable option compared to other experiences that take about a similar amount of time: professional sports events, theme parks, skiing, etc. This affordability likely contributed to increased demand seen during the pandemic, as there are a wide variety of golf course choices at different price points, unlike many other activities/experiences.
While some might regard price hikes as bad news for golfers, or for demand in general, it has in fact been a buyer’s market for green fees for a very long time. Fair is fair. Pricing adjustments, which haven’t kept pace with inflation, will help improve the financial health of many golf courses, which is good for everyone in the business.
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