Know Your Club's Golf Experience Index
The experience of a round of golf can take on endless dimensions. Some days you may struggle through four hours of intense frustration and end up wondering why you play the game at all. Other times, you find yourself enjoying the Zen-like experience of being "in the zone." The mental experience is only one aspect of a golf round, but it’s undoubtedly the one that keeps us all coming back for more.
One perspective that a player typically does not consider, but those of us in the club management business should be aware of, is the value of the golf experience. What does it really cost to deliver that four-hour slice of club life? And if members are bringing guests out to experience the course, how does the cost of that experience compare to the price they actually pay for it—aka green fees?
Of course we all understand that there is no incremental, or variable, cost associated with a guest coming out to play. That's why guest green fee revenue is so valuable. It flows directly to the bottom line of the club. From that perspective, we are happy to collect whatever fee we charge. But is there a way to gauge the cost, or value of a round for either a member or a guest? And further, in the case of the guest fee, is there a way to compare the actual cost with the fee we charge. We believe there is and we created an index in Club Benchmarking called the Golf Experience Index as a way to measure it. The index is available to Club Benchmarking members in the Golf Operations Report View a Sample Report
Calculating the Golf Experience Index
STEP 1: We start by calculating the Golf Experience Cost...
(Annual Course Maintenance Expense + Golf Operations Labor) ÷ Annual Rounds of Golf
This provides the delivery cost of a round of golf at the club. The median cost-per-round for the industry is $74, but as you can see in the chart below, the range is very wide—from about $40 per round up to nearly $200 per round. Click the chart to enlarge.
STEP 2: To calculate the Golf Experience Index, we simply divide the guest green fee by the Golf Experience Cost , so Guest Green Fee ÷ Golf Experience Cost = Golf Experience Index
A value greater than 100% means you are "covering your cost" and achieving experience margin over and above the cost. A value below 100% means your guest green fee is at a discount to the cost of delivering the experience. The median value for the industry is 120%. The chart below shows that again, the range is wide, varying from 50% to 250%. It is important to note that about 70% of the clubs have an index greater than 100%. That may be food for thought for clubs with an index of less than 100%. Click the chart to enlarge.
Certainly many factors influence a club’s Golf Experience Index; perception of the club’s brand, the quality of the course, course activity levels, recognition of the bottom line value of guest play, etc. As is true of many Club Benchmarking metrics, we want to emphasize that there is really no “right” or “wrong” number when it comes to the Golf Experience Index. What we offer is an established benchmark which can serve as a point of reference in discussions about the club's priorities and as a guidepost for the decision-making process. Because it relates so directly to the bottom line, we encourage clubs that subscribe to Club Benchmarking to login and review their own club Golf Experience Index. Understanding your position on that curve will help you determine whether an adjustment might be beneficial to your club.
CB MEMBER NOTE:
- Login to your CB account
- Click on Finance & Operations
- Click on the My Reports tab near the top of the page
- Scroll down to run the Golf Operations Report