By Steve Eubanks of GolfBusiness.com
The trap is simple, but like the frog in the slowly heating pot of water, golf course owners fail to jump out because they don’t realize they’re boiling until it’s too late.
Third-party tee-time companies suck you in with attractive offers of technology and tee-sheet management, website construction, even social media engagement. For an owner who is worried about the sprinkler box on 12 or the leaky hydraulic line on his two-years-too-old greens mower, it’s an enticing proposition. They will handle everything. All the outfit wants in return is a few tee times, marginal ones in off-peak hours that would probably sit unused anyway. For that, they promise you the world.
And before you know it, you’re stuck. You’ve lost control of your tee sheet; lost control of your rate; lost control of your margins, your income and your messaging. Your course and your brand are worth what a third-party facilitator in a far-distant place says it’s worth. In the meantime, your expenses – payroll, insurance, chemicals, fertilizer, equipment, capital improvements – increase at an unyielding pace.
“We have properties in Pinehurst, Orlando, Jacksonville, Hilton Head, and you can go play those courses with ease if you’re taking a trip with your family.”
“That’s the trap we see every day,” said Todd Brown, who, along with the brother, John, formed Brown Golf Management in 2011. “Owners lose control of their revenue, in essence giving control of their rate to another party while keeping the responsibility for their expenses that just go up and up.”
The Browns stepped into the management and ownership business in 2011. In eight years, they have acquired, leased or signed management agreements with 20 facilities encompassing 28 courses in seven states, a remarkable growth curve built on one simple principle: “We take back control of revenue and we use technology to grow that revenue,” Brown said.
To many, the technology seems space-aged, even though it is becoming more common by the day. Players can book and pay for tee times with their Alexa devices. Player profiles are automatically uploaded, and specialized merchandise offers are texted to players before they arrive for their times. You can request and receive tee times via text or email. And you have reciprocity with no up-charges to any Brown-managed facility in the country.
“If you’re a member of one of our clubs you can travel to some of our destination locations and play,” Brown said. “It’s about $45 in season and out of season, it’s like $35. We don’t charge you an add-on. We have properties in Pinehurst, Orlando, Jacksonville, Hilton Head, and you can go play those courses with ease if you’re taking a trip with your family.”
The Brown’s timing was perfect. Golf was still reeling in 2011. It was a buyer’s market and they were ready to buy. “We had a fortunate start,” Todd Brown said. “We got hooked up with a capital investor. One thing led to another. We bought a few courses, leased a few and managed some. Do that and before you know it, you’re pretty sizable. But we put a lot of assets into getting our message out there.”
The message is simple: Anything a third-party discounter tells you they can do, Brown can do better, in house, so that control remains within the club.
“Our optimum club is semi-private where, when we come in, they do a minimum of $1.5 million in revenue, but they need more direction and control over that revenue,” Brown said. “Those are things that we’ve done really well. Then you control the expenses. So many of the properties we see today the expenses have morphed out of control while the owners no longer have 100% control of their revenue.”
“Third-party tee time operators sell your times for less than you could command on your own. We take back control of the revenue while providing personalized service.”
The Browns own or lease 60 percent of the clubs in their portfolio. The rest are third-party management contracts. Some, like Tanglewood in North Carolina, are partial management and consulting contracts, but those are rarities. The company’s differentiating philosophy is capturing data and controlling revenue. Partial deals don’t fit that mold.
“Even a company my size, I’m able to buy things at the same pricing discount as someone who has 200 clubs,” Brown said. “You reach a cap with purchasing discounts, so that adding more clubs doesn’t give you incrementally greater savings. There aren’t any excess discounts. But with 28 properties, I can still visit every one of them every year. If I had 200, I couldn’t see them or have a personal impact on them every year.”
Still, Brown hopes to get to 45 or 50 clubs in the coming years. There are certainly that many owners who have lost control of their revenue – frogs slowly boiling, with only one way out.
“It’s a sad fact of the business,” Brown said. “Third party tee time operators sell your times for less than you could command on your own. We take back control of the revenue while providing personalized service. It’s worked pretty well so far.”
This article is courtesy of GolfBusiness.com