Golf’s Biggest Threat

dustin.ashby@gmail.com August 14, 2014 0
Golf’s Biggest Threat

Booking a round of golf online is easier, quicker (and often cheaper) than ever. But, while the technology is great, it’s creating a headache for operators who are struggling with discounting. Some are concerned that third-party marketers who barter rounds are doing more harm than good by driving down prices.

For every wonder that technology brings, it also sometimes brings an unexpected bummer.

Texting, for instance, is great.

Texting while driving? That’s not so great.

Online tee time innovations?  Fantastic!! After all, online technology allows golfers to book tee times at their convenience. All it takes is a couple of clicks and they’re set.

However, many golf courses rely on outside firms, like GolfNow, to provide for online technology. For compensation, these third-party firms seek tee times, which they sell from their own portals, at deep discounted prices.

Customers love the deals so much that they expect them – all the time.

And now we have – at least some golf course owners argue – a race to the bottom, as courses cut green fees to remain competitive with the discounted rates. How low do they go?  Try 99 cents.

Um, that would be the bummer, these operators say.

So forget droughts or changing demographics or the economy. Some in the golf industry fear golf’s biggest threat is third-party tee time marketers who barter tee times.

Not all golf courses complain about the discounted “bartered” tee times because third-party marketers help them to sell tee times they normally would not sell.

GolfNow is owned by NBC Sports Group – which includes the Golf Channel in its portfolio. It says concerns about bartering are overblown, since it’s estimated that only 1 or 2 percent of all rounds sold are bartered. Only about 15 percent of rounds are even booked online.

If so few rounds are bartered, how can it be impacting pricing as critics contend is  happening.

It’s expected that online tee-time bookings will increase because of the next generation of golfers has grown up using computers, tablets and smart phones. Younger golfers also don’t have the same loyalty habits as older golfers, industry experts say. They’re more apt to shop around.

So the stakes could be quite high for golf courses and the third-party tee time marketers.

The debate as the attention of the National Golf Course Owners Association, which created a task force that is looking into partnering with a tee time provider in hopes of better protecting courses.

“The ideal system that would be offered through this partnership would be dedicated to the economic fairness for golf course owners and operators – the ultimate stakeholders in the golf business,” the NGCOA said in a statement.

The market of third-party tee time marketers is growing. GolfNow, the industry leader, booked 11 million rounds last year, up by more than 30 percent from the year before.

It works with more than 5,000 courses and has bulked up through acquisitions. Last summer it acquired BRS Golf, a British tee-sheet service with 750 courses and FORE! Reservations, an American counterpart with more than 2,000 golf courses.

While the acquisition of FORE! Reservations did serve to bulk up the GolfNow portfolio, many believe the company will experience a sharp decline in courses subscribing to the service. One industry observer predicted GolfNow will lose as much as 30 percent of its customer base, and the main reason for the departures is that golf course operators simply don’t like the GolfNow business model, he said.

GolfNow is in the process of launching a new technology platform that will allow the company to reach beyond just the tee time marketing side of the business. GolfNow One, a comprehensive golf course management system is on the horizon and will be targeted at free golf courses of administrative tasks and allow them to concentrate on making the golf experience second to none.

It’s also intended to streamline operations. Today, operators may be dealing with several vendors when it comes to technology needs. This way, they will only have one.

The Colorado PGA studied the issue of third-party tee time marketers and found that third part tee time providers generated more than $2 million from the sale of bartered tee times in 2012. Vendors averaged $27,500 in revenue per facility in tee times sold.

In response, it created the Colorado PGA Tee Time Alliance, which offers participating courses a number of tools, from websites to loyalty rewards program – to counter the need for third-party the time marketers.

Working with third-party tee time marketers doesn’t have to be the end of the world, some operators say. Courses need to be vigilant when it comes to the fairness of the partnership, though, and aggressively pursue golfers via their own website promotions.

At the end of the day, it’ the operator who enters into any agreement with a third-party tee time marketer and if sound in their marketing practices, the operator can get the best of both worlds.

A company like GolfNow offers reach that even the most innovative of privately owned golf courses cannot achieve. Advertisements on the Golf Channel and it’s other NBC properties garners the attention of the mainstream sports and golf fan, driving new trials to the online platform. The savvy golf course operators will leverage this reach to drive the new trial but quickly transition the customer into one of their own. Once captured as their own customer, it’s up to the operator to cultivate and sustain a meaningful relationship with the new player.

And that’s where the rubber meets the road. Unfortunately too many operators aren’t equipped with the business acumen to take full advantage of the marketing reach a national company like GolfNow provides. Instead, they remain reliant on GolfNow to drive their business development efforts and as a result pay the ultimate price of losing control over their own businesses future.

 

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