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November 2018

Order Up! Growing Beyond the Gree

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Increased revenues reflected by improved hospitality

By David Gould

Statistics on golf participation show that some 15 percent of Americans age 18 and over tee it up at least a six times a year. No survey data is needed to tell us what portion of the U.S. population consumes food and drink — it’s everybody.

During golf’s lengthy period of contraction, course managers have been urged to better leverage any revenue opportunities available to them beyond green fees and memberships. Food and beverage has been staring them in the face as the most prominent example.

This contention was recently supported by some hard data, as reporters from an Illinois regional newspaper, the Daily Herald, dove into the financials of 36 government-owned golf courses in suburban Chicago. They found that 22 of the 36 courses had lost money in the prior year, while the other 14 managed to avoid this fate “mainly through restaurant and banquet services,” where they each had suitable infrastructure and a management focus on dining and event activity.

The profitability of the 14 courses in these categories would likely have been aided by a well-developed culture of hospitality and guest care. That’s the viewpoint of Whitney Reid Pennell, founder and president of Virginia-based RCS Hospitality Group. A published author and in-demand seminar leader, she is recognized worldwide as an expert in club management and offers online training programs for all levels of golf operations available at rcsuniversity.com. Even if course managers do a fine job with traditional golf service, her experience tells her, they face revenue headwinds simply because “people today are geared toward instant gratification and leisure activities that are fun, easy and convenient. Golf doesn’t fit that description for many people,” says Pennell.

So, if your golf property and the skills of your staff let you offer a memorable and delightful experience in which food, drink and attentive service are the main selling point, you can widen your audience and build your overall business, all the while taking care of your core market — devoted golfers.

The strategy employed by Vargo Golf echoes what Pennell preaches. A multi-course operator with five facilities north of Detroit, the Vargo group began operations 20 years ago using the standard golf business model, but has tilted strongly over time toward a hybrid of golf and banquets. According to its vice-president of operations, Ed Maciejewski, Vargo looks at new acquisitions on a regular basis but would never acquire a golf course that lacked the capacity to handle good-sized events. At the same time, the company would happily acquire the right banquet hall, course or no course. Even the logos of the facilities have the word “banquet” in them.

“Our revenues are 60 percent from the golf side, 40 percent from banquets, but our profits are more like 65-35, golf being the smaller portion,” says Maciejewski. “Our first golf course had a modest little clubhouse and yet from the start we got lots of calls asking if we could host big weddings. We made up our minds to capture that market, in part to free ourselves from a totally weather-dependent revenue model. It’s proven to be as valuable to our bottom line as we could have hoped.”  

The big challenge — especially these days — is staffing, but most other aspects of selling, preparing and conducting Vargo’s long season of events goes by time-tested formulas, according to Maciejewski. Interestingly, his company treads lightly with non-event food and beverage. “You could make a choice to do both, or your golf facility could choose to do the daily-restaurant part aggressively,” he says. “In our case, the big advantages in terms of margins and execution have really been from events.”

Focusing on the banquet trade naturally makes your customer base more female, the Vargo team has found, and that’s a good thing.

“Women are good customers, they’re good golfers, they’re good spenders, they’re good to deal with,” Maciejewski asserts. “We’ve often discussed how great it would be to run an all-woman golf club.”
As it is, Vargo puts on five women-only golf tournaments a year, selling them out routinely. 

The question arises: What other population segments could you draw to your golf facility? Adding FootGolf has been proven to bring in sports-minded younger people of Latino and Middle European backgrounds, for whom the British game of golf tends to be once removed, culturally. And the competitive FootGolf crowd is known for spending freely in the grillroom following play. High school reunions are another market that golf courses are going after.

Step up with music, food trucks
Could your team’s hospitality efforts reach far enough beyond golfers to engage lovers of blues music? That happened at Jonathan’s Landing Golf Course in Magnolia, Delaware, which has become home base for an ambitious musical organization called the Central Delaware Blues Society. Stop by any Thursday night at 7 p.m. and you’ll hear high-class jamming by some of the best players in the entire Eastern Shore region. The non-profit society is an established 501(c)(3) corporation “dedicated to the preservation of America’s native musical art form, the Blues.” It was actually founded by the Jonathan’s Landing general manager, Craig Coffield, a blues aficionado who saw an opportunity to merge golf and music for fun and some profit.

In a society that seems to get more “foodie” with each passing day, the popularity of food truck expos is only growing. Golf courses with any sort of overflow parking capacity are a natural place for one of these confabs, whether it’s convened for a special event or as a regular attraction. When Hickory Valley Golf Club held a 50th anniversary tournament this past summer, participants were tickled to have a 10-truck convoy arrive vending “street gourmet” cuisine.

“It was fairly simple to set up,” says director of golf Steve Holauchock, whose general manager David Hassinger handled the arrangements. “These trucks seem to work through one person who communicates with the point person at the location.”

Indeed, there is a California-based outfit, the National Food Truck Association that sets industry standards ensuring that vendors who belong to the group are properly licensed, permitted and insured. On the association’s website there is contact information for “location management specialists” who act as liaisons between a business establishment or community group and the roving purveyors.
In the case of Hickory Valley, bringing in food trucks to celebrate 50 years in business was a one-off with no revenue bump, but if and when they do this next, according to Holauchock, that will change. For course owners who want to liven up their F&B operation without the need for a heavy capital investment, the food truck approach holds considerable appeal.

Update with technology
Course managers who feel an increasing burden to leverage hospitality revenue can take heart in the fact that new technology has come along to assist them. In fact, any facility that resolves to up their game in F&B going forward might also choose this point in time to upgrade their software package and platforms to cloud-based. Several management solutions vendors are able to offer this now, and the early-adopter courses are quickly learning about its benefits, especially on the hospitality side.

Switching from local-server-based computing in favor of the cloud option is how retailers of all types remove shop counters and put merchandisers with tablets out on the sales floor. It likewise makes it possible for a cold beer to be ordered by a practicing golfer and paid for right there on the range.
In beverage cart service, the new cloud-driven systems appear to hold major potential. At Peoria Pines Golf Course in the Phoenix suburbs, General Manager Scott Richmond logged just a few months in the cloud with the new G1 system from GolfNow and quickly made an upward forecast for beverage-cart sales in his fiscal year of 2018-19. Actual revenue for that category in the fiscal year just closed was $50,000 — he’s got $62,000 projected for the 12 months upcoming.

“This industry has 99 percent of our beverage carts out on the fairways using cash, which absolutely holds down spending compared to what we’d get if payments could be made by credit card,” Richmond says. “In one month, I saw that proven out. As a result, that revenue line on next year’s revenue projection went up.”

A general mindset worth adopting is that there’s a great big world out there of traditions, avocations and passions. Opening the doors of your golf facility to them is a logical way to build new revenue streams and inject new energy into your core business of selling green fees at the same time.

David Gould is a Massachusetts-based freelance writer and frequent contributor to Golf Business.

 

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