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Simulators may be costly, but are they the right investment?
By Scott Kauffman
Life as a golf facility owner these days can be fraught with uncertainties, the least of which can be triggered at any time by effects from the pandemic or whims of the weather. One of the bigger challenges facing operators is how to keep growing the next generation of golfers– and maintaining fiscal sustainability – in a backdrop of changing demographics and attitudes towards traditional golf experiences.
One proven marketing solution for the industry’s sluggish growth seems to lie in the not-so-traditional world of golf simulators. With the TopGolf phenomenon sweeping America’s landscape, it now introduces the game to a whole new segment of consumers along the way. Course owners continue to embrace these alternative simulators and gaming experiences to help drive new golf and food-and-beverage revenue streams.
Not every owner has the wherewithal to retrofit their facility with the latest Trackman technology or high-profile Golfzon. Full Swing simulators can cost on average $60,000 for the hardware itself. Factoring in the cost of software upgrades, monthly lease payments, build-out for the new amenities/venues, and the overall tab for this type of technology can cost a facility six figures.
For some course owners, however, these cost-prohibitive simulator investments have been put on hold thanks to a dramatic turn of events ironically caused by the ongoing coronavirus crisis, especially at a time when many industries are experiencing significant declines in overall traffic and revenue due to Covid-19. Many courses throughout America are actually having some of their best years on record.
“We set all-time records in May, June and July,” says NGCOA president Steve Graybill, co-owner of daily-fee Foxchase Golf Club in central Pennsylvania. “We actually closed the gap of losing six weeks (due to forced quarantine closures) in seven weeks. People are coming out because there’s nothing else getting in the way.”
Throughout the country others are experiencing significant gains in nearly all year-over-year business metrics as well – despite losing four to eight weeks on average because of mandatory closures. Sterling Golf Management, Inc., of Newton, Massachusetts, reports most of its eight Boston-area facilities were up year-over-year through July, from green fees to cart fees.
“Every one of our golf courses is so far ahead of last year it’s ridiculous,” says Jay Miller, the company’s director of golf course operations.
Miller went on to note Norwood Country Club’s practice facility is so busy that range ball revenues were up sixty percent in July versus the previous year with $40,000 in sales – and that was despite being shut down for eight weeks. It didn’t hurt that Miller put in new balls for the season as well as new range mats that guide golfers’ feet and ball positions.
The greatly enhanced overall traffic at Norwood, a par-71, 5,630-yard course built in 1975, is one Sterling Golf decided to shelve its plans to retrofit the range with a new indoor-outdoor building comprising 10-new simulators with comfortable seating and bar service.
“We’re still thinking about it, but it’ll probably be next year in the fall,” Miller adds. “To be honest, all of the (indoor) places with simulators are getting their (butts) handed to them. We don’t think this Covid-19 thing’s going to be gone for another year. If things don’t get back to normal until then, we’re not going to invest $130,000 and the (return on investment) now becomes another extra year.”
That doesn’t mean Graybill has given up on the concept behind this simulator craze. He ordered a new simulator for his facility in August and will finish building out with a new second-floor venue above the pro shop that can be used for golf fitness and simulator experiences.
The total investment is about $10,000 for the Flightscope/Mevo+ technology and cost of the simulator setting with nice furniture. Lem Clevenger, the founder of yardstickgolf.com, specializes in golf simulator research and consulting, expects more of these investments in the future.
“General interest in these facilities is growing and diversifying,” Clevenger says. “I continue to see strong search volume and user traffic on my site. What is interesting is that the interest in golf simulators has expanded from pure entertainment venues to training venues and as additions to other types of business.
“Early days, I would mostly hear from folks looking to open a three-to-four simulator golf center with limited food and beverage. Now I am hearing from folks looking to do bigger venues, looking to incorporate it into their fitness training centers like a Titleist Performance Institute.”