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May 2021

Considering Your Options

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Should you venture into the world of non-golf revenues?

By Doug McPherson

The decision to enter the world of non-golf revenue back in the late 1970s was an easy one for Kathy Aznavorian.

“Some customers asked us to do steak dinners for group and league outings. We listened and began serving steak dinners,” said Aznavorian, owner of Fox Hills Golf & Banquet Center, in Plymouth, Michigan.

A few years later she added a fish fry on Friday nights.

It all went well enough that in 1989, Aznavorian added a clubhouse with enough square footage to accommodate weddings and parties to widen the revenue stream.

Then she realized the clubhouse was empty on Sundays so she introduced Sunday brunch. 
 
Later, Fox Hills launched foot golf, played with a soccer ball, to add some life to dead times on the course. 

She says it was all about listening to customers and paying attention to opportunities – all the while just using the facilities to introduce the local non-golfers and residents to her facility.

It’s a question that eventually hits every course owner or operator: Should I venture into non-golf revenue? Like anything else, there are pros and cons. The pros are obvious: When golf revenues sag, weddings or other events along with food and beverage can offer some balance. And you can introduce more folks to your course, who may decide to take up golf.

The cons? Aznavorian says point blank, “The food and beverage business is not easy. It demands extra staff – namely salespeople and conference rooms. You have to learn how to control your costs and it requires a different mindset.”

Sean Taylor, founder and CEO of Up to Par Management, a course, hotel and resort consulting firm in Lexington, Virginia, says other cons include pressure to perform “at the highest level and commit to the overall seriousness of weddings and receptions … you have a moral obligation to do it right” because they are important life events.  

“You must invest and go all in,” Taylor said. “Either commit or get out. With this commitment comes a cost of capital and talent.”
But he adds if the investment is “properly allocated,” it will pay back within a year.

“Profits from food and beverage and facility rental fees flow immediately to the bottom line,” Taylor said. A high-volume banquet and event business will always offset break-even, à la carte members’ dining. And profit margins can range from 25 to 40% depending on the venue, size and scope of the wedding. For a $100,000 wedding, this is a significant bottom-line contribution.”

Aznavorian says weddings account for about 30% of total revenue at Fox Hills.

On the expense side, Taylor says, is primarily staff. “Your highest expense is your greatest asset, your team,” he said. “An outstanding executive chef will not only deliver on the weddings, but also elevate your food and beverage operation for your guests and members.”
Other key expenses: an updated and ready-to-showcase facility. “Do you have Chiavari chairs? How are your chafers? Your silverware? These are expectations in today's wedding climate,” Taylor said. “Before you think about boosting your profit margins, first make sure your team can execute. Your team must be fully trained.”

One way to test the waters for an expansion, Taylor says, is to upgrade your golf tournaments to see how your existing staff handles the increased pressure. “The expectations and pressure for a properly executed wedding are intense,” he said.

If you opt for adding weddings and banquets, Taylor says communicating and coordinating with clients throughout the entire process is key for success.

“Your goal is a day of flawless execution. Don't leave anything on the table. If you are good at what you do, don't be afraid to charge what your team is worth. Five-star reviews come at a cost. Just deliver exceptional experiences and the positive financial results will take care of themselves.”

Aznavorian’s advice: “Be flexible and be ready for changing trends,” she said. “Over the 40 years that we’ve owned Fox Hills, we’ve had to adjust our thinking to meet customers’ needs. Don’t be afraid to ask questions. Get involved with your state and national golf course organizations to meet other owners and operators and learn from them.”

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