Driving the green: how your community's golf course can be more profitable - includes article on the golf courses at Bethpage State Park, New York

Does your community have a municipal golf course that is consistently crowded? Is it difficult to get tee times? Are the condition of your course and the amenities offered at your facility on par with other local public and private clubs? Has municipal golf generated significant revenue for your park and recreation department over the past few years" If you answered no to any of these questions, then something may be awry in the management of your community's municipal golf facility.

Golf continues to be one of the fastest growing sports across the United States. According to recent figures from the National Golf Foundation (NGF), over 24 million golfers played 465 million rounds of golf in 1994. Contrary to the perception that golf is generally played at a private country club, roughly 19 million of these 24 million golfers play the majority of their rounds at public, daily-fee facilities. These numbers - which have only begun to level off after a period of unprecedented growth in the 1980s - present an incredible opportunity to everyone associated with the game. Based the popularity of golf alone, if your community's municipal courses are consistently underplayed, in poor condition, or losing money, something is drastically wrong. How can your course live up to its potential, and also profit from the popularity of golf?

Determine Your Management

Options

Over the past few years the trend in the public sector has been to take larger, municipally owned and operated facilities such as golf courses, ice rinks, or aquatic parks down a convenient route to complete privatization. This process has been very successful for many communities around the country. Privatization eliminates day-to-day management decisions, and all but guarantees a healthy profit margin. However, you may be shortchanging yourself and your community by agreeing to a privatization plan before exploring all the available management options.

Between the spectrum of municipal ownership and operation or total privatization lie different levels of privatization. Among the most popular and effective is a partial privatization, or what is popularly known as the public/private partnership. public/private partnership involves linking the resources of private industry with the community parks and recreation operation. The partnership is an effective means through which needed capital improvements can be made to park and recreation facilities without the allocation of additional funds normally acquired at taxpayer expense.

In the state of New York, which operates 23 18-hole golf courses among its 150 state parks, the public/private partnership has become the preferred vehicle for facility improvement and reform. Ed Wankel, chairman of the New York State Golf Committee and deputy commissioner of operations for the New York State Office of Parks, Recreation and Historic Preservation, has implemented the public/private partnership as a means of needed reform in many of the state-run golf facilities. According to Wankel, partnerships can exist in many differing forms, and can be used to improve problem facilities, in addition to getting new course construction projects off the ground.

The simplest form of partnership involves contract management, or the hiring of private, contractors to operate and manage areas of a golf operation that were formerly under park and recreation department jurisdiction. Contract management can be an immediate cost cutter and revenue producer for a struggling golf facility. According to Wankel, many municipalities mistakenly try to manage their own concessions - such as food and beverage service - when in most cases a private contractor specializing in that particular concession can provide a higher level of service and quality at a much lower cost.

Public/private partnership through contract management continues to be a very successful tool, but according to Wankel, should only be implemented in certain circumstances. Golf courses that are legitimate candidates for a successful public/private partnership generally must meet one of the following criteria:

1. Operating at a deficit 2. In need of significant capital improvements 3. Overstaffed 4. Local government not willing/able to allocate the financial resources necessary for improvement.

Public/private partnerships are also being used throughout the country by communities who desire to build golf courses. There are an increasing number of private companies that will work with municipalities from the earliest conceptual and design stages, through the construction phases, and into management of the facility under a negotiated lease or contractual arrangement. Often times the only expense incurred by a community is the allocation of 150-200 acres of environmentally sound land suitable for a golf course. Many communities have preferred this route which provides the most simple and cost-effective means to build what would under most circumstances be a massive public project requiring a capital investment of at least three to four million dollars.

There are several good sources of information regarding both the public and private sectors of the golf industry. For more information on course feasibility, development and financing - as well as all other aspects of the golf industry - the National Golf Foundation (NGF) is an excellent reference. The NGF is a 6,000 member organization whose interests include promoting the game of golf through market research, information and educational services, and consulting, among others. Another valuable resource is the United States Golf Association (USGA), golf's governing body and leading research advocate. The activities of the USGA's Green Section are highlighted in a related article (see Parkes P. 82). One of NRPA's nine divisions, the American Park and Recreation Society (APRS), has recently formed its own Golf Management Division. The purpose division is to examine the major issues affecting public golf, while providing members with the opportunity to share insights and opinions with other professionals in the field. Newsletters and educational workshops, many of which are conducted at the annual NRPA Congress for Recreation and Parks, provide expert information that can be applied to your golf operation. Any of these organizations would make excellent points of contact for investigating golf course management and operation.

Another form of the public/private partnership gaining wider acceptance is corporate sponsorship of recreation programs or facilities. Many communities have succeeded in enlisting the support of local businesses as sponsors of recreation programs. Businesses can also contribute funds to the construction of new facilities or needed capital improvements to existing facilities. In a recent partnership between the automobile manufacturer, Saturn Corporation, and state and local park and recreation departments, 12 playgrounds were donated and installed in the New York-New Jersey metropolitan area, with more underway throughout the United States. Golf course managers should research the possibility of a partnership not only with businesses on a local level, but with larger corporations on the national level. A partnership where a major golf equipment manufacturer sponsors a junior program is one possibility. Corporate partnerships are win-win propositions and cost-effective ways to advance your goals.

Another management option which has proven to be very successful is the non-profit golf corporation. A related article in this month's Parks & Recreation (see Cook p.74) explains how the City of Baltimore, Maryland established a not-for-profit corporation that manages Baltimore municipal golf and has returned its five municipal courses to popularity and profitability at no cost to the local taxpayers.

Don't Over Privatize

The cost of staffing full-time employees is extremely high. Health insurance, retirement benefits, and taxes are all provisions that can quickly devour a budget. Privatizing enables you to shed the high costs of full-time staff, and is possibly the strongest argument for making a move in this direction. This is not, however, the only consideration in your decision. It is often easy to look too close at asset management and only see numbers. There is one asset that should never be overlooked....people. A motivated, energetic staff with roots in the community can often be your best long-term strategy for success. In addition, from a public relations standpoint privatization can often present negative images of profit-hungry managers who are willing to eliminate long-term staff.

While total or partial privatization may often seem like a can't miss endeavor in any case, any course can become more successful simply by becoming a profit motivated, customer-driven organization. Often many problems within a golf facility can be attributed to certain areas where the staff has less specialized skill and management experience than a private contractor. Divide your entire organization into departments and evaluate each separately. It is often in the best interest of the facility to turn over certain departments such as the food and beverage operation to a private organization specializing in food service. Other areas that can be scrutinized include the maintenance team, the driving range and practice area, and the golf cart fleet.

When making evaluations however, it is important to recognize what areas the parks and recreation or golf staff can run effectively and efficiently. In most cases it makes sense to hold on to the profitable concessions. One such concession that is frequently relinquished is the fleet of golf carts. This can be a mistake due to the extremely high profit margin that cart rentals offer when compared to the relatively low maintenance and operation expense.

It is also important to closely evaluate the status of the golf professional. Is the pro an independent contractor? Is he or she a civil servant on the parks and recreation staff? Do they hold the rights to lucrative concessions such as cart rentals, the driving range or pro shop merchandise? Often times the concessions offered to the golf professional are above and beyond what is normally included in a typical compensation package. Don't make the mistake of relinquishing your most valuable concessions because you don't want the responsibility of maintaining what is actually a low-overhead, high-return concession.

Increase customer service

Once you have determined which management system is best for your course, and which concessions would be best in the hands of private contractors, emphasize increasing the efficiency of the departments that will remain under your control. Your facility can most likely be improved by a good dose of market research and internal review. The best way to accomplish this is by objectively evaluating your local competition. What are the other local clubs (both privately-owned, public courses and country clubs) doing to improve their facilities while attracting the more discriminating golfer? In most cases they have a small, professional shop and maintenance staff that is very efficient and customer oriented. Examine their systems and apply what works for them into your organization. Increase the customer service training to every new and current member of your staff, from the golf shop personnel to the greens mower. Become a customer-driven organization that is dedicated to offering the best golf value possible for your patrons.

Tee Times and Pace of Play

Tee time systems are critical to customer service and should be frequently examined. How difficult is it to get a tee time at your course, and more importantly, is the system fair? A potential customer's first impression is important in any business and often that first impression comes at the moment when he or she tries to obtain a tee time. This is especially critical at a popular and crowded course. Many facilities have contracted with 24-hour computerized/phone reservation systems that, while being quite impersonal, can actually be the fairest and most efficient way of distributing times,

Successful courses must also make sure to closely monitor the pace of play. Slow play has become one of the biggest detractors to the game, and as golf has gotten more popular and courses more crowded, play has become even more excruciatingly slow. Keeping the course well supervised, with adjusted tee time intervals during the critical weekend morning hours will keep up both the pace of play and the enjoyment of your patrons.

As more and more beginners take up the game, the need to provide the basics in sportsmanship and etiquette has become even more important. Have your staff develop and conduct clinics for beginning golfers or design brochures or pamphlets highlighting the basics in rules, etiquette and sportsmanship. Distribute them at or near the point of purchase for greens fees. Something as simple as proper etiquette go a long way in providing for a smoothly run course that is in better condition. Slower playing groups that allow faster groups to play through, as well as golfers that replace divots, rake traps, and repair ball marks illustrate the necessity of proper etiquette that comes through education.

Developing or augmenting existing junior golf and lesson programs is another important step to increasing your facilityis profitability. Providing a forum for kids and beginning golfers only serves to further promote golf while showcasing your facility's amenities. There is a strong possibility that these beginners and junior players will make up the core of your valued repeat customers in the future.

After implementing service improvement changes, it is wise to periodically evaluate your efforts. This can only be accomplished by soliciting feedback from your patrons. An easy and beneficial way to collect feedback is through comment cards or customer surveys. A simple comment card placed at the point of purchase, or available near the 18th green or grill room, can provide valuable information concerning your facility's performance. Linking these cards with a value-added promotion special such as a free beverage or discount meal coupon will raise response while promoting your post-round food and beverage facility. Use this information to critically judge your performance. Make sure to provide a name and address section on the card so that you can also create a customer database. This database can be a valuable promotional (direct mail advertising) tool to announce new rates or merchandise specials especially during off-peak periods. Again it is important to treat your facility as a private sector, profit-driven enterprise. Promote and advertise.

Finally don't sell your facility short. Conduct market research of the surrounding facilities and determine the market rate for golf in your area. If a successful privately-operated, daily fee public course is offering golf similar in quality to your facility at two to three times the rates, you may be underpricing your golf. Keep your prices fair and reasonable for the quality of course conditioning, amenities and service you provide and you will probably get little by way of negative comments.

Stay competitive

One of the most frequent reasons a golf course falls into disfavor, and a subsequent operational deficit, is a failure to stay competitive. Golfers can be extremely discriminating and they expect a reasonable return for their dollar. Keep your course in the best condition possible, especially the greens. Don't postpone needed capital improvements in course conditioning (greens, tees, bunkers), the clubhouse or practice facility. Finally one of the biggest challenges...once you have transformed your golf operation into a money maker...try to keep as much golf-generated revenue on site as possible.

As the numbers indicate, there is a nearly insatiable demand for publicly accessible golf. Each year 300-400 new courses are being built to help meet this demand. Most of these courses are developed for the Public golfer, however, there still continues to be a shortage of reasonably priced, quality golf courses especially, in urban areas. Is your municipal course filling this void?

Unfortunately, many, communities have yet to turn the popularity of golf to their advantage. There are still many poorly managed municipal facilities that are barely covering their operational costs or are, in many cases, losing money for the local taxpayers. Many of these courses, despite their often minimal playing fees, cannot attract repeat customers due to their poor conditioning or lack of amenities (i.e. practice area or pro shop). Even courses that are moderately successful can take steps to maximize their potential and become large revenue generators. These facilities are often losing out because of a failure to compete with the newest courses in the area. In most situations, steps can be taken to improve existing problems through the implementation of the correct management system. With the correct system and a dedication to customer service, you can drive for the green and bring your course up to par.

Bethpage: America's Golf Mecca

Bethpage State Park, located about 30 minutes east of New York City, is one of the best known and most highly regarded golf facilities in the United States. Located in the suburban community of Farmingdale on Long Island, Bethpage contains five contiguous 18-hole courses which host a combined average of over 300,000 rounds of golf annually. The park, which occupies a total of 1,475 acres is managed by the New York State Department Parks, Recreation and Historic Preservation.

Bethpage, which first opened in 1935, boasts three courses (the Red, Blue and Black) which were designed by one of golf's greatest course architects, A.W. Tillinghast. In building his three courses, and revising an existing fourth, Tillinghast employed over 2,000 workers as part of a Works Project Administration relief effort during the height of the Great Depression.

Each of Bethpage's five golf courses offer a different degree of variety and challenge in beautiful parkland surroundings, however it is the famed and feared Black that is regarded as one of America's greatest courses, public or private.

Bethpage Black, which plays to a part of 71 and measures a total of 7,065 yards from the championship tees is one of the most difficult courses to be found anywhere. In addition to the heavily undulating fairways lined with brutal rough, Tillinghast, on many holes constructed colossal, sprawling bunkers that require golfers to carry shots as far as 150-200 yards across to reach the safety of the fairway.

Due to its popularity, length, difficulty, and mandatory walking policy, the Black has a problematic pace of play problem. So difficult is Bethpage, that the park has placed warning signs similar to that of an amusement park thrill ride near the first tee. However, those warning signs do little to deter a die-hard group of loyalists who frequently spend Friday and Saturday nights in the summer months camping out overnight in the parking lot for one of the coveted first come, first serve early weekend tee times.

Based on its pedigree, popularity and reputation, Bethpage Black is held in high esteem, even when compared to America's most elite country club courses. A national golf magazine's recent ranking of America's top 100 courses placed the Black at number 51, one of the only true municipals ever to be included in such a list. Based on these factors, its not surprising that the Black is currently under strong consideration by the United States Golf Association as a venue for a U.S. Open championship. Should Bethpage get a U.S. Open, it would be the first "true" public course to host what many consider to be golf's most prestigious event.

In addition to the world class golf available at Bethpage, the park also boasts amenities that non golfers can enjoy. Clay and all-weather tennis courts, polo fields, picnic areas, bicyling, horseback and nature trails and a full-service clubhouse and outdoor patio restaurant, known as the "91st Hole," make Bethpage a unique facility with something for everyone. However, for the hundreds of thousands of golfers who visit Bethpage annually, it is truly "Golf's Municipal Mecca."

COPYRIGHT 1996 National Recreation and Park Association
COPYRIGHT 2004 Gale Group