Green Fees vs. Membership - Break even Point?

Is there an industry standard for pricing unlimited golf memberships versus the green fees for non-members? I assume this is regionally dependent (length of season). In your area, what is the break even point for your membership, i.e., if the course is public, how many rounds do you have to play (excluding other benefits) to make your membership "worth it"? At my club in the mid-Atlantic region, it would take 37 weekend rounds (most expensive rate) to break even for my membership.

As a related question, is there an industry standard or typical relationship of the 9-hole green fee to the 18-hole green fee. 50%? 70%?

The math will NEVER work so don't hurt yourself trying to figure it out. :-)

My annual pass runs $2000, plus taxes. In addition to greens fees it includes unlimited range balls, plus 20% off in the pro shop, which I mostly use on balls and gloves. When I plan out my break even point, I use the cheapest rate (40$/round at weekday twilight) to figure I need to play 50 times a season to make it worth it. Going at more expensive times or figuring in the other perks is just gravy.

The 50 rounds is important in my mind so I can tell my wife "I have to play 10 times this month to not lose money".

My membership is 800.00. The cost for a normal round during the week is 38.00. I play 2-3 times a week. I'll be way ahead of the game by the end of the season. I've played 10 times already and the season is just getting started here in Minnesota.

Pure math.....about 60 rounds. The intangibles and friendships that come with the membership are well worth it.

Paying weekend summer rates for the main course i'd get my money back in 22 rounds. Free range balls / practice academy use and i go around the 9 hole course after work very often.

It's not cheap but it's a no brainer. Would take a huge dip in quality to be able to afford not being a member.

Agreed, but I am not trying to justify the expense. I am just curious about the pricing strategy decision. To set a membership price, there has to be some thought into how the per round rate stacks up against the unlimited golf rate. Is it roughly 30 times the weekend rate at most courses? A private course is a different deal, since the membership is the price for access, but at a public or semi-private course, you are trying to get the a la carte golfer to commit to a membership.

[quote name='HackerDave' timestamp='1431265469' post='11531556']
The math will NEVER work so don't hurt yourself trying to figure it out. :-)
[/quote]

11 peak rounds would put me at break even. 9 hole rate is 60% of 18 hole rate.

At Pinehurst the monthly fee for full golf membership is less than the peak walk-on rate at #2. So some would say one round per month (this doesn't account for initiation fees or the requirement to own property in Pinehurst).

I need 45 rounds.

I have 11 already so I don't see this as a problem.

At my local muni courses, if you buy the season pass you are ahead of the game after 30-40 rounds depending on when you play. If you compare publics to privates where I live, you'd need to play 200+ rounds per year at the private to be ahead of what you'd pay if paying per-round at the publics. Plenty of affordable public golf but the privates are expensive, and a bit overpriced for the area.

What do you people do that you get to play 50 rounds a year? Between work and wife, I'm lucky if I get to play half that number!

[quote name='Fade to Black' timestamp='1431341955' post='11536640']
What do you people do that you get to play 50 rounds a year? Between work and wife, I'm lucky if I get to play half that number!
[/quote]

Im a corrections officer. I work the over night shift which is 10 pm to 6 am. Im at the course by 3 pm. 18 holes and home for dinner and get ready for work. My kids are grown and have families of their own. Its just myself the wife and my shepherd sarge. Its a long cold winter here in Minnesota so when its nice im at the course. I play 2-3 times a week.

[quote name='HackerDave' timestamp='1431265469' post='11531556']
The math will NEVER work so don't hurt yourself trying to figure it out. :-)
[/quote]

I think the OP is referring to semi-private golf. The math usually can work out for those (I know it did for me a few years back). I had to play about 30 weekend rounds for it to work out.

When it comes to a fully private country club, I agree that figuring cost per round is the wrong way to look at it as it doesn't factor in other benefits. like tennis courts, swimming pools ease of access, etc ... I know I did the math at my current county club once, and my average price per round was quite the eye opener! That said, I don't plan on going non-private again!

Agree with the poster saying to quit trying to do the math. I look at as a quality of life matter. Is the course close to you or not? Is it easy to go practice or not? Is one course more crowded than the other? Golf is just pricey. One option may or may not be less than the other so i would recommend going with what is easier on your time commitment.

i get that private is a whole different ballgame. but i'm questioning why you can't develop friendships and have fun playing a course very often and even join their league without committing to a membership at high prices. a local course thats public would require 55-65 rounds just to break even. $3200 / $55 rounds. this doesn't factor many twilight or afternoon rates are $39.

if i play that many rounds, pretty sure i'd be playing as much or more than most members and be able to meet plenty of members or make connections with other members without the 'membership'... unless their is some sort of being in the club type of attitude among members.

i've never seen the need to join a public course when the break even is so high. why not play 30 rounds at that course and be free of guilt when wanting to play another course. if i payed money to join, every time i played elsewhere would just be additional money.

in my opinion, no reason to join a public course unless the price to join is so that you'll well surpass break even. when it comes to private, i get that you'd never play that course or meet other members without the membership, so if you have money may be worth it.

My membership is $1900 for the year and includes unlimited golf, cart, and range access. My break even is 48 rounds if I use the lowest rate and 32 if I use the highest. For me what makes it worth it is convenience. My course has 27 holes so it tends to move a little quicker. Plus being unlimited I don't feel guilty if I only squeeze in less than 18 or 9 holes. The ability to play however many I can before/after work is worth it's weight in gold. Plus it's right down the road.

Just to reiterate, I am interested in the business of golf. What is the pricing decision from their perspective? Why do they do pricing the way they do? If your course is nicer, you charge more per round and for memberships, but for any course (muni, semi-private, etc.) there should be a rough equivalence between the per round rate and the unlimited golf membership (only focusing on the golf part, not any other potential amenities). The so-called break even value. Where should they set this?

Paying per round is a variable expense (the less you play, the less you pay) and buying a membership is a fixed expense. You may ignore the math on this, but for the golf course to do so is a little short-sighted. The course wants members (fixed revenue), a membership that takes 60 rounds to break even is inherently less valuable than one that takes 35 (ignoring all other amenities). In an area with competition, this should be a factor in pricing. There is a class of golfer that can easily ignore the lack of value since they will join regardless, e.g., many Golfwrx-ers, but there are many casual players that quickly dismiss memberships due to the economics of it. Is it safe to ignore this market segment? Why do we believe the business of golf is immune from the rational consumer?

Clever pricing and strategy can use the "rational" consumer to your benefit. Look at how most gym membership or outdoor pool memberships are set up. Many have fairly low annual/seasonal fees. The majority of people will get a membership with the intention of going every day and most sporadically use the facility. These paying "ghost" members are subsidizing the low rates for the frequent users. You get a steady stream of membership dues (fixed revenue for the business, cheaper per person, but more volume) with a minor increase in capacity utilization (wear and tear on the course). You do lose some exclusivity with many members, but these aren't private clubs anyway.

Sorry, that got longer than I expected. I do appreciate all the replies!

[quote name='Zeverson' timestamp='1431351347' post='11537132']
Agree with the poster saying to quit trying to do the math. I look at as a quality of life matter. Is the course close to you or not? Is it easy to go practice or not? Is one course more crowded than the other? Golf is just pricey. One option may or may not be less than the other so i would recommend going with what is easier on your time commitment.
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The course I live on does pricing so that the long time members and their buddies get great deals while the rest pay more. And the prices do not take into account how much those different groups will be able to play. Teachers get a great deal and they can play all summer long. Someone like me who is not in with the cliques will pay through the nose. And I work out of town so the course would be almost useless for me in the winter months. $3600 a year plus $1000 initiation fee and whatever assessment they stick to me because people aren't paying what they should to cover costs...easy pass for me.

[quote name='Koegel's Viennas' timestamp='1431379797' post='11540392']
Just to reiterate, I am interested in the business of golf. What is the pricing decision from their perspective? Why do they do pricing the way they do?
[/quote]

Golf course management can be interesting. I'm currently at a semi private where initiation was $8K, family monthly was $350, individual was $250, daily fee green fees were and are $65 and the course has a 7 month season since we're in the mtns at 6500 feet elevation. Club also has a nice restaurant and bar, work out center, pool, party gazebo for outside functions and weddings.

When the place was built in 92, the course was a loss leader to sell houses on the surrounding property. Buy a house get a membership with it. People in the area who did not buy a home out there would pay the initiation and monthly. From 92 to 02, there were years that the initiation jumped to $15K when demand was high. Now that all housing is built, it's about overall P&L. So the pricing for membership and monthly fees is a matter strictly of supply and demand coupled with what the market will bear.

New owners took over last year. Saw that due to the recession, play was down, everything was down. So they put in a 3 month push to increase members on a deal for no initiation fee, a 3 yr commitment to $270/month for families, $170 for individuals, and got 100 new members. New members who in their first year used the course a lot, so much that the old time members bitched up a storm when they just could not walk on to play. But it brought the people out to play and then eat in the restaurant and drink in the bar - they also made a big push for more weddings and corporate parties which also were big for the food and beverage side. And they had their best year ever from a revenue and profit standpoint. Money they spent was on upgrading the restaurant and party gazebo areas.

These days for the club it is more about using the course to try to get some contribution to revenue from daily fee play (the town here is vacation destination though not for golf with only one other muni course, not as nice of a layout ) , but for the members it is more about getting them to come out so they can eat in the restaurant and bar, which is open 12 months of the year, where they can make good money. And hustling all the corporate events + weddings they can which are good money makers.

Now that their push got them 100 new members, they now charge an initiation fee again, same monthly, and hope none of the new members stop using it. Since the course is 8 miles north of the town, most of the restaurant/bar use comes from golfers after they play, corporate & wedding events and the residents in the 300 or so homes in the housing area all around the course location who may not want to cook any particular evening. Plus those who live in the area can drink up a storm and not have to worry about a DUI/DWI because they can get home without being on any highway or busy road. And being north of town the town police have no jurisdiction and the sheriff's deputies never come around.

No pot store in the course neighborhood even tho it is legal here in CO !!! Think when I walk the dog at night I would rather have stoners driving the neighborhood streets than the drinkers!! Have seen an occasional golf cart in a ditch or against a tree at night ! Forunately no EMT squads yet.

In the end, all courses of any type are all about supply and demand and what the market will bear. Those who do well judge these things the best.

We joined a public course. Membership was $750. If i bought every round on Golfnow, rhey would be 15-20 dollars. So, our break even is about 50 rounds. We still have three months left and have played 72 rounds so far.

It helps to be retired. I am now a stock trader and we are both 58.

[quote name='butch33611' timestamp='1431287470' post='11532970']
My membership is 800.00. The cost for a normal round during the week is 38.00. I play 2-3 times a week. I'll be way ahead of the game by the end of the season. I've played 10 times already and the season is just getting started here in Minnesota.
[/quote]

Hey Butch, are you comfortable sharing where you play? Is it private? I'm always looking for a decent spot, I'm right next to TPC Twin Cities, but upon last review, the home finance director found this to be an unfavorable option...

We have a 6.5-7 month season here. Cost is $7,000 per year (which includes $500 for access to US Clubcorp tracks). I also get a free second home club North of here in the Muskoka cottage region.

I played a 75-85 rounds at my home club and 103 altogether in 2014. Guest fees are 140 CDN (116 USD). You gotta play 65 rounds to make it work (F&B is fair at 1500 per year)

Toronto golf is expensive. Not NYC expensive mind you, but still too pricey for not getting a full season. Some clubs still command a 100k entrance fee in the area

Initiation has dropped to 40k .. payable over 10 years

[quote name='Fade to Black' timestamp='1431341955' post='11536640']
What do you people do that you get to play 50 rounds a year? Between work and wife, I'm lucky if I get to play half that number!
[/quote]


Shift Work !!!

Either work early mornings or afternoons - no 9-5 available but 4 days on 4 days off

With holidays and minimum 4 days sick per year you are working very few days in reality - played 85 rounds and that is with 4 months of no golf in the winter.

So, now that we have a sample of the actual break even point where there doesn't seem to be a "standard." Should membership pricing be based on the max golfer (say, 4 rounds during the week and one on the weekend) or the average golfer (say 1 weekday round and 1 weekend round)? Isn't in the club's interest to set incentivize membership beyond the hardcore golfer?

The cost break down for the course I'm on: $3852 per year just for myself. From what I hear, they charge guests $50 per round if you are invited (never been invited once in 13 years) so that would come to 77 rounds to break even.

[quote name='Koegel's Viennas' timestamp='1431379797' post='11540392']
Just to reiterate, I am interested in the business of golf. What is the pricing decision from their perspective? Why do they do pricing the way they do? If your course is nicer, you charge more per round and for memberships, but for any course (muni, semi-private, etc.) there should be a rough equivalence between the per round rate and the unlimited golf membership (only focusing on the golf part, not any other potential amenities). The so-called break even value. Where should they set this?

Paying per round is a variable expense (the less you play, the less you pay) and buying a membership is a fixed expense. You may ignore the math on this, but for the golf course to do so is a little short-sighted. The course wants members (fixed revenue), a membership that takes 60 rounds to break even is inherently less valuable than one that takes 35 (ignoring all other amenities). In an area with competition, this should be a factor in pricing. There is a class of golfer that can easily ignore the lack of value since they will join regardless, e.g., many Golfwrx-ers, but there are many casual players that quickly dismiss memberships due to the economics of it. Is it safe to ignore this market segment? Why do we believe the business of golf is immune from the rational consumer?

Clever pricing and strategy can use the "rational" consumer to your benefit. Look at how most gym membership or outdoor pool memberships are set up. Many have fairly low annual/seasonal fees. The majority of people will get a membership with the intention of going every day and most sporadically use the facility. These paying "ghost" members are subsidizing the low rates for the frequent users. You get a steady stream of membership dues (fixed revenue for the business, cheaper per person, but more volume) with a minor increase in capacity utilization (wear and tear on the course). You do lose some exclusivity with many members, but these aren't private clubs anyway.

Sorry, that got longer than I expected. I do appreciate all the replies!

[quote name='Zeverson' timestamp='1431351347' post='11537132']
Agree with the poster saying to quit trying to do the math. I look at as a quality of life matter. Is the course close to you or not? Is it easy to go practice or not? Is one course more crowded than the other? Golf is just pricey. One option may or may not be less than the other so i would recommend going with what is easier on your time commitment.
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I think there is a LOT more going into the equation than simply how many rounds you will play. They probably have a pretty good idea of how many rounds the avg season pass owner will play. But the cost is probably more related to what the local competition offers. If there are several courses offering similar programs, you have to be cost competitive. Does this course have better practice facilities? More leagues? The more leagues, the harder to get tee times. A couple of local clubs have leagues nearly every night. No walk up golf there.

I originally confused this with private golf. We went that way long ago because the local courses were packed, the practice facilities were junk and it was just to frustrating to get out. Since that time, more courses were built so access is a tad easier now but you still can't count on just showing up. Our practice facilities are spectacular. That is important because some days you only have a hour to kill and having a great practice facility makes it an enjoyable experience.

While cost is important, it probably should not be the first thing you worry about. Paying a bit more for better facilities and access is a far better value in my opinion.

The course I'm at is semi private, full membership is ~5500 everything all in (carts, storage, no F&B mins, ect.) Mon-Thursday is $100 and friday through sunday is 135, both with carts. So that would be about 40 weekend rounds to cover it. Season is mid-late april to Canadian thanksgiving (second monday of october)

In the last two years I have been a member at two different courses. What I find interesting is that while priced about the same (within 20%) of one another it is two totally different experiences. The first, and less expensive of the two, was golf, golf and nothing but golf. It had 225-250 members. And that is what you got. Members played, tees times were available, but there was traffic. While the food was good, no one stayed and hung around. People played and left. The second has two dinning rooms -pub style where jeans are acceptable and formal dinning, an outdoor bar, patio and tables for pub fare, pool, tennis courts, workout area and 300+ golfing members. I was nervous about tee availability, but it has never been a problem. The second is a much warmer more affable atmosphere. People stay and socialize, families meet up with golfers after a round and members interact much more.

The economics of the two clubs would be night and day different from an operator point of view. The first is full, they get their rate and it had better cover the cost of running the facility because they will do minimal high margin food, drink and gear business. The second has more staff to be sure and infrastructure cost to be sure, but it is serving a lot of food, drink and gear and not living off rounds played and lessons. They also have the type club that allows for both "social" and "golfing" memberships. Obviously there is a pricing difference, but the social membership is surely helping subsidize the golf as it helps cover the infrastructure cost of the building, locker rooms etal.

Lots of ways to skin a cat.

Phred

I believe full adult membership at my place is GBP 1600 and a weekend greenfee is GBP 55 and 40 during the week. No joining fee/initiation or monthly minimums. Think the only add on is a 50 pound bar tab which you should have no trouble spending over the course of a year.