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Golf-Based Resorts: Managing the Operation

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1Chapter 7 Golf-Based Resorts: Managing 10financial problems faced by golf-based
the Operation. resorts. Tournaments and Events Business
2Identify the changing trends in and Golf Customer Appreciation Events
demographic profiles of the golf market. Sales/Product Launches Employee Outings
Industry Trends: Golf industry leaders are Fund-Raising events.
concerned that the number of future 11Solutions to Financial Problems
golfers will decline Issues most likely to (cont.). Hole in One Contest Companies
impact business: Number of rounds Player organize the activity for the resort and
retention. provide the prizes While many think it is
3Changing Trends (cont.). Industry virtually impossible to achieve a hole in
Trends (cont.) Water management is the one, in any given year in the U.S., there
major environmental issue facing the are over 40,000 holes in one.
industry Many courses are utilizing water 12Solutions to Financial Problems
conservative technology Changing (cont.). Women-Friendly Women friendly
Demographics There are seven segments of courses can: Vary tee locations to allow
golfers: core, seniors, women, juniors, the option of playing a harder or easier
highly skilled players, private club course Feature holes in the 5,600 to 5,700
members, and high spending golfing yard range Provide holes where players do
households. not have to carry the ball over a lot of
4Changing Trends (cont.). Changing obstacles Where greens can be easily
Demographics (cont.) In 2002, 11 million reached Where forward tees are closer to
golfers took an overnight trip that the hole and allow for a better angle at
included golf There are more than three the green.
times more male golfers than there are 13Solutions to Financial Problems
female golfers. (cont.). Banquets Can be an excellent way
5Changing Trends (cont.). Changing to bring in additional revenue Golf
Demographics (cont.) The profile of the tournaments are a good market to advertise
average golfer is: Male Around the age of to Pre-game lunches, box lunches, post
50 College graduate Household income game dinners, or cocktail parties have
between $100,000 and $149,999 Plays about proven successful Social events are the
60 rounds per year and has been playing most financially profitable segments,
for roughly 22 years Average score of 88.4 including weddings, bar mitzvahs and
Male golfers spend slightly more than anniversaries.
female golfers on golfing. 14Solutions to Financial Problems
6Identify the critical variables in (cont.). Pro Shops Margin Enhancers
determining a golf-based resort’s profit include discounts, rebates, fitting fees,
potential. Operations The Sun Belt covers advertising co-ops, freight programs, or
the southern states and part of the free product accounts Accessories The key
coastal region These courses are likely to to increasing sales is in the presentation
be open year-round The Frost Belt consists of items Keep displays neat, use color
of northern states and the mountainous effectively, develop a theme, cross
parts of southern states These courses merchandise, and avoid one level displays.
usually shut down for a while during 15Solutions to Financial Problems
winter. (cont.). Inventory Control Controlling
7Profit Potential (cont.). Income inventory can cut down costs “Open-to-buy”
Statement In 1999 U.S. golf resorts refers to the amount of retail dollars set
reported an average operating median of: aside for the purchase of merchandise in
28.9% for Frost Belt resorts 25.3% for Sun the future Old sales figures are used to
Belt resorts. project future sales Merchandise group
8Profit Potential (cont.). Revenues departments are created.
Most revenue comes from annual fees and 16Solutions to Financial Problems
green fees The second most important (cont.). Inventory Control (cont.) To
source of revenue is from golf cart maintain control of the system the two
rentals Expenses The greatest expense is important pieces used to determine
the cost of merchandise sold, followed by beginning inventory levels are projected
the cost of food and beverages Payroll is sales volume and the turnover rate desired
usually the largest expense category. by the shop Credit Cards Accepting credit
9Profit Potential (cont.). Staffing Sun cards makes the purchase easier for the
Belt resorts staff their facilities with customer Retailers pay a fee to credit
29 part-time and 34 full-time staff Frost card companies when they accept credit
Belt resorts staff their facilities with cards.
60 part-time and 43 full-time staff. 17The End!
10Identify potential solutions to
Golf-Based Resorts: Managing the Operation.ppt
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Golf-Based Resorts: Managing the Operation

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