Non-Golf Revenue

 As seen in Golf Business May/June 2021 

By David Gould:

The industrial giant Samsung opened for business in 1938 selling fruit and dried fish, eventually branching into textiles, insurance, securities and electronics. Its CEO once said that Samsung’s future “hinges on new businesses, new products and new technologies, therefore we should make our culture open, flexible and innovative.”

A public golf facility in the U.S. has something in common with Korea’s largest multinational, in the sense that thinking unconventionally offers a stronger chance of finding new ways to make money. 

The Meadows Golf Club, in the short-season town of Litchfield, Maine, was purchased four years ago by business people with zero golf-industry experience, which left them incapable of doing things by the book. And that, according to lead partner Randall Anderson, guaranteed they would avoid thinking conventionally.

“We started with the idea we were an entertainment destination that happens to be a golf course,” says Anderson. “The facility we purchased was quiet. It needed bodies in the door, or it couldn’t succeed.” In a nation with a golf participation rate of 9.5 percent, the interaction most consumers have with most courses consists of driving past them. Making a promise to that other 90.5 percent of “fun, food and friends at all times,” the new ownership of The Meadows built a tavern business in which most of the spending comes from non-golfers. 

Twelve months a year the locals stream in for gourmet pub food (including barbecue from an on-site smoker), Trivia Tuesdays, comedy nights, pig roasts and fireworks enjoyed from a newly built viewing deck. The tavern clientele even has its own logo merchandise—hoodies, sweatshirts, mugs and tee-shirts that feature a yellow lab (Anderson’s pet) named Doolin, which is both the dog’s name and the name of an iconic village in the far west of Ireland.

The wisdom in how Anderson and his partner market The Meadows partly involves that spouse-influenced golf budget so many married golfers have long endured. In that scenario, the golfer comes on property, spends $45 to play 18, wants to hang around for enjoyment, but faces limits on his disposable income. Not so for Anderson’s non-golfers who flock to what for them is a neighborhood hang. Their entertainment budget for the night or the weekend hasn’t taken any kind of hit before they order that first beverage.

Golfers at his facility still enjoy their sport and its traditions, but it all gets enlivened by tournaments in the snow and other golf-like activities that everyone can enjoy. “We’ve got it so the golf crowd and the non-golf crowd mix perfectly well,” says Anderson. His sense of his market is that golf has an inclination toward exclusivity that extends all the way from the snobbiest private clubs down to the scruffiest muni. “If we catered to that insider-outsider tendency in any way, we’d have no shot at the success we’ve achieved,” says Anderson, whose group is doing seven-figure revenue, servicing their note, making a living and having as much fun as the customers. “When we get a call asking about dress code, we tell the person, ‘just make sure you cover your privates.’ ” 

It’s possible to be a little outrageous and still serve the golf audience, as long as you program properly to that segment. The Meadows goes in big for golf hardgoods, basically by choosing one vendor that seems to fit best—that’s Callaway—and at one point last season generating $19,000 in retail club sales off a one-day fitting marathon by Callaway’s clubfitter, assisted by the on-staff Meadows instructor. “In the state of Maine, our Callaway business volume for 2020 was No. 2 behind Dick’s Sporting Goods,” Anderson reports. “Not bad for a little daily-fee doing 20,000 rounds.”

Revenue streams that come from sporting activity other than traditional golf aren’t strictly new, but there seems to be new levels of energy in a variant like disc golf. This year at daily-fee Wildhorse Golf Club they’ll be hosting a Las Vegas Challenge Tournament that puts the frisbee version of the royal and ancient game center-stage. Wildhorse has two separate disc golf routings laid out for play, one in the early morning and one for the late afternoon. Green fee is $10 per player, which includes a golf cart. Jon Waddington, the facility’s general manager, even won the Southwest PGA Merchandiser of the Year Award for public facilities in part because of an extensive and brisk-selling disc golf department, featuring not just equipment but specialized apparel.

Among potential dollar-generators for a public course, one that may be overlooked is sponsorship and advertising. Space on your scorecard, benches, tee signs, pavilion scoreboard, or even ads behind plexiglass frames in your restrooms, come under this category. The other natural venue for advertising at a golf facility is the golf cart, whether in the form of physical signage or as on-screen promotions using the GPS software. 

If you think it’s a decent fit with your operating philosophy and your brand, you could fairly easily go into the cigar retailing business. The overlap between golfers and cigar smokers is well-known and considerable, which is why it came as little surprise when Cigar Aficionado magazine reported 5,000-per-year unit sales of higher-end cigars at Grayhawk, the renowned 36-hole daily fee complex in Scottsdale, Arizona. Just on a rough estimate, that sounds like $60,000 in revenue, which is nothing to cough at. Apply the consensus gross margin on premium cigars, which is 34.5 percent, and it comes out to about a $20,000 net return.

The golf angle has such appeal to the cigar industry that several distributors have set up dedicated wholesale programs just to serve golf facilities, including some firms that have allowed their product to be stocked 100 percent on consignment. The Minneapolis-based CertiFresh Cigar company began a golf-specific marketing initiative 20-plus years ago and made it fly partly through a patented humidification device that guarantees ideal freshness as long as the packaging stays intact and the cigar is sold in a certain length of time.

A golf facility with a food-and-beverage operation can still branch into a new line of business if it moves beyond 19th Hole conformity and swings for the fences with a specialty like “foodie” pizza or barbecue. Within the Lakewood Ranch development in Bradenton, Florida, one of the multiple golf venues, Legacy Golf Club, has gone gourmet all the way with pizza. Its pizza maestro, Danny Barbos, is a Northern Italy native who competed at the top echelons of the New York City pizza market before moving to Florida. His crusts are slow-proofed for 24 hours and the pies are baked in a wood-fired Marana Forni pizza oven at 700 degrees. Legacy Golf Club’s website home page—yes, the page you land on first—promotes pizza as basically its lead product. Indeed, that is branching out.

It’s likewise at places like Sligo Creek Golf Course in Silver Spring, Maryland, where what had been a simple snack bar was reimagined as Sligo Pit BBQ, serving barbecue daily to golfers and local residents alike. An eBay-purchased meat smoker with an interesting back story and a colorful name—“Old Smoky”—went into service and quickly launched a new revenue line for the course.

There’s an even bigger twist on golf F&B to be found in Mechanicville, New York at Halfmoon Golf Club. It’s the taproom and brewery of three-year-old Hank Hudson Brewing Company, built adjacent to the clubhouse and first tee. Patrons come from far and wide, with and without golf clubs, to sample a wide selection of local and in-house beers from barstools that are just steps away from the brewery’s own stainless-steel fermenters. Without moving from your seat you can study up-close the craft beer-making process, simultaneously savoring the fine fairway views of the Halfmoon course through floor-to-ceiling windows.

The subject here is revenue that comes from something other than rounds of golf, but let’s permit one possible exception to that, what you might call “immediately profitable player development.” The idea is taking hold in a few corners of the industry, but North Carolina-based Operation 36 is without doubt the most determined and aggressive promoter of the concept.

“Golf is always in need of new players and for decades our industry has been designing introductory programs to attract them,” explains Matt Reagan, co-founder of Operation 36. “Determining the success of these programs has meant waiting for half a season or a full season, to see if some of the participants may end up on your tee sheet. To us that approach isn’t productive.” 

Reagan and his business partner, Ryan Dailey, don’t use the phrase “grow the game of golf.” Instead they say, “grow rounds of golf.” They’re working beyond the typical golf-indoctrination program, which merely tries to teach a raw beginner basic golf skills. “Operation 36 teaches golf skills to the newcomer, but we are also teaching and training them to purchase rounds of golf and pay the green fee—and we’re engaged in that training from the very beginning.” 

For those unfamiliar with Op36 and its learning model, it’s based on being on-course almost immediately and it builds on the reality that any golfer can par any hole if you start them close enough to the cup. From this magic-bullet insight has come a complete coaching and player-development matrix of services, materials and training. The first starting point is on the green, with a par of 4 to hole out. From there it’s back to a highway cone at 25 yards, then a cone at 50 yards, and so on until you are playing from a regulation tee. You’re brand-new, but you’re on-course right away, and you’re paying for the privilege—at the same time you’re playing each hole quickly. 

Again, for how shrewd and data-driven the Operation 36 model has become, it’s only the tip of the spear in a movement to “operationally monetize golf instruction,” as Proponent Group founder Lorin Anderson chooses to phrase it. In his 14 years at the helm of a company that serves the dedicated, full-time golf instructor, Anderson has watched launch monitors, ground-force plates, 3D video and other “teaching tech” deliver excitement and golfer-engagement to the teaching end of the golf industry. 

He’s aware that course operators feel there's little spillover from all this upbeat activity at a corner of the range to the basic revenue-maker—green-fee selling. “There’s actually far more business value from instruction than the industry has equipped itself to measure and track,” Anderson says. "At the same time, there’s a lot more that can be done to make the buzz that’s happening in teaching and coaching add fuel to the core business. Golf operators will discover to their satisfaction that player development is on its way from being a cost center to being a profit center."

Boosting revenue through new products or new lines of business brings us to an intriguing recent innovation—going dog-friendly. Courses that have started allowing dogs (obedient ones) say it’s good for business, albeit just in the sense that dog-owning golfers with a choice among courses select the one where his or her pet is welcome.

“It’s a money-maker because we get chosen over courses where dogs aren’t welcome,” says Henry Fletes, a staff member at Emerald Isle Golf Course in Oceanside, California. “We don’t charge anything extra if you bring your dog. In fact we give away free treats to the pups.” 

All well and good, but there’s got to be money in this, beyond just the green fee.

Perhaps it’s time to set up a grooming business in the back corner of the clubhouse. We’re talking about a dedicated place for the pooch to be profitably clipped, at a pretty penny the golf facility takes 40 percent of. Meanwhile his owner is enjoying a gourmet pizza, craft beer and a good cigar on the deck, with fireworks lighting the sky.