By Betsy Gilliland, Contributing Editor
What happens in Vegas doesn’t always stay in Vegas— and sometimes that’s a good thing.
When Dustin Burell, General Manager of The Quarry Golf Club in San Antonio, read an article about a Las Vegas golf course that based its tee-time prices on the airline industry’s model of the sale of available plane seats, he decided to export the plan to the Lone Star State. Six months after implementing the system at his upscale daily-fee course, Burell endorses it with no reservations.
And for good reason. While the number of golfers has remained the same (in the 36,000-40,000 annual round range), The Quarry GC has seen a 25 percent increase in the average rate per player since the beginning of the year, Burell reports, and a 21 percent increase overall. “It’s a constant supply-anddemand battle, but we watch peak times to get higher rates, without affecting player count,” he explains.
Tee times at The Quarry are set at 10-minute intervals, and the property changes the rates, which are based purely on demand, every hour on the hour. Peak hours are more expensive, while off-peak hours are less costly.
Supply-and-Demand Pricing at The Quarry GC
Rate | Total $ Possible | Utilization % | Actual $ | |
7am | $ 95 | $ 1,900 | 75% | $ 1,425 |
8am | $ 129 | $ 2,580 | 85% | $ 2,193 |
9am | $ 125 | $ 2,500 | 91% | $ 2,275 |
10am | $ 115 | $ 2,300 | 91% | $ 2,093 |
11am | $ 110 | $ 2,200 | 80% | $ 1,760 |
12pm | $ 95 | $ 1,900 | 80% | $ 1,520 |
1pm | $ 85 | $ 1,700 | 78% | $ 1,326 |
2pm | $ 67 | $ 1,340 | 65% | $ 871 |
3pm | $ 55 | $ 1,100 | 52% | $ 572 |
4pm | $ 45 | $ 900 | 35% | $ 315 |
5pm | $ 35 | $ 700 | 21% | $ 147 |
“It’s like fishing where the fish are,” Burell says.
Prices increase during prime times such as spring days and Saturday mornings. The property also lowers rates to steer golfers to less-popular time slots, such as early-morning hours during the winter, or holidays like Mother’s Day.
“We can put 20 people on the golf course every hour. I monitor it daily and hourly,” notes Burell. “The instinct is to discount prices to get people on the golf course. But we can get out of the $40 to $50 range, and the municipal courses can move into it, because they need to.”
THE GOAL: Drive traffic and increase revenue at The Quarry Golf Club by implementing a tee-time pricing system based on supply and demand.
THE PLAN: Use a pricing system that follows the airline industry model—the sooner a golfer reserves a tee time, the better the rate will be. The property, which changes its rates every hour on the hour, tries to book at least 80 percent of the available tee times every hour. Once that goal is achieved, rates for the remaining one or two tee times are increased. The property makes its tee times available 60 days in advance for individuals, and golfers only see the tee times that are open.
THE PAYOFF: Since implementing the new pricing system in January, The Quarry GC has seen a 25 percent increase in the average rate per player, and a 21 percent increase in overall revenues, while the number of golfers has remained the same.
Tee times are posted 60 days in advance for individuals, who can reserve their spots with credit cards, while corporate outings and other golf events can be booked two years ahead of time. Just as airlines price tickets based on seat availability, the golf course sets its rates based on available tee times. Burell says about 35 percent of tee times are reserved online.
“We try to book 80 percent of every hour. Once we reach that goal, we raise the rates for the remaining one or two slots,”explains Burell. “We raise the prices as we approach the day. This gets people to commit earlier, instead of waiting for a fire sale. If the demand is low, we make [the price of] that tee time lower, to sell 80 percent of tee times.”
The pricing system has boosted the golf industry in the San Antonio community as a whole, he notes.
“We’re not competing with other local golf courses, but they can raise their prices and still be lower than us. It helps the entire golf community,” adds Burell. “We’ve seen other courses slow down [their promotional] e-mails and raise prices. The bellwether golf courses in every city should move up pricing so others can, too. We need higher-end golf courses to be more demand-based. It makes the whole golf industry healthy.”
Thanks to the success of the new pricing system at The Quarry, fire sales and e-mail blasts are a thing of the past for attracting golfers to the 20-year-old course, about 80 percent of whom are tourists. And while the article on the Las Vegas course may have sparked the idea, Burell and Kyle Cole, managing partner and one of the course owners, researched two decades of historical data and tracked the schedule of event traffic in San Antonio, a top tourist destination in the country, for about six months before implementing the system in January.
Like many golf course properties nationwide, The Quarry Golf Club had struggled in recent years. According to Burell, the golf course, despite its appeal of a Keith Foster design with a back nine that dives in and out of a 100-year-old quarry pit, saw a 15 percent decrease in rounds in 2008 and 2009. The numbers did not improve in 2010.
“It’s like fishing where the fish are. The instinct is to discount prices to get people on the course. We raise the prices as we approach the day. This gets people to commit earlier, instead of waiting for a fire sale. ”
—Dustin Burell,
General Manager, The Quarry GC
“We backed off golf course maintenance, etc., to save money,” says Burell.
However, the property did an about-face in 2011, when management decided it needed to make a change to try to bring the number of rounds—and revenues—back up to par. Although The Quarry is the bellwether daily-fee facility in San Antonio, the owners realized that any changes would have to start with improving the property’s overall experience for golfers. To enhance The Quarry experience, $1.4 million was invested in the property to improve its assets and services.
Improvements to the golf course have included bunker renovations, additional rock features, the replacement of four bridges, installation of new drainage structures, new pumps to create creeks on the front nine between lakes, coverage of several acres in native areas with wildflowers, new cart paths, resodding of several fairways and adding three full-time course maintenance staff members. The property also got new course maintenance equipment, and increased its fertilizer and chemical budgets.
“We raised the bar on the golf course, and we did the same thing in the food-and-beverage and service areas,” says Burell. “We had to enhance the assets immensely to justify and succeed at the higher [average] rate.”
- The Country Club of Virginia, Richmond, Va., invested less than $200 in a studio lighting kit that’s now being used to give the merchandise in the club’s pro shop a million-dollar look. The kit, which includes energy-efficient lights, bounce umbrellas, a background and stands for setting up items, is now used to take consistently attractive photos for display on the club’s website. “The high-quality photos allow members to look online both at items they’ve seen in the shop—and items they’ve missed,” the club says.
- Cherokee Town and Country Club, Atlanta, has seen steady growth in the popularity of The Caddie Circle since it was implemented in 2008. The program, which runs from Memorial Day to Labor Day (or until funds have been depleted), lets members pay an annual fee that’s billed during the peak golf season to be able to reserve a rookie caddie for Friday, Saturday or Sunday play for an all-inclusive fee of $25. Senior caddies can also be requested for $25, but the gratuity is not included.
In addition, he reveals, “I can handle staffing differently, because I know people are coming to the golf course.”
The new tee-time pricing system also has helped The Quarry keep resellers from cutting into profit margins. “Resellers have no expense of owning or operating a golf course, and they can sell the entire country. Weather isn’t an issue for them, because it’s always sunny somewhere,” Burell explains. While some courses need to make use of reseller programs, he acknowledges, The Quarry stopped participating in all but a select few of them in the spring of 2011.
Armed with research data to support the new system, management personnel then had to decide when it felt comfortable raising the price bar. The property improvements, along with January’s closure of San Antonio’s historic Pecan Valley Golf Club, contributed to The Quarry deciding to introduce its new rate system at the start of this year.
Burell notes, “We had a fantastic November and December. We did an aggressive customer survey of people who had played in the last 90 days, and got an overwhelmingly positive response.”
The reaction has been just as positive since the new tee-time pricing system, which Burell says was implemented through the club’s existing point-of-sale program, has been in effect.
“The golfers understand we have a product that’s in demand,” he says. “[The pricing system] takes time and energy— but it’s producing results that are significant.”
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