Digital Disillusion: Third party booking sites pose dilemma for local golf courses
It happened with hotels, airline travel and even restaurants. Now it is happening with golf courses. Consumers are discovering that booking tee times, especially at courses close to home, is getting easier, cheaper and more convenient online, sometimes finding deals that are downright ridiculous.
Third-party tee time sellers such as GolfNow.com and TeeOff.com, which tiptoed onto the scene almost a decade ago, have become such a dominating presence in the world of public golf — GolfNow booked nearly 15 million rounds in 2014 — they have changed the way a large percentage of core golfers book rounds and how much they are willing to pay.
Not only can they book tee times at night, when golf shops are closed, but they also search for courses offering the best prices, sometimes as low as $9 to $15. It was a win-win for all involved.
Budget-conscious golfers would be inclined to play more because of lower costs and perhaps even frequent different courses. And course owners liked the marketing and awareness they received from the sites and the idea players might snatch off-peak tee times that otherwise would go unused.
The third-party sellers were hailed as revolutionaries and welcomed as warmly as a kick-in birdie.
“They do have a tremendous following and a tremendous database of golfers that looks for deals or bargains,” said Olde Stonewall head professional Sean Swidzinski. “Even if someone doesn’t book through them, they have a lot of out-of-town people who noticed your place because you’re on there.”
Mike Reimer, a North Hills insurance salesman, began using GolfNow for that very reason when he purchased Pheasant Ridge Golf Course in Gibsonia three years ago.
“As a brand new owner/ operator I just decided that being on their market place and having our name in front of thousands of golfers in Western Pennsylvania can’t be a bad thing,” Reimer said. “That’s the reason I got on board — to book tee times at the golf course. They did a great job. They do a great job.”
Olde Stonewall, generally regarded as the best daily-fee facility in Western Pennsylvania with its $150 greens fee, used GolfNow for several years, giving the online service several tee times it could discount and keep 100 percent of the fees. But, while golfers seeking to play the Michael Hurdzan-designed layout could now do so at a much more affordable rate, Olde Stonewall quickly found itself in the ticklish position of explaining the reduced rate, even for just a couple tee times, to its regular customers.
That’s when Swidzinski decided to stop using GolfNow. But he is not alone.
Course owners have become increasingly concerned about third-party sellers, fearful they are losing control of their tee sheet and worried about price integrity with loyal customers who are paying the “rack rate” for their tee times. According to a recent study by the National Golf Foundation, those factors are causing consternation among course owners and operators who are trying to strike a balance between increasing rounds played and angering regular customers who pay a full rate.
What’s more, because golfers find such low rates with third-party sellers, the golf courses that are offering those low rates are basically competing with themselves and losing potential revenue, as much as $40,000 annually in some instances.
“If you had golf operators that would do absolutely nothing to help build their brand and could have someone else do it, that’s a positive,” said Tom Robshaw, whose Oakmont-based company, Club Prophet Systems, designs golf management software for 1,600 courses in 16 countries. Among the items the software provides is tee time and online reservations, allowing courses to use their service without having to use a third-party seller.
“But I can’t see many positives from a business-owner’s perspective where the very solution you’ve chosen [to build your brand] you’re now competing against. You have enough competition out there that you don’t need a virtual one.”
The travel industry — hotels and airlines — had similar issues when third-party inventory sellers such as Expedia and Travelocity came on the scene. Eventually, the two sides came to a collaborative agreement: Peak travel times would be reserved for customers who are not price-conscious. Less attractive times that were slow to sale would be reduced for discount seekers.
That has yet to happen in the golf industry.
Unlike the travel industry, golfers seeking tee times have not flocked to third-party sellers as much as people think. In a recent study, the NGF said only 15 percent of all golfers use services such as GolfNow to book tee times. Part of that is because of the number of older or retired people who play golf. That is not the same demographic that is likely to book travel using their tablets or smart phones.
However, the study also found that 81 percent of core golfers — those who play eight or more times a year — have used a third-party reseller so they can view multiple courses at the same time, 76 percent because they were searching for lower prices. That, of course, is the intent of the third-party seller.
The benefit for course operators, according to the survey, was 41 percent of core golfers said the services gave them access to courses they would otherwise not have played. And 48 percent used third-party resellers when away from home.
So is it really driving business to the golf course at the expense of lost revenue, compromised price integrity and the inability to sell those traded tee times at the rack rate? Is the awareness really worth it?
“Price integrity is everything,” Swidzinski said. “I’m up front with everyone, whether it’s an event or a member or someone off the street. We don’t negotiate prices. Maintaining value and knowing there are no deals to discount is the only way to have integrity.”
Part of the concern among course owners is how low is too low to pay for a tee time?
According to a story in Golfweek magazine, a man in San Diego who booked 466 tee times with GolfNow in 2015 (not all for him) paid only $3.76 for an 18-hole round at nearby Carmel Mountain Ranch Country Club.
Locally, it’s not much different. On April 1, when the temperature was 65 degrees, golfers could go on GolfNow.com and get a tee time at Pittsburgh National Golf Club in Gibsonia, one of the better public courses in Western Pennsylvania, for $17 (cart included) beginning at 2:42 p.m. That price dropped to $14 for 18 holes (cart included) at 3:46 p.m. The weekday rate for a golfer who walked up and paid his greens fee in the pro shop is $38, no matter what time of day.
On that same date, golfers could book on GolfNow.com and get 18 holes with cart for under $20 at Grand View ($15) and Suncrest ($17), starting after 2:30 p.m. Pheasant Ridge, which charges $39 weekdays, $49 weekends, has been on GolfNow for as low as $15. Birdsfoot owner Travis Lindsay, who charges $59 every day to play his upscale 18-hole layout in Freeport, cringed when he saw GolfNow offer one of his bartered tee times for $15.
If more courses in Western Pennsylvania have rates as low as $15 on GolfNow, the fear is those discounts will lower the overall rate courses in the region can charge. In Charleston, S.C., several course owners banded together and agreed to drop GolfNow for that reason.
And it’s among the reasons Reimer decided to end his relationship with GolfNow this year.
“When you start seeing Pheasant Ridge for $14 to $18, it hurts our brand, it hurts our image,” Reimer said. “If we were going to a destination and we didn’t know the golf courses and we saw a course for $18 with cart, we wouldn’t play the golf course.”
If you don’t care when or where you play, and you wait long enough, golfers can find deals that make Black Friday blockbusters look pricey. But that creates a scenario where those off-peak times, and prices, now become in demand for the consumer who will wait for the bargain.
Good for the price-conscious golfer, bad for the course owner.
“When you go low enough, if you’re putting your greens fee out there one-third of its normal value, the perception is, one, there’s a problem, or, two, you’re struggling to attract business,” Swidzinski said. “But, three, the biggest thing is, if you have a low rate out there, eventually that becomes your rate. I’d rather look to raise our rate than lower our rate.”
Olde Stonewall, though, is a different animal from other courses in Western Pennsylvania. Because of the demand to play there, the course has never lowered its rate since the fee went up to $150 in 2008. And rounds keep escalating, not declining. Last year, Olde Stonewall did more than 16,000 rounds, its best season, Swidzinski said.
But, with the industry caught in a downward spiral that has seen courses close and rounds played dwindle, owners and operators have to find ways to attract players — new and old — to their facilities. Services such as TeeOff.com, which is sponsored by the PGA Tour and has booked more than 500,000 tee times at 3,000 courses nationwide, give them a way to do that.
“My feeling is that the industry is moving, very cooperatively, in the right direction,” Peter Hill, CEO of Billy Casper Golf, said in a recent Wall Street Journal article. “The third-party resellers are adjusting to reality. Nobody wants to drive prices so low they are unsustainable. That’s like eating your young.”
For several years, Lindsay said he gave up two tee times a day to GolfNow.com — that’s eight players at $59 each — in exchange for free national marketing, use of the company’s software and the possibility that new customers, looking for a deal, would visit his course.
But the question remains: Did the service actually drive new customers to his course — Birdsfoot did more rounds last year (33,842) than at any point since the Ault & Clark-designed layout opened in 2002 — or just convince current ones to wait for a blockbuster deal that was sometimes half the going rate?
For example, last year, during a rainy month of March, Birdsfoot did only 84 rounds despite having pricing for two foursomes each day drastically lowered by GolfNow.com.
This year, without using the online service, Birdsfoot did 1,463 rounds in March because the weather was much better and significantly warmer. So what dictates the increase — lower pricing or favorable weather? That’s why Lindsay is considering not renewing his two-year commitment this year.
“The biggest issue is you need to protect your tee times and the third-party seller is not allowing that,” Lindsay said. “They’re essentially saying they’re going to set the rate and they can charge any amount. Soon as they do that, you’ve got a problem. Anytime you’re dealing with a third party and you’re losing control of your pricing, then you need to start really looking closely at what you’re doing because they’re holding the cards.”
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