How often do you worry about filling whitespace on your tee sheet?
As a golf course operator, filling your tee sheet is the first order of business, every day. You want to sell as much as possible to meet your revenue goals.
That’s why many operators spend time managing their tee sheets and adjusting prices to move unsold times. Like throwing in a free hotdog with that 11am on Tuesday.
However, just discounting unpopular hours doesn’t move the needle for your overall revenue. Instead, you want to focus on raising prices on your busiest hours, like Saturday at 8am, because they have the biggest impact on your bottom line.
We call this the 50/20 Rule, and it’s the key to unlocking additional revenue for your course.
The 50/20 rule of tee times
You know you have times that fill up fast, and other times that often go unsold. This is the basis of the 50/20 Rule: 50% of your total green fee revenue comes from 20% of your tee times. These are your Power Hours: tee times with the highest demand. You can charge more for them because the demand to play golf at that time can be higher than your capacity.
Many operators worry that raising prices will cause their customers to choose another course. But this isn’t true, especially during your most popular hours. Raising prices on these high demand hours is the fastest way to increase your revenue.
And yet, data shows that most golf courses are under-pricing their Power Hours by 15% or more, which leaves thousands of dollars on the table.
The flipside of the 50/20 Rule is that 80% of your tee times account for 50% of your revenue. Your 3pm on Tuesday doesn’t have the same value to your business as your 8am on Saturday.
So, instead of spending time trying to fill unpopular, low value tee times, you should focus on raising prices on your hours that have the highest demand.
Know the true demand of your hours
It’s Wednesday morning. You pull up Saturday’s tee sheet and see that you’re booked solid from sun up until 12pm. It’s a good feeling to be booked up in advance (and one less thing to worry about for the rest of the week).
But if you’ve sold out your Saturday by Wednesday, that means you’ve left money on the table. Because there are more golfers who want to play on Saturday but don’t try to book until Thursday, Friday or even last minute on Saturday morning!
Selling out early is a sign that the tee time has high demand, and you can raise your prices. If you raise the prices of your best hours by just 10%, the 50/20 Rule proves it will have a powerful impact on half of your overall revenue.
How to “Demand Track” your best hour
Want to get a feel for the 50/20 Rule in your business? Try this simple experiment we call “Demand Tracking” — watching a popular hour to see how fast it books up.
Choose one of your best hours, like 9am on Saturday. When the booking window opens for that time, keep a daily watch on that hour to see how it sells. Check it on Sunday, Monday, Tuesday, etc. Note when that 9am sells out in advance.
If you’re sold out 3-5 days in advance, that signals you have the demand to increase your prices. Next week, increase your price for that time by 10% — when it sells out, you will have increased your revenue for the same amount of rounds.
Strategically sell your less popular times
Understanding patterns of demand for your tee times can help you sell less popular times more effectively, too. The key is to be proactive with your strategy.
For example, dropping your price a few bucks to fill tomorrow afternoon isn’t going to drive numbers. There’s not enough time to promote it and a small discount isn’t big enough to create new demand. It’s too little, too late.
Any special you run should have meaningful value and be consistent, so your customers get used to it. Run a utilization report from your tee sheet and find the patterns of when you’re least busy and demand is low.
Say you find that Tuesday afternoons are typically slow. You could offer a special for Tuesday afternoons, like “Taco Tuesday”, and make it a weekly deal that customers come to expect. This could help you drive numbers during less busy times, without requiring you to spend time manually adjusting prices.
You have the power to raise prices
Whether you feel comfortable about raising your prices or not, it’s important to know that you have the power to do so. Too many operators price their tee times like a commodity, when this just isn’t true.
Your course is special for many reasons, including its geographic location and unique course features. Customers are more loyal to your course than you may think — it’s not always about getting the lowest price. Exercising the 50/20 Rule will help you see when you have the power to unlock additional revenue so your business can thrive.
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Check out our 2021 ForeUP Virtual Summit session on dynamic pricing and how we do it better with TruDemand Technology and demand forecasting.
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