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Bucki1968

What Determines the Cost of Golf?

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So this past week-end I went out of town for the week-end. The wife and I played a golf course that we have not played before (the one we usually play had a tournament). The course was in good shape, pace of play was good, staff was friendly. The golf course was about 6500 from the back tees (although where the tees were set up it didn't play that long). The front 9 was what I would call relatively easy. It was moderately tight off the tee and did have a lot of water. However the par 5's and the par 4's were pretty short and the water really did not come into play that much (unless you really hit a bad shot). Back 9 was longer and the water come into play a little bit more but again it wasn't what I would call difficult. All that being said, I thought the price we paid for the golf course was really not worth what I got in return. For the money spent (at least in this area) you can play a truly championship layout. This was not. Now I understand that their prices still reflect that this is "season" here in Florida so I get it. However, even though it was a nice course, I don't feel like I got my $ worth. It was, however, nice to shoot a low score and make more birdies than usual. The wife and I were talking about what the criteria for a golf course is Vs. the price. We both agreed that this course should have been about $15.00 to $20.00 less based on the amounts we have paid at various courses in the past. I'm a curious what everyone else's criteria is. 

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As with most things within a relatively free market, supply and demand drives price.

i decide what I’m willing to pay based on my personal perceived value.  Course conditions, challenge, pace of play, and price.

Edited by David in FL

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Competition, the market (min wage), ownership, the brand, and perceived value. How much people are willing to spend versus what the course offers and their competitors offer. 

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Like everything else it is supply and demand plus market.

A course will charge what it can get in the market or at least what it thinks it can. Given that course do not price discriminate or do a very good job of market segmentation the prices often do not reflect the value. In markets like Los Angeles (or any part of CA) the cost also reflects politics, government budgets and the opportunity cot of turning the course into Condos.

One other thing to consider is what the "average" golfer values. Given your index I will assume that you are a "avid" golfer. While you will play 35+ rounds a year and value things like condition, green quality, pace of play and design, most golfers do not. The views are often part of the cost as is proximity to urban centers and "playability". Let's face it most golfers feel much better about a course if they have fun, thus a course set up to the expectations and skill of the clients is often part. Finally cultural expectations are also a part. I say cultural meaning golfing culture. If the area is full of occasional muni golfers the prices will be low and expectations for condition will be low. Fast greens and heavy rough will not sell.

People don't get what they want, they get what they will pay for.

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Like others have said, supply and demand of the product dictates the pricing.

Other times, I think greedy management practices just because "it's golf" are the norm in some areas 

I don't know how many folks remember the term "gas wars", but a few years ago in our area we had "golf course wars" as far a green fees went. Golf courses were slashing prices to get more golfers on their courses. The supply of golfers was too low to keep all the courses open. 

Courses today know how much it cost them to stay open. Those costs include course maintenance, supplies, equipment, payrolls, and all the costs related to the 19th hole.

They also know how many golfers they can expect on their courses. They do the math, and come up with the prices they charge. 

Except for a few high end courses, green fee prices in our area have stabilized in the $20-$40 range for most courses. Some of those courses use to get $100-$200+/- for a round. 

My home course is one of the better maintained products available in the area. Fees are great for us. Good management has kept our fees low for the product provided. 

 

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9 hours ago, Groucho Valentine said:

Unless you want to shell out 100g for a private course membership you'll pay $50 to play a cow patch and like it! 

The OP said the course was in fine shape, so it wasn't a cow patch! As with everything else, it's whatever the market will bear.

The OP said they could have played a truly championship layout for the money they paid for this place. So, why didn't they? There's probably a good market for that course, because there are a whole lot of guys who don't play to a 2.6 HI and don't feel like getting their brains beaten out on a "championship" layout! 

 

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I have met and talked to many times the owner of one of our local golf courses. The course is one of the very few full-sized 9 hole courses around. I like it a lot because I can literally play it in 1.5 hours or sometimes less during the week. On weekends the play time balloons to around 2.25 hours, but that too is fine. I almost never make a tee time and have only maybe once or twice been turned away in the 3 years or so I've been going there. 

Anyhow, the owner told me he's had several offers to buy the course from folks who'd like to keep it a golf course. He says most offers are around 2 million bucks. However, he's had offers from housing developers that will give him up to 6 million for the land. Greens fees there are between 12 and 20 bucks depending on day of the week and if you take a cart etc... 

I can't pretend to understand all the economics of running a golf course. The course is nearly always in great shape. I'm totally worried, however, that one day I'll roll by there after work and they'll be building houses on my favorite 9 hole course. 

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I once golfed 9 holes with our course supt. During our round I asked him what it would take to spruce up the practice bunker. Clean out the weeds, and add some sand. He kind of laughed and said "sand cost $40 a ton, and it doesn't take much sand to make a ton".. 

 . 

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10 hours ago, Buckeyebowman said:

The OP said the course was in fine shape, so it wasn't a cow patch! As with everything else, it's whatever the market will bear.

The OP said they could have played a truly championship layout for the money they paid for this place. So, why didn't they? There's probably a good market for that course, because there are a whole lot of guys who don't play to a 2.6 HI and don't feel like getting their brains beaten out on a "championship" layout! 

 

Yes, like I said in the OP, we usually play another course in the area that we couldn't get on due to a tournament. The course we played was actually 10 bucks more than the one we usually play so I guess I was assuming that it would be similar to the one we usually play.  And the back 9 of the course was somewhat close. I'm not criticizing the course, I'm just stating that I think the cost was high for the product. I was expecting a little more (like other purchases I've made over the years I didn't feel like I got my monies worth). The particular area that the golf course is located is an upscale retirement area here in Florida. Most rates go up in the season but the rates in this particular area REALLY go up. Apparently the market does bear it. It looks to me like your better off getting a membership in that area because the green fees literally double in the "season". I'm just saying (in my personal opinion) that the product really doesn't match the cost.

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23 hours ago, Bucki1968 said:

We both agreed that this course should have been about $15.00 to $20.00 less based on the amounts we have paid at various courses in the past. I'm a curious what everyone else's criteria is. 

There is a lot that goes into this,

1. Location - Tourist areas will be higher. Some courses will feel like a deal, but most will be overpriced compared to similar quality from your local courses if you do not live in a tourist area. The baseline is higher.

2. Supply and Demand - If a course is able to pack the course, then raise the prices. They can sometimes get away with more if they offer deals more often. There is a course near me that is routinely $10-$15 more expensive than better courses. Yet, they are always packed! Also, they tend to have one of the better maintained courses throughout the year.

If a course has a lot of bunkers, great condition, good facilities I expect the course to have a decent price. Basically, I want to feel like the course is spending money on the course. I don't really throw in layout when it comes to price.

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44 minutes ago, saevel25 said:

Location - Tourist areas will be higher. Some courses will feel like a deal, but most will be overpriced compared to similar quality from your local courses if you do not live in a tourist area. The baseline is higher.

In Frankenmuth, Mi,  which is a tourist destination area about 30 minutes north of me, there is a course in town called The Fortress.   It is always maintained very well, better than most elite courses up north.   It's rare when they offer discounts.   They realize there will be a lot of visitors who don't mind paying a little more for something better.   It  is priced higher than other courses but because it is a tourist destination, they are almost always booked.     

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Cost of operations for the minimum cost

Supply and Demand for the rest. 

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I think the OP is asking about our criteria as players, not the microeconomics of golf course pricing.

For me, a course's value is driven by the following factors:

-Comparison to other local courses

-Course conditions not due to weather

-Speed of play (I would hate to pay $150 for a 7 hour round)

-Difficulty (For some reason I feel that easier courses should charge less)

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15 hours ago, chspeed said:

I think the OP is asking about our criteria as players, not the microeconomics of golf course pricing.

For me, a course's value is driven by the following factors:

-Comparison to other local courses

-Course conditions not due to weather

-Speed of play (I would hate to pay $150 for a 7 hour round)

-Difficulty (For some reason I feel that easier courses should charge less)

Yes...that's what I was getting at. I should have made a different title for the Post. I have become very familiar with economics of golf. Myself and some partners are currently kicking around the idea of buying a golf course. 

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I am willing to pay a premium to play a reasonably well-maintained course.  Additional facilities are nice but not necessary.  Beyond that...I'll fork over some extra cabbage if the layout appeals to me more so than a less expensive alternative.  That all goes out the window when the only options are to play or not play.  

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53 minutes ago, Bucki1968 said:

Yes...that's what I was getting at. I should have made a different title for the Post. I have become very familiar with economics of golf. Myself and some partners are currently kicking around the idea of buying a golf course. 

Make a poll, you'll probably get more useful data.

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On 5/1/2019 at 8:50 AM, Piz said:

I am willing to pay a premium to play a reasonably well-maintained course.  Additional facilities are nice but not necessary.  Beyond that...I'll fork over some extra cabbage if the layout appeals to me more so than a less expensive alternative.  That all goes out the window when the only options are to play or not play.  

I have long thought that courses need to differentiate and focus on segments. I will pay for quality conditions and pace of play (also active management of play). I also will pay for options of tee boxes so I can bring friends who may be of different skill levels. I also like. Well stocked snack shop with more than beer and hot dogs.

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