Golf ‘is devalued by Groupon’14th June, 2012 by Colin Victor
The chairman of the Organisation of Golf and Range Operators has said that the sale of green fees by internet companies such as Groupon is so damaging to golf clubs that it could strip them of any power they have to control prices and tee time availability.
Colin Jenkins PGA, who is also the owner of Staplehurst Golf Centre in Kent, warned that using companies not affiliated to golf clubs to market tee times to thousands of people could result in clubs being in the same position as farmers, when it comes to negotiating prices for their produce with supermarkets.
“Supermarkets now dictate the produce, its colour, size and taste, and then proceed to impose very tough payment terms,” he said.
“If golf clubs are not careful, they may suffer the same fate.”
Jenkins stated that “third party tee time resellers”, such as Groupon, the current market leader, which saw its UK golf market grow by 100 per cent in 2011, are offering ever-cheaper green fees. “The whole world seems to have gone voucher mad with Groupon. Discount offers are now seemingly the only way to attract new trade. Great if you are a golfer and great if you are making a commission from these trades. But maybe not quite so good if you are a golf club, finding that you have less income from more traffic,” he said.
“The strangest part of this is that golf clubs seem to think that they need these companies to help them through difficult times when the tee time resellers are partially to blame for the difficult times!
“If they were, at a stroke, no longer able to offer prime tee times at a discount, then what would happen? Golfers would continue to play when they could. Golf clubs should take a firmer stand – in fact, many of the clubs that currently do not accept discounted tee time offers are doing better year on year.
“These businesses have succeeded in offering masses of people more product for less money. Golf clubs are expensive to run and prices cannot continue to fall simply because this is what the customer says they want – more for less is a poor master.”
He particularly warned of the practice, carried out by some tee time sales companies, in which they are prepared to market the club for free – provided they choose when the tee times are and what the discount is, as this would help the marketer differentiate from its competitors.
“This is the scariest development of them all, as golf clubs then lose control of their tee sheet and pricing structure to someone else,” he said. “The clubs end up undercutting themselves!”
He also stated that in the USA, where Groupon has been bigger for longer, the situation has got so severe that the National Golf Course Owners’ Association has produced a guide to American golf clubs “educating them” of the threats and dangers of online tee time resellers.
Jenkins accepted that some golf clubs do benefit from Groupon, however. “Some do require a volume of trade that is hard to achieve, and they accept that they will get less for their core green fee in return for a high number of visiting golfers. This can be very useful when the club has a busy food and drink operation and looks to capitalise on secondary spend to regain the lost margin on its golf course,” he said.
In relation, The Kent and Surrey Golf Club has been using Groupon since December. “Without these internet deals, we wouldn’t have been as busy,” said a spokesman. “We are booked up every weekend like never before, also our food and drink sales have gone through the roof. Groupon and other internet sites have improved our club, it has made us busy, given us revenue we would not have got and is putting our name back out there.”
While Addington Court Golf Club in Surrey secured 184 customers from a recent Groupon coaching deal, and 176 of these were retained.
Jenkins comments come just a few months after the manager of Chalgrave Manor Golf Club in Bedfordshire called for all British golf clubs to join forces to set up a rival company to Groupon, in order to ensure the clubs receive more of the money the players are spending on the game. “Groupon devalues memberships and green fees,” said Steve Rumball. “We need a central organisation that is operated by golf clubs for golf clubs.”