In the new golf economy, there are two options: get smart or get out.
More than ever, golf courses around the country are squarely focused on the bottom line. Many operations, according to industry analysts, don't have the cushion or margin for error to withstand a golf season marked by bad weather, bad luck or bad decisions.
All too often, decisions driven by the bottom line have included replacing a seasoned superintendent with a less-experienced, cheaper model. The city of Madison, Wis., has taken a different approach to cutting expenses and increasing revenue by eliminating the golf professionals at its four municipal courses. And the move, though initially met with golfer resistance, has proven to be a savvy business decision, the city says.
In the fall of 2012, the city council, at the urging of the parks and recreation department, opted not to renew contracts with four Class A PGA professionals with more than 100 combined years of experience operating city-owned Glenway, Monona, Odana Hills and Yahara Hills golf courses. The city estimated that the four professionals, who were independent contractors, took in 90 percent or more of the estimated $1 million that went through the four golf shops combined. The pros were replaced by seasonal, unionized assistant pros and concessions workers, the city said.
The decision to move away from the traditional golf pro model was purely economic.
From 2008 to 2011, the city said, the four golf courses took in a combined average of $1.14 million annually from food and beverage sales and club and cart rental. The city, which owns the courses and takes the greens fees, got 15 percent of club and cart fees and 11 percent of food and beverage sales at each course, with golf pros getting the rest, which also included all proceeds from merchandise sales.
Two of the four former pros said their annual take-home pay after expenses was about $30,000 in 2012, figures that were disputed by the parks department and other city officials who told the Wisconsin State-Journal that the men had not been forthcoming with financial information. One of the displaced pros had worked at a city-owned course for 36 years, two others for nearly 30 years and the fourth for a dozen years. Each, according to the city, also was paid a stipend that ranged from $24,000 to $44,500.
Golfers feared inefficiency and disruptions to play and league activity, and told the newspaper that they would miss the personal touch offered by the golf pros. Instead, they showed with their wallets that they appreciated special deals on green fees and reduced prices in the grill since, discounts the city can stomach since it no longer has to split the proceeds with the golf pro. The result, the city says, is the golf operation's largest profit in several years.
A total of about 81,000 rounds had been played at the four courses. Even though much of the spring golf season was washed out by rainy weather, that number is about 1 percent higher than the entire 2012 golf season, according to park officials.
The four courses turned a combined $287,000 profit that included a $150,000 computer upgrade project. That's an increase of 43.5 percent over last year and a 400 percent increase over 2010. The four courses lost a cumulative $71,000 in 2011, the city said.
The city said it plans to use the profit to make badly needed improvements to the clubhouses at each property.