An Industry Need That Will Never Be Fulfilled

Benchmarking is one of the most needed products in the golf industry that is vastly underserved.

Both Pellucid and Loustalot/Darrow have tried to make inroads into this area.  We are sincerely hoping they will be successful. I doubt that they will be. Here is why.

The number of golf courses interested in the service is insufficient enough that Pellucid (Koppenhaver/Lindsay) – Sagacity (Loustalot/Darrow) will cannibalize each other’s potential market share. Pellucid stated they have 100 clients while the market share for Sagacity is speculated to be around 500 to the 800 reported.

The Sagacity (ORCA at the time) revenue management models were used by a prominent resort in Arizona. The GM indicated that while the data was interesting anecdotally, it had little applicability to adjust rates prospectively to boost revenue.

The PGA of America, with its resources, could not get widespread adoption.   The service was FREE to members, and those PGA Professionals who participated received continuing education credit.

The PGA of America has tried several iterations over the past decade, including regional Revpar, Rounds, and Utilization statistics in which they listed the golf courses participating so you might compare to one’s respective market segment. The PGA also launched PGA Performance Trak, which offered over 50 different statistics and drew, during its heyday, up to 1,200 golf courses. The service was abandoned in early 2020.

It is rumored that the PGA of America paid Sagacity $500,000 in 2022 to license their software. Sagacity to be congratulated for being great salespeople. I highly doubt the PGA will derive value from the investment.

Sagacity, with the support/endorsement of PGA of America Secretary Don Rea and marketing coverage from the NGCOA, attracted early adopters but is failing to cross the chasm of widespread market acceptance.

It should be noted that the NGCOA, since the mid-1990s, under the direction of then Assistant Executive Director Michael Tinkey, advocated the need for golf industry benchmarking, citing the hotel industry’s STAR report. The call for such did not resonate.   The STAR report only captures:

• Average Daily Rate (ADR) = Total room revenue /  Total rooms sold
• Occupancy (Occ) = Total rooms sold / Total rooms available for sale
• Revenue per Available Room (RevPAR) = Total room revenue / Total rooms available for sale
• Revenue per Available Room (RevPAR) = ADR x Occ
• Market Penetration Index (MPI) = Hotel Occupancy / Comp Set Occupancy
• Average Rate Index (ARI) = Hotel ADR / Comp Set ADR
• Revenue Generation Index (RGI) = Hotel RevPAR / Comp Set RevPAR

The call for such did not resonate.   It may be possible in the golf industry to generate this limited set of data it should be highlighted.

The Club Managers of America, after licensing the fabulous Club Benchmarking suite of reporting tools, could not get widespread adoption and discontinued the affiliation to conserve expenses.

Clients that have used Club Benchmarking liked the initial reporting to compare their facilities against the industry benchmarks. Still, they found little value in the continuing reports once the initial benchmarks comparison was complete.

Beyond these strategic reasons, they’re a far greater detriment by many to use either program because:

• The operating models of municipal, daily fee, private clubs (equity and non-equity), resorts and military are different and not comparable.
• The general ledger account structure is different at every golf course in America. It requires a lot of data manipulation of the income statement accounts to derive meaningful numbers.
• National management companies benchmark internally and compare the performance of their managed courses against each other. They have little interest in viewing the benchmarks of different golf courses whose management practices are likely not comparable to their own.
• The operating performance of golf courses varies widely between regions within the Country. Comparing a course located in the north vs. the south would not produce meaningful results.
• Many individual golf course owners want to keep their financial statements private and don’t care to share them. They don’t trust that their data will be protected.

Thus, beyond the monthly rounds reports issued by Golf Datatech and some basic key performance index numbers (KPIs), it is unlikely that the industry will see a comprehensive set of meaningful benchmarks, unfortunately, any time soon.