A Conflict of Interest? An Economic Conundrum

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In the report released by National Golf Foundation on March 6, 2023 for the City of Jamestown, NC, the Town Manager is quoted, “…NGF repeatedly stated in their report that municipal golf courses typically are not profitable…”

The Executive Summary on Page 6 states, “The result is a new economic equation for JPGC that will see total operating losses after basic on-site expenses start to come down closer to ($100,000) to ($125,000) per year, much improved from the ($400,000+) loss on operations observed in FY2022.”

How they lost that much money in 2022 in amazing.  Perhaps this provides a clue.

The report on Page 24 state “JPGC is providing two (2) tee-time per day (8 player slots) to Go/fnow that they can sell on their platform. The tee times are after 11:00 AM and if all are filled, would equate to a cost of about $55,000+/per year (2,800 rounds@ $19.64 avg rate). While this amount is slightly higher cost than traditional golf POS system the Town could utilize via purchase, the extras related to hardware and website support make the Golfnow concept an appropriate fit for Jamestown Park.” (emphasis added).

This software cost may be in addition to the potential downward effect barter has on GolfNow’s hyper focus on selling Hot Deals.

Excellent golf management software is available for less than $10,000 from Club Caddie, Club Prophet, ForeUp, Lightspeed or Teesnap.

Can someone explain to me how software an annual expense of $55,000 is only at a “slightly higher cost” than better software solutions that can be purchased for $45,000 less? The cost of hardware and a website are nominal compared to the chasm in prices that exists.

Transparency is vital.  Golf Channel, owners of GolfNow under the Comcast Umbrella are Executive Members of the National Golf Foundation.

Does the NGF have a conflict of interest if that they are protecting their corporate sponsors at the risk of compromising the interests of their consulting clients?  Should the NGF Consulting Division recuse itself when commenting on Executive Members?  I will let you form your own conclusion.

The fact is 2,422 and 2,268 barter rounds representing 7% of all rounds were liquidated in 2021 and 2022, respectively.  Note that the maximum green fee rate as stated on Page 27 is $45.  Thus, the golf course average revenue per round is 44% of the rack rate compared to an industry benchmark of 60%.  That signals excessive discounting.

Do you think there is any correlation between the projected net loss, the discounts and 7% of the rounds not generating any revenue?  What is your opinion.

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