Labor expenses as a percent of gross revenue vary by type of golf course facility from 44% to 56% depending on the data source accessed as detailed below:
|Type of Golf Course||
Note 1: PGA PerformanceTrak statistics for 2017. Club Benchmarking statistic provided to JJ Keegan+ by a client in February 2019.
Note 2: We suspect that the labor for private clubs as reported by Club Benchmarking may be more accurate as their sample size of clubs is larger and the detail input is far more detailed.
Golf is one of the few service industries where staff interaction with the customer is required to consummate every transaction. By default, that creates a labor-intensive process.
Who is Responsible?
The fault lies, not with the golf course owner, but with the companies that provide software to the golf industry as they have failed to provide customer-centric solutions to facilitate a golfer efficiently and quickly serving themselves while assisting the golf course owner build a meaningful database of customer transactions.
What is missing? The answer is check-in kiosks and apps for the golfer to register and pay either in the pro shop or via their cell phone. Further, an ordering system in which the golfer enters the beverages and food they desire from a table kiosk that is directly tied to the kitchen is the second missing component at a golf course to accelerate the reduction of labor expenses at a golf course.
Other industries, with their own inherent complexities, have successfully addressed this issue to reduce labor expenses and boost profits. Here are five examples:
|Airlines||United||On-line reservation systems and check-in kiosks||Download|
|Car Rental Companies||Hertz||Check-in kiosks||Download|
|Restaurants||Chili||Food ordering and payment system||Download|
|Restaurants||Sonic||Food payment system||Download|
While the answer is simple there are some significant hurdles that must be addressed for the golf industry to embrace this change.
Golf is a small business of over 14,000 owners each focusing on their individual needs with the vast majority being small entrepreneurs. In defense of the golf software firms, they too are mostly small businesses handicapped to secure the capital investment required to provide the optimum solution for what a golf course is willing to pay for the said solution would be daunting. Also, the employed at the golf course embrace the status quo. Most enter the golf industry in love with the game and not necessarily, the business.
Beyond the owners, the employees and the software firms, the golf industry does have unique challenges that other service industries don’t. Most service industries provide a very vertical offering a singularly product, i.e., an airline seat, a hotel room, a meal. The golf course industry can easily be made to be horizontal by offering many varied services: golf, food, banquets, corporate conferences, weddings, pool, spa, fitness, etc.
Golf, particularly on the public stage, is vastly different as individuals with diverse skills, varying styles of play and a myriad of assorted paces to which they play, render the delivery of a consistent experience difficult.
If the focus is even narrowed to merely purchasing a tee time or ordering food before, during or after round, some hurdles are obvious:
- Booking tee times is often by one individual who is usually not financially responsible for paying for the entire group.
- Only one name is entered into the reservation, not all players. The names of other golfers in the group are rarely identified. Airlines require each person to purchase their own ticket for security reasons.
- Members at private clubs expect a high level of personal service.
The installation of kiosks and apps is not the end-all solution for every transaction. We speculate that it might be used perhaps only 40% of the time but, as technology evolves, that is a good start. The implementation of a loyalty rewards program to incentivize golfers would accelerate adoption.
With respect to food and beverage, the experience might actually improve. Rather than waiters/waitresses, a restaurant ambassador, particularly at a private club, might circulate the room engaging patrons in conversation and building a rapport to enhance the experience.
Like any solution, it evolves over time. Perhaps it is time now to start evaluating how this labor saving idea can be implemented.
That is my thought. I would like to learn yours. I am confident the software firms will have many opinions, that when shared, will help the industry move to a more solid financial foundation.