While maintaining the same number of annual rounds, The Quarry Golf Club in San Antonio managed to increase average rate per player by 25% by basing its tee-time prices on a supply-and-demand model.
What happens in Vegas doesn’t always stay in Vegas—and sometimes that’s a good thing.
When Dustin Burell, General Manager of The Quarry Golf Club in San Antonio, read an article about a Las Vegas golf course that based its tee-time prices on the airline industry’s model of the sale of available plane seats, he decided to export the plan to the Lone Star State. Six months after implementing the system at his upscale daily-fee course, Burell endorses it with no reservations.
And for good reason. While the number of golfers has remained the same (in the 36,000-40,000 annual round range), The Quarry GC has seen a 25 percent increase in the average rate per player since the beginning of the year, Burell reports, and a 21 percent increase overall. “It’s a constant supply-and-demand battle, but we watch peak times to get higher rates, without affecting player count,” he explains.
Tee times at The Quarry are set at 10-minute intervals, and the property changes the rates, which are based purely on demand, every hour on the hour. Peak hours are more expensive, while off-peak hours are less costly.
“It’s like fishing where the fish are,” Burell says.
Prices increase during prime times such as spring days and Saturday mornings. The property also lowers rates to steer golfers to less-popular time slots, such as early-morning hours during the winter, or holidays like Mother’s Day.
THE GOAL: Drive traffic and increase revenue at The Quarry Golf Club by implementing a tee-time pricing system based on supply and demand.
“We can put 20 people on the golf course every hour. I monitor it daily and hourly,” notes Burell. “The instinct is to discount prices to get people on the golf course. But we can get out of the $40 to $50 range, and the municipal courses can move into it, because they need to.”
Tee times are posted 60 days in advance for individuals, who can reserve their spots with credit cards, while corporate outings and other golf events can be booked two years ahead of time. Just as airlines price tickets based on seat availability, the golf course sets its rates based on available tee times. Burell says about 35 percent of tee times are reserved online.
“We try to book 80 percent of every hour. Once we reach that goal, we raise the rates for the remaining one or two slots,” explains Burell. “We raise the prices as we approach the day. This gets people to commit earlier, instead of waiting for a fire sale. If the demand is low, we make [the price of] that tee time lower, to sell 80 percent of tee times.”
The pricing system has boosted the golf industry in the San Antonio community as a whole, he notes.
“We’re not competing with other local golf courses, but they can raise their prices and still be lower than us. It helps the entire golf community,” adds Burell. “We’ve seen other courses slow down [their promotional] e-mails and raise prices. The bellwether golf courses in every city should move up pricing so others can, too. We need higher-end golf courses to be more demand-based. It makes the whole golf industry healthy.”
Thanks to the success of the new pricing system at The Quarry, fire sales and e-mail blasts are a thing of the past for attracting golfers to the 20-year-old course, about 80 percent of whom are tourists. And while the article on the Las Vegas course may have sparked the idea, Burell and Kyle Cole, managing partner and one of the course owners, researched two decades of historical data and tracked the schedule of event traffic in San Antonio, a top tourist destination in the country, for about six months before implementing the system in January.
Like many golf course properties nationwide, The Quarry Golf Club had struggled in recent years. According to Burell, the golf course, despite its appeal of a Keith Foster design with a back nine that dives in and out of a 100-year-old quarry pit, saw a 15 percent decrease in rounds in 2008 and 2009. The numbers did not improve in 2010.
“We backed off golf course maintenance, etc., to save money,” says Burell.
However, the property did an about-face in 2011, when management decided it needed to make a change to try to bring the number of rounds—and revenues—back up to par. Although The Quarry is the bellwether daily-fee facility in San Antonio, the owners realized that any changes would have to start with improving the property’s overall experience for golfers. To enhance The Quarry experience, $1.4 million was invested in the property to improve its assets and services.
Improvements to the golf course have included bunker renovations, additional rock features, the replacement of four bridges, installation of new drainage structures, new pumps to create creeks on the front nine between lakes, coverage of several acres in native areas with wildflowers, new cart paths, resodding of several fairways and adding three full-time course maintenance staff members. The property also got new course maintenance equipment, and increased its fertilizer and chemical budgets.
“We raised the bar on the golf course, and we did the same thing in the food-and-beverage and service areas,” says Burell. “We had to enhance the assets immensely to justify and succeed at the higher [average] rate.”
In addition, he reveals, “I can handle staffing differently, because I know people are coming to the golf course.”
The new tee-time pricing system also has helped The Quarry keep resellers from cutting into profit margins. “Resellers have no expense of owning or operating a golf course, and they can sell the entire country. Weather isn’t an issue for them, because it’s always sunny somewhere,” Burell explains. While some courses need to make use of reseller programs, he acknowledges, The Quarry stopped participating in all but a select few of them in the spring of 2011.
|Supply-and-Demand Pricing at The Quarry GCRate Total $ Possible Utilization % Actual $
7am $ 95 $ 1,900 75% $ 1,425
8am $ 129 $ 2,580 85% $ 2,193
9am $ 125 $ 2,500 91% $ 2,275
10am $ 115 $ 2,300 91% $ 2,093
11am $ 110 $ 2,200 80% $ 1,760
12pm $ 95 $ 1,900 80% $ 1,520
1pm $ 85 $ 1,700 78% $ 1,326
2pm $ 67 $ 1,340 65% $ 871
3pm $ 55 $ 1,100 52% $ 572
4pm $ 45 $ 900 35% $ 315
5pm $ 35 $ 700 21% $ 147
Armed with research data to support the new system, management personnel then had to decide when it felt comfortable raising the price bar. The property improvements, along with January’s closure of San Antonio’s historic Pecan Valley Golf Club, contributed to The Quarry deciding to introduce its new rate system at the start of this year.
Burell notes, “We had a fantastic November and December. We did an aggressive customer survey of people who had played in the last 90 days, and got an overwhelmingly positive response.”
The reaction has been just as positive since the new tee-time pricing system, which Burell says was implemented through the club’s existing point-of-sale program, has been in effect.
“The golfers understand we have a product that’s in demand,” he says. “[The pricing system] takes time and energy—but it’s producing results that are significant.”