NGF - KEEPING GOLF BUSINESSES AHEAD OF THE GAME SINCE 1936 1150 SOUTH U.S. HIGHWAY ONE, SUITE 401,...

NGF - KEEPING GOLF BUSINESSES AHEAD OF THE GAME SINCE 19361150 SOUTH U.S. HIGHWAY ONE, SUITE 401, JUPITER, FL 33477

PHONE: 561-744-6006 ∙ FAX: 561-744-9085 ∙ www.NGF.org

BREC Golf CoursesFinancial Study and Review of Operations

Prepared forRecreation & Park Commission for the

Parish of East Baton Rouge

Presented byRichard Singer

Director of Consulting ServicesNational Golf Foundation Consulting, Inc.

(561) [email protected]

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Introduction National Golf Foundation

• Municipal golf facility consulting

• NGF Staff – Richard Singer, John Wait

• Not advocate for any position other than BREC Golf success

• Review based on a limited view of the operation in 2014

Why we’re here:

• BREC Golf Courses Financial Study and Review of Operations

• Evaluate the long term potential of each BREC course and the system as a whole

• Document the market environment, and identify implications for future BREC golf course operation

• Present recommendation for maximizing economic potential of each BREC golf course moving forward

BREC Golf Operations

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On-site Facility inspection of BREC’s seven courses

Review and analysis of BREC operating data

Meetings with:

• BREC senior staff

• Golf system staff

• Golf Advisory Committee

• Staff at each of the seven BREC courses

Market analysis to include:

• Local market research

• Golf facility research

• In-market competitive data

• Weather data

• Golf operations in general

Methodology

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Key Components of the Study Overall condition and operating efficiencies of BREC golf

A review of golf industry standards and norms of operation and benchmarking BREC golf operations against them

Status of the broader Baton Rouge market area, with focus on external issues that can affect public golf operations, including the balance between demand and supply

A comprehensive review of each BREC golf course and its present physical condition and capital needs

A careful estimate of the cost of capital needs at each facility

An estimate of realistic economic potential of the BREC golf system and its ability to fund needed capital improvements

A review of the appropriate mix of BREC Golf facilities

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General Impressions

The BREC golf system was able to generate approximately $3.6 million in total on-site revenue in 2013, approximately $1.6 million (45%) was generated by one facility – Santa Maria GC.

The NGF observed generally poor maintenance conditions at all of the BREC golf courses (due in part to expense reductions) in early 2014, but there has been improvement since the NGF review in 2nd half of 2014.

A need to maximize the use of the most up-to-date and modern technologies that can help improve golf operations and customer service (better integration with GolfTrac system happening in second half of 2014).

Golf courses that are generally understaffed (in maintenance), leading to stress within the labor structure and added responsibilities of employees.

Changes made in the second half of 2014 seem to be leading to a more sustainable golf operation. A new Golf Director and Assistant Golf Director hired after NGF’s visit in 2014.

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Key Issues We See

A need to continue the 2014 improvement of golf course conditions, especially the greens into 2015 and beyond.

A need for restructuring the operation and modernizing technology (i.e. the new mobile version of the website, on-line specials and e-mail marketing).

Inadequate ancillary amenities at several facilities, including limited Food & Beverage.

A need to improve marketing to include both passive and active marketing efforts.

A need for streamlining staffing and park oversight. Uncontrollable factors such as recent recession and the general

lack of golf “tradition” within the local population.

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External Factors

External factors around the BREC golf course that impact the public golf operations:

• East Baton Rouge has lower income than the total U.S.

• Drop in golf demand regionally and nationally.

• All BREC golf sites are in markets with generally favorable supply conditions, but very low demand estimates.

• The overall Parish of East Baton Rouge market has only about 50% of the number of golfers per courses compare to the national threshold.

• Visitors to Baton Rouge could contribute a significant volume of golf activity.

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Key Operational Findings

BREC Golf is set up to be a public accommodation, but will need to transition to a business enterprise to be sustainable long-term.

Course conditions and service will need to be improved, likely requiring adequate staffing and capital investment. Overall course conditions need to be addressed at each course.

Need to improve the Food and Beverage operation at both Beaver Creek GC and Historic City Park GC.

Upgraded marketing practices targeting tourists/visitors to the Baton Rouge area. Especially for Santa Maria GC and Beaver Creek GC.

BREC would likely function best as a five-facility system.

Thus, BREC will have to consider repurposing Howell Park GC and JS Clark GC’s into more widely accepted park uses.

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2014 Customer Survey NGF surveyed 294 golfers in May-June 2014 who have played

at one of the BREC courses, 82% being daily fee players and 18% being “Annual Pass” holders. These respondents:

• Have a low level of satisfaction with BREC facilities. The highest satisfaction was for Santa Maria GC and the lowest was for Dumas GC.

• Indicated they would play more at BREC facilities if the courses were in better condition.

• Are concerned about the quality and amenities associated with the food and beverage service.

• Want to see improvements in the courses’ use of technology and pace of play.

• See the BREC golf courses as a good overall value.

• Are concerned that staff is “stretched thin” and thus not providing the best service.

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NGF Recommendations

Seek to operate the golf system more like a business and less like a public accommodation.

Continue with an improved form of self-operation, but be prepared to change to some form of privatization model if targets cannot be met within 3-4 years.

BREC golf system would probably operate best with a total of:

• One or two premium 18-hole courses, with strong geographic diversity

• One middle quality 18 hole course

• One middle quality 9-hole course

• One facility with a driving range to be focused on the development of beginners and less skilled players.

Thus, BREC should be reduced to a five-facility system through the repurposing of Howell Park and JS Clark GCs into more “passive” park space or sports fields, with the First Tee program moved to Dumas GC

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NGF Recommendations on Repurposing:

BREC immediately act to repurpose Howell Park GC into a use other than golf.

Begin planning for the eventual repurposing of JS Clark, with the concept of moving the First Tee elements over to Dumas GC. This will require new investment in Dumas GC, especially in adding a new driving range.

As golf facilities are repurposed out of golf, the resources (capital and staff) should be re-assigned to other BREC golf courses (equipment upgrade is underway in 2nd half of 2014).

There is a cost to repurpose a Parish golf course, both in terms of direct capital remediation and ongoing maintenance.

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Physical Improvement RecommendationsAll Facilities

• Making quality course conditions a priority

• Maintaining the appropriate staff and budget at each facility

• Committing to capital need improvements

• Maintaining the courses with the appropriate quantity and quality of equipment

• Employing the appropriate expertise for properly maintaining golf courses

Upgrades by Facility

• Improve playability of the courses (tees, irrigation, bunkers, range amenities)

• Gym / Fitness conversion to banquet area at Webb GC

• Add pavilion and improve grill facilities at Beaver Creek GC

• Improve clubhouse facilities at Santa Maria

• Convert the cart storage at City park to a small snack bar/grill

• Add driving range to Dumas (in lieu of re-do 18th hole)

• Deck covering at Webb GC

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NGF Basic Operational Recommendations1. Improve use of technology in areas such as POS, email, databases, financial

reporting and website(s)

2. Enhance Marketing efforts to include attracting tourists, large employers, seniors, women, minorities, juniors and leagues.

3. Adjust green and annual pass fees to include slight adjustments, both up and down, for various categories at various times of the day and week.

4. Enhance the customer experience.

5. Increase play at all BREC courses by getting more from existing customers, take play away from other courses and develop new golfers.

6. Expand existing leagues and create new leagues to stimulate activity.

7. Enhance direct sales in the areas of food and beverage, merchandise and driving range.

8. Address areas such as pace of play, third-party wholesalers, beverage carts, lesson/programs, family golf and many more.

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Summary of Recommendations

Upgrade the physical condition of the BREC golf courses and clubhouses (underway in 2014).

Modify the system into five golf facilities with a variety of course types and geographic diversity.

Repurpose Howell Park GC to a use other than golf.

Repurpose JS Clark GC to a use other than golf, and move First Tee over to Dumas GC.

Improve technology and marketing (underway in 2014).

Enhance food and beverage services at all facilities.

Make all the golf courses more appealing to less traditional golfers, especially women and minorities.

NGF - KEEPING GOLF BUSINESSES AHEAD OF THE GAME SINCE 19361150 SOUTH U.S. HIGHWAY ONE, SUITE 401, JUPITER, FL 33477

PHONE: 561-744-6006 ∙ FAX: 561-744-9085 ∙ www.NGF.org

BREC Golf CoursesFinancial Study and Review of Operations

Prepared forRecreation & Park Commission for the

Parish of East Baton Rouge

Presented byRichard Singer

Director of Consulting ServicesNational Golf Foundation Consulting, Inc.

(561) [email protected]

NGF - KEEPING GOLF BUSINESSES AHEAD OF THE GAME SINCE 1936 1150 SOUTH U.S. HIGHWAY ONE, SUITE 401,...

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