Chapter 7 golf based resorts managing the operation
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Chapter 7 Golf-Based Resorts: Managing the Operation. Identify the changing trends in and demographic profiles of the golf market. Industry Trends: Golf industry leaders are concerned that the number of future golfers will decline Issues most likely to impact business: Number of rounds

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Chapter 7 golf based resorts managing the operation l.jpg

Chapter 7Golf-Based Resorts:Managing the Operation


Identify the changing trends in and demographic profiles of the golf market l.jpg
Identify the changing trends in and demographic profiles of the golf market.

Industry Trends:

  • Golf industry leaders are concerned that the number of future golfers will decline

  • Issues most likely to impact business:

    • Number of rounds

    • Player retention


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Changing Trends (cont.) the golf market.

Industry Trends (cont.)

  • Water management is the major environmental issue facing the industry

    • Many courses are utilizing water conservative technology

      Changing Demographics

  • There are seven segments of golfers: core, seniors, women, juniors, highly skilled players, private club members, and high spending golfing households


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Changing Trends (cont.) the golf market.

Changing Demographics (cont.)

  • In 2002, 11 million golfers took an overnight trip that included golf

  • There are more than three times more male golfers than there are female golfers


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Changing Trends (cont.) the golf market.

Changing Demographics (cont.)

  • The profile of the average golfer is:

    • Male

    • Around the age of 50

    • College graduate

    • Household income between $100,000 and $149,999

    • Plays about 60 rounds per year and has been playing for roughly 22 years

    • Average score of 88.4

  • Male golfers spend slightly more than female golfers on golfing


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Identify the critical variables in determining a golf-based resort’s profit potential.

Operations

  • The Sun Belt covers the southern states and part of the coastal region

    • These courses are likely to be open year-round

  • The Frost Belt consists of northern states and the mountainous parts of southern states

    • These courses usually shut down for a while during winter


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Profit Potential (cont.) resort’s profit potential.

Income Statement

  • In 1999 U.S. golf resorts reported an average operating median of:

    • 28.9% for Frost Belt resorts

    • 25.3% for Sun Belt resorts


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Profit Potential (cont.) resort’s profit potential.

Revenues

  • Most revenue comes from annual fees and green fees

  • The second most important source of revenue is from golf cart rentals

    Expenses

  • The greatest expense is the cost of merchandise sold, followed by the cost of food and beverages

  • Payroll is usually the largest expense category


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Profit Potential (cont.) resort’s profit potential.

Staffing

  • Sun Belt resorts staff their facilities with 29 part-time and 34 full-time staff

  • Frost Belt resorts staff their facilities with 60 part-time and 43 full-time staff


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Identify potential solutions to financial problems faced by golf-based resorts.

Tournaments and Events

  • Business Golf

    • Customer Appreciation Events

    • Sales/Product Launches

    • Employee Outings

    • Fund-Raising events


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Solutions to Financial Problems (cont.) golf-based resorts.

  • Hole in One Contest

    • Companies organize the activity for the resort and provide the prizes

    • While many think it is virtually impossible to achieve a hole in one, in any given year in the U.S., there are over 40,000 holes in one


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Solutions to Financial Problems (cont.) golf-based resorts.

  • Women-Friendly

    Women friendly courses can:

    • Vary tee locations to allow the option of playing a harder or easier course

    • Feature holes in the 5,600 to 5,700 yard range

    • Provide holes where players do not have to carry the ball over a lot of obstacles

    • Where greens can be easily reached

    • Where forward tees are closer to the hole and allow for a better angle at the green


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Solutions to Financial Problems (cont.) golf-based resorts.

  • Banquets

    • Can be an excellent way to bring in additional revenue

    • Golf tournaments are a good market to advertise to

    • Pre-game lunches, box lunches, post game dinners, or cocktail parties have proven successful

    • Social events are the most financially profitable segments, including weddings, bar mitzvahs and anniversaries


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Solutions to Financial Problems (cont.) golf-based resorts.

Pro Shops

  • Margin Enhancers include discounts, rebates, fitting fees, advertising co-ops, freight programs, or free product accounts

  • Accessories

    • The key to increasing sales is in the presentation of items

    • Keep displays neat, use color effectively, develop a theme, cross merchandise, and avoid one level displays


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Solutions to Financial Problems (cont.) golf-based resorts.

  • Inventory Control

    • Controlling inventory can cut down costs

    • “Open-to-buy” refers to the amount of retail dollars set aside for the purchase of merchandise in the future

    • Old sales figures are used to project future sales

    • Merchandise group departments are created


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Solutions to Financial Problems (cont.) golf-based resorts.

  • Inventory Control (cont.)

    • To maintain control of the system the two important pieces used to determine beginning inventory levels are projected sales volume and the turnover rate desired by the shop

  • Credit Cards

    • Accepting credit cards makes the purchase easier for the customer

    • Retailers pay a fee to credit card companies when they accept credit cards


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The End! golf-based resorts.


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