HomeMy WebLinkAboutCSD-12-024 - Golf Operations Review1
Staff Re,~ort
KIT(;x~l\`~.R tammunity Services Department www.kitthenerca
REPORT TO: Community and Infrastructure Services Committee
DATE OF MEETING: February 27, 2012
SUBMITTED BY: Jeff Willmer, Deputy CAO Community Services, 741-2325
PREPARED BY: Kim Kugler, Director of Enterprise, 741-2544
WARD(S) INVOLVED: All
DATE OF REPORT: February 21, 2012
REPORT NO.: CSD-12-024
SUBJECT: Golf Operations Review
RECOMMENDATION:
That the NGF Consulting Operations Report attached as Appendix `1' to Community
Services Department report CSD-12-024 (February 21, 2012), be tabled; and,
That staff be directed to engage the community, including one public open house to
review the recommendations and operating models for the City's golf courses; and
further,
That staff be directed to report back to the March 19, 2012 Community & Infrastructure
Services Committee meeting with the results of the public feedback and
recommendations on the proposed operating model for the future for the City's golf
courses.
BACKGROUND:
During the 2011 budget process, staff identified that the golf enterprise had an issue of an
unbalanced budget due to declining revenues and increasing expenses. The decline in revenue
could have been associated with a number of things including economic conditions, declining
interest or time to play golf, participant fees being too high, periods of inconsistent weather,
perceived value relative to course quality and competitive reasons. Declining revenues in golf
was not restricted to Kitchener. In fact, it is a problem across North America.
In order to address the issue of an unbalanced budget, a number of measures were
implemented in 2011 with a goal to reduce expenses to $700,000 and maintain or grow
previous revenues:
- eliminated 2 management positions
- created administrative efficiencies
- contracted out food and beverage service
- reduced winter staffing and created other off season efficiencies
- adjusted the annual capital allocation
- reduced the dividend
- undertook more aggressive sales and marketing strategies
- re-introduced unlimited play memberships and cart memberships
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- implemented reasonably priced green fees with a goal to increase volume of play
- created a more customer focused service approach
These steps did achieve a virtually balanced budget with the 2011 year end financial
statements. This is a $700,000 improvement over the previous year
During 2011 golf season, staff coordinated an external operational review of the golf unit to
determine if further financial or operational improvements could be achieved. The review was
comprised of two components. One component included engaging NGF Consulting to
undertake a review of the City golf operations as it exists now and the other component included
canvassing the private sector to determine if there was any high level interest in the courses
through a lease or management arrangement in the future.
REPORT:
The NGF Consulting Operations Report is attached as Appendix 1. There are a number of high
level observations based on the information contained in the report and comments made during
debriefing meetings. These observations are as follows:
- the City golf courses are well run
- significant expense reductions were made prior to their engagement in 2011 -these
were the right steps
- there are a number of actions that should be considered for current operation that should
have some positive financial impacts over time (some immediate and some longer term)
- there is virtually no additional opportunity to cut expenses without jeopardizing the
assets
- if the City feels it wants a lot more financially out these enterprises, only then should they
consider undertaking an RFP to test the financial return through private sector
management or lease arrangement
While a huge improvement to the golf bottom line was achieved in 2012, there are still a number
of financial concerns as follows:
some improvement to overall golf revenues is possible, however the potential for a
significant improvement to the bottom line is limited under City operation according to
the NGF Consulting review
in order to balance the budget in 2011, the overall capital allotment for the golf enterprise
was reduced. Wth clubhouse facilities getting older, these buildings will require more
investment in the future than is currently allotted in the 10 year forecast
with the current dividend from golf at $130,000 per year it is going to be very challenging
to reduce the accumulated deficit
The NGF report identifies three main operating models which are:
1) self operation
2) management contract
3) lease and concession arrangement
The operating models for the golf courses will be shared with the public through the City's
website and during an open house at Rockway Golf Course to engage the public and collect
their feedback on the different models. The meeting will be scheduled prior to March 9, 2012.
Staff will prepare a report for March 19, 2012 that will include the public feedback collected and
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recommendations on the operating model to pursue in the future for the City's golf courses.
This timeline is necessary in order to provide direction and stability to the golf unit as the golf
season quickly approaches.
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
The process recommended in this report aligns with C1 Leadership and Community
Engagement where residents are engaged and active in decision making related to the
operation of the municipal golf courses. It also aligns with Quality of Life, specifically C6.1 All
Voices Matter, C6.2 A City where Everyone has a Place, C6.3 Nurture a Sense of Pride and
Community, C6.5 Community Programs and Facilities. E1 Finance Management, E2 Asset
Management and E5 Organizational Governance are also affected.
FINANCIAL IMPLICATIONS:
There is no financial implication at this time.
COMMUNITY ENGAGEMENT:
Should this report be approved, staff will host a public meeting to allow the public to review and
provide comments. Communications staff will assist with developing a communication strategy
to engage the public in providing feedback on the different operating models for the City's golf
courses.
ACKNOWLEDGED BY: Jeff Willmer, Deputy CAO, Community Services Department
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Unit Operational Review
The City of Kitchener Municipal Golf
System
in
Kitchener, Ontario
Prepared For:
The Corporation of the City of Kitchener
Enterprise Division
Fourth Floor, City Hall
200 King Street West
Kitchener, ON N2G 4V6
Canada
Prepared By:
~~~canrsu~r,nrG
1150 South U.S. Highway One, Suite 401
Jupiter, FL 33477
(561)744-6006
December 2011
Unit Operational Review
The City of Kitchener Municipal Golf Operation
in
Kitchener, Ontario
December 2011
Table of Contents
EXECUTIVE SUMMARY ........................................................................................................... 1
Purpose .............................................................................................................................. 1
Background ......................................................................................................................... 1
Summary of Findings and Recommendations ..................................................................... 2
Most Significant Recommendations ..............................................................................................3
CITY OF KITCHENER MUNICIPAL GOLF SYSTEM OVERVIEW ............................................ 4
Location and Accessibility Analysis .......................................................... ........................... 4
Local Map Context ......................................................................................... ................................5
Organization and Administration .............................................................. ........................... 5
Administrative Oversight ................................................................................ ................................5
Golf Related Facility Staffing ......................................................................... ................................ 5
Golf Operations ........................................................................................ ........................... 7
Golf Course Maintenance .............................................................................. ................................7
Point-of-Sale (POS) and Reservation Systems ............................................ ................................7
Kitchener Golf Marketing ............................................................................... ................................ 8
Kitchener Golf Fee Structure ......................................................................... ..............................10
Tee-time Policies and Procedures ................................................................ ..............................10
Golf Academy ................................................................................................ ..............................11
Doon Valley Golf Course .......................................................................... ..........................12
18-Hole / 9-Hole Golf Courses ...................................................................... ..............................12
Pitch &Putt .................................................................................................... ..............................12
Practice Facilities ........................................................................................... ..............................13
Clubhouse ..................................................................................................... ..............................13
Rockway Golf Course .............................................................................. ..........................14
Practice Facilities ........................................................................................... ..............................15
Clubhouse ..................................................................................................... ..............................15
Performance ............................................................................................ ..........................15
Rounds Activity .............................................................................................. ..............................15
Economic Performance ................................................................................. ..............................15
Food and Beverage Operations ............................................................... ..........................18
Rockway Summary .................................................................................. ..........................19
Doon Valley Summary ............................................................................. ..........................19
Golfer Survey ........................................................................................... ..........................20
Summary of Survey Responses .................................................................... ..............................20
Summary -City of Kitchener Municipal Golf Operations .......................... ..........................21
Winter Operations .......................................................................................... ..............................21
EXTERNAL FACTORS AFFECTING THE KITCHENER MUNICIPAL GOLF OPERATION ....22
Demographics /Economic Summary .................................................................................22
Economic Overview .....................................................................................................................22
Golf Market Supply and Demand Indicators .......................................................................23
Local Golf Demand and Supply ...................................................................................................23
Competitive Golf Market .....................................................................................................24
Competitive Assessment Review -Local Market Competitors ...................................................25
Competitive Facility Observations :..............................................................................................27
Area Golf Course Ratings ...........................................................................................................29
External Factors Summary .................................................................................................32
SUMMARY OF NGF CONSULTING RECOMMENDATIONS ...................................................33
City of Kitchener Golf System Basic Vision ........................................................................33
Recommendations on Basic Oversight and Structure
Management Options ..................................................
Option 1:Self-Operation by City ..................................
Option 2: Full Service Management Contract .............
Option 3: Operating Lease ..........................................
Option 4: Concession Agreements ..............................
Option 5: Hybrid Management Contract ......................
Discussion and Recommendation ...............................
Specific Physical Recommendations ...........................................................................
Doon Valley Improvements .................................................................................................
Rockway Improvements ......................................................................................................
Specific Operational Recommendations ......................................................................
....33
..... 34
..... 34
..... 35
..... 36
..... 37
..... 38
..... 38
....39
..... 39
.....40
....40
APPENDICES ...........................................................................................................................42
Appendix A -Golf Course Life Cycle .................................................................................. 1
Appendix B -Golf Industry Standards, Norms, and Operational Issues ............... ............... 2
Public Golf Operational Norms .................................................................................... ..................2
Public Golf Course Staffing ......................................................................................... ..................7
Golfer Expectations of Better Quality Public Golf Facilities ......................................... ..................8
Merchandising Operations .......................................................................................... ................10
Food and Beverage Operations .................................................................................. ................11
Executive Summary
PURPOSE
National Golf Foundation Consulting, Inc. ("NGF Consulting" or "NGF") was retained by the City
of Kitchener ("City" or "Kitchener Golf") to assist in evaluating the operational and economic
performance of City's municipal golf system. The following is a summarized version of our
report, detailing the main findings and NGF recommendations for the City to improve its
municipal golf system. In this Executive Summary, NGF provides a brief review of our findings
and recommendations on the Kitchener Golf system, intended to provide an "at-a-glance"
summarization of the full review. Additional detail on this summary can be found in the full body
of our report and its appendices.
BACKGROUND
The City of Kitchener is operating amulti-faceted golf system with many parts, each serving a
defined niche in the market. The golf facilities appear to be very important to the City, and the
Kitchener golf courses have developed a reputation for high activity and low fees that seems to
be well known in the Waterloo Region. The City is now operating a system of golf courses that
truly can offer "something for everyone," from the beginner all the way up to seasoned golf
professionals. The golf system reflects very well on the City of Kitchener and is a fine
complement to the overall City image.
In the last several years, the economic performance of the City's golf system has declined,
leading to stress within the system. There have been many changes over the years, including
the addition of a new nine holes and pitch & putt course at Doon Valley. While some of these
changes have not been popular with all of the golfing public, the golf assets within the City are
now fixed and the NGF Consulting review has been completed to offer the most appropriate
plan for these facilities going forward, regardless of what has happened in the past. In reviewing
the Kitchener Golf system, it was conveyed to the NGF consultants that the City of Kitchener is
"committed to providing affordable golf to the citizens of Kitchener," while making every effort to
provide an economic return to the City of Kitchener.
In 2011, NGF was retained by the City of Kitchener to assist with evaluating the Kitchener Golf
system and to make recommendations to help ensure the long-term viability of the golf program.
This includes a thorough review of the system on an `as-is' basis, as well as a consideration of
other operating alternatives, including privatization options. It is expected that the results of this
NGF study will be used by the City as a guide for the future of the golf system, and to help
convey to interested parties (citizens of Kitchener, City Council, etc.) that the City will operate
the golf system in the most efficient manner possible.
NGF Consulting completed a thorough review of the City's golf program that included several
meetings, inspections, review of data, and utilization of the NGF consultants' experience and
basic knowledge of golf industry best practices. NGF findings and recommendations are
designed to give the City of Kitchener a full understanding of its golf system as a whole, along
with an understanding of each individual facility within the City system. The ultimate goal of this
project is to create a formal business plan for the City golf courses that will put the system on a
path toward long-term economic stability and sustainability.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 1
The key issues addressed by the NGF team include:
• Overall condition and operating structure of the Kitchener Golf system
• A review of golf industry standards and norms of operation
• Status of the local Waterloo/Kitchener area golf market
• A summary of NGF recommendations
The NGF consulting engagement was managed by Richard Singer, Director of Consulting
Services for the NGF, with assistance from Senior Associate Consultant John Wait.
SUMMARY OF FINDINGS AND RECOMMENDATIONS
In summary, our findings are that the City of Kitchener is operating high quality golf courses that
suffer from a convergence of factors, many of which are not controllable by the City. The golf
courses are operating in an environment of intense competition, limited golf season, declining
demand for golf, and reduced discretionary funds among golf consumers. The City has reacted
to this new reality with some clear action designed to reduce the expense within the golf
enterprise. Recent actions include:
• Reduction of two golf management positions
• Creation of a new private contract for food and beverage service
• Recruitment of new golf professional and pro shop team
• Reduction of winter operations
• Initiation of a number of plans to enhance revenue including re-introduction of
unlimited play memberships
• Reduction of two administrative support positions
• Deferral of some of the Capital investment program
In review of the Kitchener Golf system, NGF finds that action on these above items will
provide relief from economic stress to the system, but that further expense reductions in
addition to those noted above are likely to reduce the overall quality of the golf product
and lead to further reductions in revenue.
Given that expenses have already been reduced to the furthest extent reasonable, any future
improvement in economic performance will have to be derived from enhancements to revenues
at the City golf facilities. In an effort to grow revenues at Kitchener Golf facilities, the City should
be prepared to consider some capital investment in the facilities as detailed by NGF in this
report. Assuming the viability of the golf system is in the best interest of the City, it is expected
that these investments will provide some economic stimulus to the Kitchener Golf system. The
City should also consider allowing for a segmentation of fees, allowing Doon Valley to compete
more directly with upscale public golf courses while Rockway would remain a lower priced
alternative for Kitchener residents.
As part of this consulting effort, NGF reviewed alternative options for the operation and
management of the City's golf system. This review showed that none of the "privatization"
alternatives would likely lead to a significant improvement in economic performance of the
Kitchener Golf Enterprise to a level that is clearly better than the expectations under continued
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 2
operation as is. Put simply, the NGF does not believe that the Kitchener Golf operation is
broken. As a result there is likely no "magic bullet" for Kitchener Golf in privatizing; and the
existing dedicated, hard-working, experienced staff of professionals offers the best likelihood of
improved economic performance in Kitchener Golf going forward.
Most Significant Recommendations
It is clear from the NGF review of the Kitchener Golf Enterprise that there are three key issues
leading to economic hardship within the Kitchener Golf system, with two of these not being
controllable by the City. Key stresses to the system are: (1) weather impacts; (2) high overall
expense structure (was addressed through reductions in 2011); and (3) the trend toward
declining golf activity in this market. Despite these hardships, there are many positives within
the system that could help to improve its economic situation, including: (1) high quality of
facilities; (2) dedicated staff committed to doing all it can to improve performance; and (3) strong
basic market characteristics in Kitchener where the population has age and income
characteristics consistent with very high participation in golf.
The recommendations made by NGF for Kitchener Golf generally center on implementing new
actions to maximize economic performance under the present operational structure. Still,
despite the course of action recommended by NGF, the City of Kitchener should expect a "new
reality" in rounds and revenue performance that is not likely to return to levels experienced a
decade ago, but should exceed the levels currently being experienced in 2011. While the NGF
believes that enhancements to the present structure will offer an opportunity to improve
economic performance, this improvement must come from increases in revenue as any further
reductions in expenses could be harmful to the City golf system. Put simply, Kitchener Golf
cannot cut expenses any further without jeopardizing the overall integrity of the system.
If this new level of performance by the Kitchener Golf Enterprise is not acceptable to the City of
Kitchener, then the only alternative remaining for the City will be to seek some form of
privatization structure that involves turning the golf operation over to a fully private third-party
operator, where the risk of economic performance can be shifted away from the City and on to a
private entity. If privatization is sought, then the NGF recommended structure would be a hybrid
agreement that combines elements of the management agreement with a facility lease. While
this change will not guarantee economic improvement for Kitchener Golf going forward, it can
help to shift the risk of continued loss to a private sector partner.
The most important NGF recommendations for Kitchener Golf include:
1. Complete upgrades at Doon Valley GC to provide a "facelift" to the clubhouse.
2. Add a new tournament pavilion to Rockway GC and increase its parking capacity.
3. Adjust the green fees at Kitchener golf facilities to allow for separate pricing between
Rockway and Doon Valley.
4. Retain the existing low-expense golf maintenance structure.
5. Re-evaluate the terms of the golf professional contract to allow for pooled revenue to
then be divided between the City and golf professional.
6. If the present structure is not sufficient for the City, investigate the potential of
improved economic performance through a contract arrangement with a private
operator, including possibilities of involving the selected operator in investing in a
new clubhouse at Doon Valley.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 3
City of Kitchener Municipal Golf System
Overview
The City of Kitchener golf system comprises two separate facilities, each with separate revenue
components, all located within the City of Kitchener. The facilities and type are shown below:
Facility Type
Doon Valley 18 18-Hole Championship Golf Course
Doon Valley 9 9-Hole Golf Course
Doon Valley Driving Range Driving Range
Doon Valley Pitch & Putt 9-hole par-3 course
Doon Valley Clubhouse Food and Beverage Services with Banquet capabilities
Rockway Golf Course 18-Hole Mid-Length Golf Course
Rockway Clubhouse Food and Beverage Services with Banquet capabilities
In our review of the Kitchener Golf system, the NGF Consulting team found good quality golf facilities,
each serving a defined market niche and not necessarily competing directly with each other. These
two courses have been serving the City of Kitchener well for many years. Rockway, in fact, was built
as a depression-era work project back in 1935. Doon Valley opened as a privately owned facility 20
years later and was bought by the City in 1968. And unlike many, many municipal courses in today's
marketplace, these courses have been self-supporting since the 1980's and since the early 1990's
began paying significant dividends back to the City's General Revenue Fund (which is rare for
municipal golf). However, NGF does note that economic performance of the facilities was on the
decline between 2008 and 2010.
LOCATION AND ACCESSIBILITY ANALYSIS
Doon Valley Golf Course is located in immediate proximity to Highway 401 (a main controlled-access
freeway between London and Toronto), within two kilometers (km) from the 401 interchange with
Highway 8. Highway 8 is a main north-south arterial that runs through the heart of the
Kitchener/Waterloo/Cambridge area. Doon Valley is clearly visible from both sides of Highway 401,
with a large sign advertising the property. Although the facility has great ease of access, golfers
unfamiliar with the property may have trouble finding it the first time, as the property is hidden behind
Conestoga College. Additional signage may be helpful to direct golfers to the property.
Rockway GC is located proximate to the Highway 8 and Highway 7 interchange, within an open area
of Kitchener surrounded by mostly single-family residences. The Rockway Golf Course has a different
location profile with similar accessibility and entrance issues. The facility is bounded by dense
residential elements, and it is unclear as to the entrance when approaching the property from Highway
7/8. Some additional signage may be helpful to prevent golfers less familiar with the property to avoid
driving into the maintenance yard.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 4
Local Map Context
ORGANIZATION AND ADMINISTRATION
The City golf program is structured as an enterprise fund, which is common in municipal golf all across
the U.S. and Canada. The Kitchener system is structured within the authority of the City of Kitchener
Enterprise Division, which includes several enterprises in addition to golf such as the Auditorium
(Aud), Arenas, Cemetery Unit and Events Kitchener. To help offset recent declines in performance,
the City overhauled the golf operations administration by eliminating the manager's position for the
Golf Enterprise, placing the golf operations under the authority of another Enterprise Fund manager
who also oversees the Aud and other arenas.
Administrative Oversight
The basic structure of the golf operation is as follows:
• Reports through the City's Enterprise Division with the Community services Department.
• The Community Services Department is lead by the Deputy CAO and the Enterprise
Division is lead by the Director of Enterprise.
• The Golf operation is lead by a manager who also has responsibility for the Aud and
Arenas, and spends a portion of her time on the golf function.
Golf Related Facility Staffing
• The golf system now has one head golf professional (contract) and one superintendent
(City staff) to oversee the two golf courses.
• Superintendent -has two "Lead Hands" who are essentially assistants each responsible
for one course.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 5
• Head Professional - is a contract employee (one year contract with options for 2
additional one year terms):
^ Has a small retainer, with possible bonuses
^ Earns no City benefits
^ Owns the merchandise and pull cart concessions.
^ All Golf operations staff are the golf pro's employees
^ The City Reimburses the pro for payroll. As this amount is low fora 63-hole
operation the pro must use volunteers for positions that are usually paid
positions. While this does save money, it can contribute to poor customer
service as there is very little control over volunteers.
^ The golf professional and the City will divide the savings if payroll comes under
budget, while the City will absorb the expense if over budget due to extended
golf season only.
Administration Position -Each course has a seasonal full-time admin person,
representing a reduction of one per course from the previous year. Each reports directly to
the Manager.
^ They are primarily responsible for doing all the POS reports, counting money,
handling deposits as well as being responsible for catering and tournament
sales.
^ Compared to the private sector, these are relatively highly compensated
positions for the duties being performed.
^ At present, the "sales" portion of this position is almost exclusively "passive".
This means that the Administrators are waiting for the phone to ring as opposed
to being proactive and calling prospective customers.
• Starters and Rangers -The goal is to use starters and rangers at all times, although they
are currently used only weekends and twilight times. All starters and rangers are volunteers
who are granted certain golf playing privileges.
^ The starters and rangers are granted one free green fee for every four hours
volunteered. They must pay for use of a cart.
^ The compensations formula was recently changed, reducing the benefits (can
no longer play for free on weekend mornings). As a result, it has apparently
been more difficult recruiting volunteers.
Observations and Recommendations
• The Head Professional contract involves different revenue streams being commissioned at
different rates -not in the best interest of the City. NGF prefers a contract where ALL the
revenue is shared as opposed to situations where the pro gets 100% of some revenue and
0% of other. Also, the Pro's contract should provide an incentive to grow ALL revenue
streams to the benefit of both parties.
The two administrative functions -administration and sales -are not particularly
compatible. Further, we feel BOTH functions would be best reporting to the Head Pro
rather than enterprise manager. This would reduce the supervisory load on the Enterprise
Manager while facilitating better communication with the head pro. Typically, the
"administrative" side of this position, i.e., counting money, making deposits and completing
paperwork, is handled by pro shop staff rather than having a separate position for it. We
would then have an "incentive" (commission) attached to the sales position. The sales
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 6
position needs to be proactive not reactive. It is also possible that ONE person could
handle the sales for BOTH facilities. This would require a SINGLE telephone number for
sales.
GOLF OPERATIONS
As part of this consulting effort, NGF Consulting has observed very dedicated and hard working staff
members at all City of Kitchener golf facilities. All of the facilities are presently operating under
somewhat reduced staffing due to budgetary limitations, and are trying to get by with often very limited
resources. The City appears willing to put additional resources into the golf courses, provided these
resources are used to help improve financial performance and increase revenues.
To make matters more difficult, the City recently renovated the Doon Valley Golf Complex, adding
more debt to the golf operations. The renovation including adding 10 new golf holes to the 18-hole
course already existing, creating anine-hole regulation course from nine of the "old" holes, adding a
limited-distance driving range and creating anine-hole "pitch and putt" golf course.
A summary of the NGF review of City of Kitchener golf course operations in areas including golf
course maintenance, the POS system, marketing, fee structure, tee-time policies and the Golf
Academy is covered in the following section.
Golf Course Maintenance
Our initial impression of the course maintenance program at the facilities was very positive. The
courses appear to be an excellent condition, despite a reduced maintenance staff. A unique
procurement system that is self-funding has provided the courses with good equipment and a good
mechanic has kept them in good condition.
The Superintendent is further commended for his aggressive use of "green" measures for chemicals,
fertilizers, pesticides, etc. Specific issues noted by NGF regarding the golf course maintenance
include:
Carts: NGF noted several groups who would drive their carts right up to the greens, risking
damage to the green surround area. We recommend using signs and ropes to help keep
carts away from the greens. More aggressive ranger program will also help.
• Manpower: Doon Valley, with 36 greens to maintain, probably needs at least one more
staff member to keep course in good condition.
Water: We have some concerns about the water supply at Doon Valley. The number of
greens has been doubled, plus adding nine full-length fairways and a range, but the
amount of water permitted remains the same (325,000 gal/day). We fear that this will not
be adequate during adverse weather conditions. If the water supply at Doon Valley cannot
be increased, consideration should be given to installing a new, more efficient irrigation
system on the old holes. In general, the more sprinkler heads (modern systems), the more
efficient the system and the less water used as water would be applied only where it is
needed the most.
Point-of-Sale (POS) and Reservation Systems
Based on the NGF review, it does appear that there is some concern about the usefulness and
effectiveness of the City's Point-of-Sale (POS) and phone reservations systems. While a thorough
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 7
review of these systems is not under the scope of the present study, on the surface it appears to NGF
that there are concerns, including:
• Doon Valley POS: There are not enough point-of-sale stations at Doon Valley to handle
volume produced with three courses and a range. We recommend having at least three
POS stations.
• There is NO computerized reservation system for tournament and events. (There is one
available from Jennsys, but the City has not made this purchase.
• POS: People have not been trained properly, or use short-cuts on the system to speed up
the transactions. Some categories and items are not properly classified.
• Phone system: The phone system is old and lacks the modern conveniences a golf
course should have to provide the best customer service. These include:
^ Automated answer: There should be only ONE number to call for all golf
operations. The caller would then get an automated attendant that would direct
them to the proper extension (i.e. "dial one for tee-times, two for catering and
tournament sales; three for Rockway pro shop, four for Rockway grill, five for
Doon Valley pro shop... etc.)
^ Voice Mail: here should be voice mail at each extension to record calls when
there is no one available to answer.
^ Evening Service: Currently calls to the admin (which is the main number) go
unanswered after hours. These should be forwarded to the pro shop (if there is
not an automated attendant).
Kitchener Golf Marketing
The City's marketing department is handling all the marketing for the golf operations. They have only
recently started using the email database, utilizing an outside service to send out email blasts.
However, the database only has 1,000 names currently. NGF observations regarding the marketing of
City of Kitchener Golf facilities include:
• Email marketing is often the most cost-effective marketing available. However, it depends
on having a large email database. The City needs to encourage people to sign up for the
email program. There are several ways to do this, including:
^ Signup sheets in the pro shop.
^ Email sign-up online at the golf course websites.
^ Capturing emails when taking tee-times.
^ Coop Marketing - Doing a joint email blast with another sports related venue,
whereby you would email an ad for them to your list and they would do the
same for you. As a starting point this could be accomplished within other areas
of Enterprise.
• Budget: The current marketing budget is about $40,000 per year. While this is generous
compared to many municipalities, it may not be sufficient to cover 54 holes of golf, with
different target markets. There is no other expense that has a more direct impact on
revenue. We would suggest a marketing budget of $75,000/year.
• Social Networking: We understand that the City has placed a limitation on using
Facebook and other social networking sites. This policy should be reevaluated with respect
to the golf course. Social media is currently one of the strongest and most cost-effective
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 8
marketing media for golf. The key is to keep the Facebook page current. It essentially acts
like the webpage, only more concise. If the City cannot have a Facebook page, perhaps
the contractee (head pro) can maintain one.
• Negative Perception: There appears to be a lot of negative perceptions in the
marketplace about the Kitchener courses, including slow play and that the 9-hole course at
Doon valley are the new holes, rather than them being on the new course. As a result there
needs to be a lot of image building with the advertising.
Name Change: As part of the image building, we recommend naming the courses at Doon
Valley. For example, the nine-hole course could be named "Classic Nine at Doon Valley"
to help make it clear that it has nine of the original holes. The 18-hole course could be
named "Champions Course at Doon Valley" to create the image of a championship caliber
course to help appeal to lower-handicap golfers as well as a younger demographic. The
pitch and putt could be the "Short Course at Doon Valley". In this way, you can create a
clear separation of product and make it easier for the public to distinguish among the
courses.
• Golf Now: The City is starting to utilize Golf Now more, which we would encourage.
Website: The website for Kitchener golf appears to be appropriate, although we would like
to see more pictures of the courses and indications that the 18-hole course features ten
NEW holes. However, even the best website does little good if it cannot be found. While a
search for "Kitchener golf" results in the website being the first listed, a similar search for
"Waterloo golf", "Cambridge golf"; "Ontario golf", and "Toronto golf" failed to bring up the
website on any of the first several pages. In short, you have to be looking specifically for
this website to find it. We recommend the website be designed so that it will appear on all
the above searches in order to maximize its exposure.
NGF Commentary on Kitchener Golf Marketing
The NGF review of the Kitchener Golf marketing program shows the staff is placing emphasis in the
most appropriate areas that NGF industry research has shown can provide the most direct impact on
a high quality public golf operation. Website and direct email marketing have been shown to be the
most effective marketing at golf courses nationwide. The NGF has estimated that upwards of 90% of
all golfers get information about golf courses they are considering for play from the Internet. Other key
items to consider:
Trackable -The most effective advertising activities are ones that can be tracked, showing
effectiveness.
• Labor Intense -Social media marketing is growing in golf and should be used to
communicate with golfers who are NOT presently customers and drive them to learn more
about a property. Existing Kitchener customers should be communicated to via email. We
note that posting "tweets" in social media is time consuming and should be evaluated on a
regular basis to gauge effectiveness.
Print Is Not Dead -Although various forms of print media are less popular with golf
facilities in the Internet age, this area of golf marketing is not totally dead. Print media can
help raise brand awareness and promote the image of Kitchener Golf, even if at a quick
glance or to drive prospects to the Website for more information. Magazine ads and rack
brochures are still effective in the Toronto market and should be included in the facility's
marketing plan.
Historically, the Kitchener golf system was not heavily marketed. With the recent declines in business,
Kitchener Golf management has become more aggressive in an attempt to drive business onto the
golf courses. This is expected to produce better operating results in rounds and total facility revenue.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 9
Kitchener Golf Fee Structure
Key findings related to golf fees charged at Kitchener golf courses:
• The City sets rates and fees, but gives the manager flexibility to do some manipulation with
specials and yield management strategies. We agree with giving the manager flexibility
with rates. The more the better.
There was an $8 reduction in fees this year at both courses ($38/$48 to $30/$40). In
general, we feel reducing fees should be a last resort, which it may have been. As pointed
out in the competition section, Kitchener Golf is now among the lowest priced golf facilities
in the area. We feel there is a lot of room to increase fees, assuming that customer service
is improved as well. We also do not agree with pricing Rockway and Doon Valley the same.
We will discuss this more in the Discussion and Recommendations section.
• Yield management: While the manager has the flexibility to do more yield management,
we did not see a lot of effort in this direction. There were consistent gaps in the tee-sheet
that would ordinarily suggest a fee reduction for these times would be appropriate.
Alternatively, it may be that the fees are too low at the peak times. We would like to see
more analysis done for tee-time utilization and advance bookings.
Same Rate: As we will discuss further in the Discussion and Recommendation section, we
do not feel it is necessary or even a good idea to have the two courses priced the same.
• Student Green Fee Rate: NGF would implement a student green fee rate -good for
college students - at least at Doon Valley.
Tee-time Policies and Procedures
Tee-times can be booked in person, via the phone or online, up to seven days out. Currently, the vast
majority are being booked by phone, which ties up a lot of staff time. Tee-times start at 6:30 am on
weekends and 7 am on weekdays, and are set eight minutes apart.
• There appears to be a consistent gap midday at both courses. This can be addressed by
offering a discount to play at these times. However, these times should be monitored as it
will vary by time of year.
• In July and August, we recommend moving up tee-times 30 minutes as the early tee-times
are in the greatest demand.
• There is a strong perception that seniors and members take all the morning tee-times,
especially at Rockway. There is certainly an element of truth in this.
• The City should strongly encourage booking tee-times online. This would improve customer
service as staff would be spending less time on the phone and would be able to attend
customers at the course better. There are several ways of encouraging more online
bookings, including:
^ Promotion: Promote heavily booking online with signage in the pro shop and
on carts, and in all ads.
Incentives: Provide incentives to book online. The two most typical incentives
include financial (discounts for booking online) or timing (allow longer time lead
for booking online - 10 days as opposed to seven).
• There is an issue regarding no-shows. We understand that there may be 3-4 per day,
which is quite a few. There are several ways of addressing this, including:
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 10
^ Charging: Some facilities require all tee-times to be guaranteed by credit card
with anon-refundable charge. The green fee is then reduced by the amount of
the booking fee if the tee-time is booked online.
^ Walkups: No shows are only a problem if you do not have someone to take
their times. If you have people coming to the course without atee-time, creating
a "waiting list" to get on, then no-shows are not an issue. Walkups can be
encouraged by offering a "walk-up" fee that is cheaper than a reserved time (i.e.
you are charging for atee-time reservation).
Golf Academy
The Golf Academy at Doon Valley is a new venture this year. It seeks to bring new golfers to the
facility and to become a learning center for people in the area to take up the game -both adults and
children. The Academy is contracted out to Ryal Golf. The City receives 30% of the gross revenue
from the Academy. We certainly applaud the idea behind the Golf Academy and offer the following
suggestions to improve the impact for the academy:
Visibility: The biggest issue we have with the current setup for the academy is the lack of
visibility it has for golfers coming to Doon Valley. The office for the academy is located
upstairs, out-of-sight from the public. The building used by the academy is located below
the clubhouse and is not readily visible from the clubhouse or parking lot. There is also a
notable lack of signage throughout. Unfortunately the current clubhouse does not lend itself
well to housing the academy. However, we recommend that the academy be given a place
of higher visibility in any clubhouse renovations or rebuilding.
• Promotion: The Golf Academy should have its own website, which should be prominently
cross-linked with the Kitchener Golf website. The golf academy should be mentioned in
most ads (i.e. "Doon Valley, home of the Kitchener Golf Academy)."
• Packages: We would encourage the development of beginning golf packages that would
include a combination of group lessons, private lessons, range usage, and several rounds
of golf -all at a value price. These packages should be sold both through the pro shop and
through Kitchener Golf. If sold through Kitchener Golf, the City would pay a small
commission for selling the range and green fees.
• Merchandise: Although the City does not currently receive any revenue from merchandise
sales, it would be prudent for the Head Pro to recognize that the Academy instructors are in
a price position to recommend and sale merchandise. We would encourage them to
establish a relationship with the Academy and provide compensation for helping sell
merchandise.
• Organization: We would have the Golf Academy reporting to the Head Pro rather than to
Enterprise Manager to facilitate better coordination and cooperation between the entities.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 11
DOON VALLEY GOLF COURSE
Doon Valley has recently undergone some major improvements to the golf facility. It has added ten
new holes, while taking one out. In the process, it has reconfigured the course into two different
courses - an 18-hole course (with the 10 new holes) and a 9-hole course. A limited distance range
was added as was anine-hole pitch & putt course. At the same time, a golf academy (Kitchener Golf
Academy) was created. A review of each Doon Valley element follows in this section:
18-Hole / 9-Hole Golf Courses
Some NGF observations about the 18-hole regulation and 9-hole courses at Doon Valley include:
• The Doon 18-hole layout features a golf course without returning nines. This makes the
course less appropriate for nine-hole play. The Classic-9 at Doon can serve this market.
The 18-hole course integrates ten new holes with eight older holes. Unfortunately, the older
holes were not brought up to the standards of the new holes. This creates several issues
including:
^ Aesthetics: It just looks bad to go from new to old to new. The old holes are
made to look much worse than they are.
^ Maintenance: The greens have different grasses, requiring different
maintenance practices.
^ Playability: Better players are going to notice a difference between the old and
new greens, especially with green speed. Further, the character of the holes is
very different. This can confuse golfers. The new holes are a lot narrower and
tougher. The course received a lot of complaints when it opened. This caused
the City to widen some of the landing areas -which was a good move.
• New holes have double row irrigation, old ones have single row. This affects the
appearance of the older holes significantly as well as the watering efficiency
• The lack of irrigation creates some problems, particularly holes #6, #16 and #18.
• Some new holes have cart paths tee to green, while the older holes do not.
• Yardage is not marked on the sprinkler heads on the new holes. This adversely affects
pace of play as golfers are looking for yardage. It is also a customer service issue as
golfers desire to have yardage indicated. It's a small cost for a large benefit.
• There are no permanent restrooms on the 18-hole golf course. This is a significant issue as
many customers (especially women and seniors) want permanent restrooms, not
"portapotties." Unfortunately, the holes on the south side of the freeway are in a flood
plain, making it difficult to put in a restroom on that side. We recommend a permanent
restroom facility be built at a point closest to the bridge, where it could conceivably service
both the 18-hole and 9-hole courses.
Greens: The older greens have a mix of turf, including Poa Anna which is highly
susceptible to winter-kill. Some of the green complexes are very small.
Pitch & Putt
• Uses mats for tees, reducing maintenance costs.
• Signage needs to be improved, directing golfers to the next tee.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 12
• Holes were built too close to parking lot, as balls are being hit into parking lot. This creates
a safety concern and can result in property damage.
• Only takes 20 hrs/wk to maintain, leading to a low total expense on the operation, leading
to good profitability.
Practice Facilities
• The driving range is new, added in the last year along with the pitch & putt course.
• The range is short by modern standards. As a result, golfers must use limited flight balls.
However, there are no signs telling the golfer this is the case. This is a serious concern as
golfers are used to certain flight characteristics. They need to know the balls they are
hitting will not go as far.
• The yardage signs on the range should be removed due to unsightliness and they give
misleading information as they mark the actual yardage when they need to be indicating
the equivalent yardage for the limited flight ball.
• We recommend having a moveable sign on the tee that would give equivalent yardages to
each flag from that point. The sign can then be moved as the tee location is adjusted for
maintenance purposes.
• The range is small for a facility with three courses and a golf academy. There is potential
for moving 1st and 5th holes and making range larger.
Clubhouse
• There are many concerns with the Doon Valley clubhouse. The facility is older and
outdated, but also has serious functional inefficiencies and structural problems. Logistics
and aesthetics are poor.
• Inadequate kitchen, too small, with not enough equipment or storage. Kitchen really needs
to be expanded and renovated. There are no walk-in coolers/freezers, although temporary
facilities could be added outside.
• There is a large locker room upstairs (mostly wasted space) -connects with men's
restroom.
• The grill is not visible nor is it convenient from the pro shop. This is not only an aesthetic
issue, but it negatively affects F&B revenue and creates operational problems.
• There needs to be a sign directing people from the pro shop entrance to the grill and vice-
versa.
• The counter in the pro shop is too small and is not sufficient to handle the volume (only two
POS stations). Considering the presence of the range, pitch and putt and golf academy, the
facility would benefit from an expanded pro shop.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 13
ROCKWAY GOLF COURSE
Rockway is a relatively short course that is rich with history. As the City's oldest public facility, many of
today's area golfers grew up playing the course. It was also home to some notable golfers, such as
Moe Norman. Some NGF observations about the Rockway Golf Course:
• This short but challenging golf course appears to be a great facility to serve seniors, ladies,
juniors and beginners
• Golfers have to cross a busy road (Cortland), which is both a safety concern and
contributes to the slow pace of play. It is a long walk (400 yards) from hole #3 to #4 due to
crossing Cortland. This is a fixable problem. We understand that the City is getting ready to
do some major work on Cortland. This would be the ideal time to put a tunnel under the
road.
• Audubon Certified. The fact the course is Audubon Certified should be played up in both
advertising and notices around the clubhouse.
• Need better signage. There are several places around the course (particularly "spaghetti
junction) where it is confusing as to where to go. There is also little to no signage directing
golfers to the concession stand and washrooms. This is a customer service issue. A small
cost can pay large dividends.
• Greens. Rockway has old greens that have lots of poa, which is highly susceptible to
winter-kill (the course has lost six greens to winter kill). The greens are original and were
never rebuilt, except for #6 and #7.
• Tees. Some tees need leveling, and some are just too small, especially on par 3s.
• Traps. Rockway has a lot of sand traps on the course (46). The number of traps on the
course is inconsistent with the target market, which, because of length and history, would
tend to be seniors, juniors, women and higher-handicap players. Traps add difficulty,
increase maintenance costs and can slow down play. We recommend a gradual reduction
program to replace 1/3rd or more of the sand bunkers with grass bunkers. Hole #1 in
particular, has too many traps. Eight bunkers are "blind" to the golfer and should be
adjusted ("flashed") to make them visible, or eliminated. There are also drainage problems
on some of the bunkers.
• Fairways. There are several areas around the course that do not have irrigation, leading to
a large bare area in front of the 8th tee -eyesore (not irrigated).
• Irrigation. The irrigation system has been expanded in-house several times. However, the
expanded area is not hooked up to the automated system, requiring them to be manually
set each time. There are still significant areas on the course that do not have coverage.
Some of these areas are very much in play and create an eyesore. We recommend that
either irrigation be expanded to these areas, or have some of them converted to "natural
areas" requiring limited maintenance.
• Cart paths are incomplete. This creates several problems including:
^ Aesthetics; and
^ Course maintenance: Because of the senior dominated play, it is difficult to
restrict play to walking. This means that carts are being allowed on the course
when they should not be -causing damage to both the course and the carts.
The alternative is to lose revenue by banning the carts.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 14
Practice Facilities
• There is no driving range. There is a chipping area in the middle of the course. However,
there is no signage directing golfers to this area, nor is there any tee area set up. It
basically is an `insider' practice area.
• There are two large practice greens. Given there is no practice range, there may not be a
need for two practice greens and the space could be considered for other possible uses,
such as expanded parking and/or an outdoor tournament pavilion.
Clubhouse
• Rockway has a large clubhouse that was built in phases. This makes for some aesthetic as
well as operational issues.
• Rockway has very limited parking. As such, the facility has problems trying to host
clubhouse functions during golf season due to the limited parking.
• The facility includes a very nice banquet room with seating for about 140. There is also a
small private dining area (Moe Norman room) with nice `museum-like" features.
• There is a separate turn area (half-way house) to facilitate quick turns. It has limited
seating. This creates an operational issue as both the turn area and the restaurant need to
be manned.
• Deliveries are made to the basement, but there is no elevator or lift leading to a both a
safety and operational concern. We observed a worker carrying two boxes upstairs in such
a manner it would be difficult for him to see straight ahead. It would be very easy to
imagine a serious accident occurring on these narrow stairs. It obviously also adds time in
carrying things to and from upstairs.
PERFORMANCE
NGF Consulting has reviewed the Kitchener Golf financial reports and offers the following
observations regarding the economic performance of Doon Valley and Rockway Golf Courses:
Rounds Activity
• June and September are busiest months, and include most of the corporate
events/tournaments. Business falls off in July and August (due to holidays and heat).
• There is typically big gap in demand in the middle of the day at both courses.
• In 2011, April and May had lots of rain -only 5 days without rain in May.
• Since 2007, member green fees have fallen 35.9%, regular rate rounds have fallen 28.9%,
junior rounds by 60.8% and tournament rounds by 7.9%. However, twilight play has
increased by 51.4%, with a corresponding 80.6% spike in twilight revenue in 2009.
Economic Performance
• The golf operation pays the City an administrative fee, plus a dividend. The dividend is
mandatory regardless of profit levels. A number of years ago the City entered into a "level
playing field agreement" with the private sector to pay as a minimum the equivalent of
property and business taxes. The City golf unit has paid much more than that amount over
the years (around $1 million more over past 10 years).
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 15
• Net Profit: 2010 was the first year that the golf operation had a negative Net Profit (Net
Loss) of ($122,712). Both Rockway ($84,472) and Doon Valley ($35,240) lost money.
There has been a steady decline in performance starting in 2008. In 2007, the operations
combined for $355,446 net profit, which was an increase of $123,008 (52.7%) over 2006.
Since 2007, the combined operation has seen the annual Net Profit decline by $479,158.
^ Rockway has had the biggest decline, going from a positive $163,685 to a
negative ($84.472), for a negative net change of $248,157. Doon Valley went
from $192,781 NOI to a negative ($35,240), for a net change of $228,021.
^ Increased administrative expenses account for about 23% ($108,593) of the
change. In the past two years, capital fund contributions have increased from
$37,293 in 2008 to $271,303 in 2010.
Cash Flow: Cash Flow is the Net Profit plus contribution to the City and has declined every
year since 2008. In 2007, cash flow was ($119,457) including a $318,475 contribution to
the City. In 2008, the cash flow was ($177,881), including a $328,031 contribution. The
negative cash flow dropped to $343,787 in 2009 and $690,389 in 2010. Yet the
contribution to the City continued to increase each year, reaching $346,047. We certainly
do not understand why the contribution from the Golf Operations Fund would increase
when its cash flow is negative -and decreasing.
Net Operating Income: Net Operating Income or NOI, is a far better measure of actual
performance as it takes income and subtracts operating expenses, but does not count
capital expenditures or contributions to the City, which are reflected in the Net Profit and
Cash Flow above. And when we look at the NOI, a different picture emerges. Here we find
that the golf operation has remained profitable, even last year, when it had a positive NOI
of $104,983. However, NOI has declined each year since 2007, when it was $482,455.
Last year, the NOI declined $131,373, although the biggest decline was in 2008, when it
dropped $138,150.
^ Rockway had a negative NOI last year ($26,849), and has had a decreasing
NOI every year since 2007, when it was $208,825.
^ Doon Valley has been more of a roller coaster. Profit fell from $273,630 in 2007
to $162,439 in 2008, then rebounded to $167,099 in 2009 before falling to
$131,832 last year, although still remaining profitable.
• Revenue: Revenue peaked in 2007, with a total of $3,181,368. It has declined each year
since, reaching $2,928,013 in 2010. Over the last three years, revenue has dropped
$253,355, or 67% of the drop in the Net Operating Income.
• Golf Operations revenue declined $210,227 since 2007. It had increased slightly in 2009,
before dropping $100,600 in 2010. Rockway is the source of most of this decline, as
revenue has dropped steadily since reaching $1,127,391 in 2007. Since then, it has
dropped $208,962, including $106,608 last year.
• In 2009, golf revenues at Rockway fell 3.7% or $33,877, despite a 6.2% increase in rounds
(2,223).
• Membership dues have decreased 34.4% since 2007, showing that play has declined
pretty much across the board.
• Canteen Operations revenue has also declined, going from $939,289 in 2007 to $896,161
in 2010. Again, Rockway was responsible for the decline as its revenue has dropped
$64,621 during this period. Doon Valley, in fact, increased revenue by $21,493.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 16
• Expenses: While revenues have been declining, expenses have been increasing, a bad
combination. Since 2007, expenses have increased by $129,644. This increase has
occurred over the last two years, going up $76,077 in 2009 and $58,586 in 2010. This time,
Doon Valley has been responsible for the increase, as it has seen its expenses rise by
$158,562 since 2007, while Rockway has trimmed $38,923.
• Course Operations expenses, which primarily are course maintenance, have increased
$150,977 since 2007, going from $1,075,975 to $1,226,952. Doon Valley accounts for most
of the increase as its expenses have gone up $145,477; with most of this increase
($111,884) occurring last year with the dramatic increase in the number of golf holes being
maintained, with 18 more greens being added.
• Canteen Operations expenses actually decreased $28,240 over the last three years and
have declined every year since 2006. The decrease has all come from Rockway, as Doon
Valley's expenses have actually gone up $10,805 in the last three years.
• Admin Expenses have gone up just $6,907 over the past three years, although last year
admin expenses decreased by $38,087.
In short, we saw a steady and significant decline in performance from 2008 to 2010, sparked mostly
by a general decline in rounds -especially at Rockway. Expenses have largely stayed the same
during this period, with the exception of the expected increase in course maintenance expenses at
Doon Valley resulting from the expansion of the golf facility.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 17
FOOD AND BEVERAGE OPERATIONS
A big change took place in 2011 when the food and beverage operation at both facilities was
contracted out to Compass under cone-year agreement. The contract is favorable to the City as it
gives the City 15% of the gross revenue, an amount greater than what the City has realized from the
operation when it was self-managed. The NGF team had the opportunity to meet with the Regional
Manager for Compass as well as the Executive Chef in charge of the food and beverage operations at
the two courses. Some NGF observations regarding food and beverage services at Kitchener golf
facilities include:
• Compass also operates the F&B venue for Conestoga College, directly across the street
from Doon Valley. This may explain why the managers we spoke with from Compass
appeared reluctant to want to go after more college business. Keep in mind that Doon
Valley used to do considerable lunch business at least two days a week (Wednesdays and
Fridays) from the college.
• Both facilities have food and beverage operations that could do considerably more outside
(non-golf) business -both in terms of dine-in business and banquets/outings. Rockway is
well located to get business lunch traffic as well as some residential business. Doon Valley
is positioned to get business from the college staff and students as well as area residents.
The key is marketing to these markets.
• The City also gets revenue from sponsorship agreements such as Pepsi and Molson's and
this revenue accrues directly to the golf enterprise.
• There appears to be problems at both facilities with consistency, both in terms of food
quality and service. Some of these issues no doubt were due to a learning curve.
However, some problems persist.
• Menu: There may be opportunity to enhance the food service menus at each facility.
Compass management seems to manage operations efficiently, but may not be serving the
needs of golf customers, especially seniors who are seeking smaller portions and lower
prices (i.e. '/2 sandwiches). We would also point out that selling half-sandwiches are more
profitable as you charge more than '/2 the cost of the whole sandwich, but the food cost is
half. Having smaller portions available will definitely be popular with seniors.
• There also have been allegations of "unprofessional" behavior with F&B employees -such
as arguing and smoking in public areas. NGF consultants were told that there is rarely, if
ever, a supervisor present for Compass at catered events to handle problems that
inevitably arise.
Beverage Cart/Concession Area: The concession stand does not open at Rockway until
11 am, when it can start serving beer. Beverage cart service is limited and usually does not
begin until after 10 at either facility.
Water: There is one water fountain at Rockway and two at Doon Valley on the course
which is not enough in the opinion of the consultants. The combination of no beverage cart
and limited access to water for players in the morning is both a customer service and a
safety concern. With golfer teeing off at 6:30, several groups will be able to play nine holes
(or more at Doon) without the availability of water. In summer, with higher temperatures,
dehydration is a big concern. We would strongly recommend at least having water
available to golfers at all times. This can be done in several ways:
Water Coolers: Having water coolers placed every three holes around each
course. These would be placed and filled by the maintenance crew in the
morning, but should be serviced by the rangers during the day.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 18
^ Beverage Cart Service: Extending the hours of the beverage cart, which would
also generate more revenue. We would also consider having a water cooler
attached to the beverage cart that would provide free water. This would be
viewed as a customer service issue and would get golfers used to utilizing the
beverage cart.
^ Rangers: Having water coolers attached to the ranger carts. Of course this
assumes that the rangers will be on duty starting early in the day and working
until near dusk.
ROCKWAY SUMMARY
As we have noted, there are facility issues that may be preventing increased concession revenue
performance at Rockway. The most pressing include:
• Outdated Restaurant Area: The restaurant area is overdue for a facelift to make it more
appealing, leading to increased sales.
• Parking: The limited parking makes it difficult to host anon-golf banquet while the golf
course is open.
• No elevator: The lack of an elevator creates an operational and safety issue for staff.
All of these issues are fixable, but will require some investment. In addition, we recommend building a
covered tournament pavilion to host outings outdoors. The pavilion, which could be located near the
clubhouse and 18th green, should include:
• Seating for at least 120
• Ceiling fans
• Restrooms
Because theft of outdoor furniture has been an issue at the facility, having the pavilion partially
enclosed with lockable shutters may be prudent.
DOON VALLEY SUMMARY
Again, the clubhouse facility at Doon Valley appears to be a major factor in limiting economic
performance. Among the issues for the Doon Valley clubhouse:
• Need larger kitchen and walk-in coolers
• More storage area.
• Need an area to service golfers making the turn from the 9t" green to 10t" tee.
The latter issue is currently being handled by stationing a beverage cart on the course. There is also a
BBQ area that services both the 9-hole and 18-hole courses. However, these areas are not
consistently manned. We recommend that the hours for the stationary cart be extended as this is a
customer service issue more so than a profit center.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 19
GOLFER SURVEY
In 2011, the City of Kitchener conduced two surveys of golfers, with one survey each for members and
green fee players. The surveys were conducted in October of 2011, two months after the NGF field
visit. A total of 78 green fee players and 67 members responded to the survey, offering opinions about
the overall quality of the Kitchener golf facilities and suggestions for improvement. The results showed
that Kitchener gofers are generally satisfied with the City's golf courses and would like to see some
improvement in the facilities. A summary of responses is shown below:
Summary of Survey Responses
The survey responses were divided between members and daily fee players, and further divided
between opinions of Rockway and Doon Valley. A summary of all results include:
• Both green fee players and members indicate they are "very satisfied" with the golf course
conditions, golf course design, the overall value and the overall experience at both
facilities.
• Golfers indicated that "pace of play" was problematic at Rockway more so than Doon
Valley.
• Both groups of golfers tended to be less satisfied with the food and beverage operations,
hoping for improvement in this area at both Rockway and Doon Valley.
• In addition to recommendations for improvement of the food and beverage operations,
there were some other suggestions for improving the physical condition of both golf
courses, including greens, tees and fairways. The New 18 course at Doon Valley seemed
to garner the most criticism.
• Improving starters and marshals was also a common recommendation, with golfers hoping
this would improve pace of play.
• The demographic profile of the small survey group was varied, with the member group
being predominantly male (85%) and older (77% over 50). The green fee player survey
was predominantly female (82%) and had 66% of respondents over 50 years of age.
• Despite the variance of survey groups between the members and green fee players, the
results, opinions and recommendations were very similar.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 20
SUMMARY -CITY OF KITCHENER MUNICIPAL GOLF OPERATIONS
The Kitchener municipal golf system appears to be a good quality municipal golf system with
many parts that each have unique features, but appear to work well together. The Doon Valley
Golf facility includes outstanding amenities at a desirable location, capable of becoming a
regional draw. Rockway GC includes golf facilities appropriate for high volume and high appeal
to less-skilled golfers seeking a shorter length golf course.
The management and operation of the Kitchener Golf courses appears to be professional, and
NGF observed that the City Enterprise management team has worked hard to reduce the cost
of operation in recent years in order to maintain profitability. The recent changes to the system,
including the reduction in personnel, do not appear to have damaged the quality of the facilities
to any degree lessening the appeal. The present City-employed management team has been
moderately active in marketing the facility in an attempt to attract new players, although greater
emphasis on marketing and promotion strategies will be required to improve revenue at these
facilities.
In looking to the future of these golf facilities, the City of Kitchener may have to consider making
some modest investment into the properties to help stimulate greater revenue and/or reduce
expense. The golf system in Kitchener may be in a position where the City will have to spend
some money in order to make more money. Specifically, upgrading the Doon Valley golf
courses and adding additional tournament space and parking to Rockway will help to grow
revenue streams. A full renovation or replacement of the Doon Valley clubhouse appears
warranted, but the large investment may prevent the City from taking this action. One option for
the City to consider would be to attract a private partner for this investment, perhaps in
exchange for along-term lease or operations contract on the golf courses (more later in this
report).
Winter Operations
The winter operations program is appropriate for the City of Kitchener. The golf system has
transferred some full-time employees to other functions and reduced winter administrative, sales
and marketing operations to one clubhouse (Rockway) during the winter. The full time
assignment period for administrative staff has also been reduced for winter operations. It is
appropriate for golf facilities in the Ontario climate to have some level of winter operations. The
senior office staff is planning for the upcoming year (business, marketing, budgets) as well as
overseeing clubhouse operations. The maintenance staff is working to get the course ready for
season and repairing equipment. It is not likely that the City can earn significant savings in this
operation with any additional change to this system.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 21
External Factors Affecting
the Kitchener Municipal Golf Operation
To appropriately assess the activity levels and potential market opportunities for the various
elements of the Kitchener municipal golf operation, the environment in which the golf facilities
operate must be understood. Therefore, it is helpful to examine local economic and
demographic trends, as well as other factors, that have the potential to impact rounds played
and revenues earned. This overview will include a brief review of the area's demographics, the
local economy, a review of golf demand /supply, and an overview of competing public-access
golf facilities in the greater Kitchener /Waterloo area.
DEMOGRAPHICS /ECONOMIC SUMMARY
From the data collected for this study, NGF Consulting has made the following observations
regarding the Kitchener /Waterloo area:
• The City of Kitchener continues to grow. Population in 2011 is estimated at 223,410,
growing to 265,555 by 2021 (1.7% annual growth).
• The greater Waterloo / Kitchener metro region had an estimated population of
478,121 in 2006, growing to 522,490 in 2011. Projections for 2021 show 619,240
residents in the metro area.
Average household income in Kitchener totaled $80,600 in 2009, considerably
higher than the Province of Ontario figure of $67,371, indicating a higher proportion
of upper income residents. In general, higher income residents are more likely to
participate in golf, and they play more frequently than lower income golfers. Thus the
local Kitchener market area appears favorable for high golf participation and activity,
when compared to other regional markets.
Economic Overview
In addition to identifying trends in golf course demand and supply, NGF has examined certain
economic indicators and other mitigating factors that have the potential to affect the
performance of the City of Kitchener golf courses. It is unclear what effects the troubled regional
and national economies will have on activity levels at public courses. On one hand, decreased
discretionary income and the plunging values of many stock portfolios, retirement accounts, and
homes will almost certainly cut down on recreational /leisure spending. However, interviews
with area golf operators indicate that golfers are either playing less or shifting play patterns to
less expensive rounds, which actually could benefit lower price point municipal golf courses.
Waterloo Region
• The Toronto area climate is "continental" and typical of the upper Midwest United
States. Winters are cold and dry, while summer is hot and humid. The South Ontario
area is sometimes subjected to cold Arctic air masses, especially during the months
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 22
of January and February. As a result, golf activity is generally concentrated in the
mid-April through October season each year.
• Other facts about the Waterloo Region are shown below. The shorter
commute, lower cost of living and the presence of several large employers are
viewed as favorable for continued operation of municipal golf courses in the
region.
^ In the 2006 Census, Waterloo Region had 478,121 residents.
^ Post-secondary students number about 55,000, including 8,500 full-time
and 4,000 apprenticeship students at Conestoga College Institute of
Technology and Advanced Learning, 30,000 at the University of Waterloo
and 12,400 at Wilfrid Laurier University.
^ Among the region's major employers are Sun Life Financial, Manulife
Financial, Toyota Motor Manufacturing, Automation Tooling Systems
(ATA), Babcock & Wilcox, and Research in Motion.
^ More than 400 high-tech firms operate in Waterloo Region. In addition to
RIM, the list includes Descartes Systems, Open Text, Maplesoft, Dalsa,
MKS and more.
^ On the Ontario Cost of Living Index, with Toronto at 100 as the baseline,
Waterloo Region is 73.8.
^ The average home price in Kitchener-Waterloo in 2007 was $252,429. In
Cambridge the average was $242,752.
^ More than 80 per cent of workers live less than 30 minutes from their
workplace.
^ Some 42 per cent of commuters travel less than five kilometers to work;
9.2 per cent travel more than 25 kilometers.
GOLF MARKET SUPPLY AND DEMAND INDICATORS
The basic measures of golf demand and supply that may affect the performance of City of
Kitchener golf courses are outlined below.
Local Golf Demand and Supply
The methodology for determining the relative strength of the subject market is based on ongoing
NGF research of American golf participation habits. Golf participation in the neighboring U.S.
market of Buffalo -Niagara Falls is used as a "reasonable proxy" for golf participation in
Southern Ontario and the Waterloo Region in particular. The NGF Golf Demand Model includes
the critical combination of age and income, regional seasonality, and available golf course
supply, as well as existing and emerging demographic trends in a particular market area. This
model can be used as a benchmark for estimating potential market strength in a particular area.
The results of this survey allow NGF to make accurate predictions concerning demand,
participation, and golf spending. The results for the local areas are posted below:
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 23
Golf Demand and Supply Estimates (2011)
Buffalo -Niagara MSA
City of Waterloo (Benchmark for
Kitchener Region Comparison)
Number of golfing households 27,926 65,311 85,365
Projected number of rounds played 614,378 1,436,848 1,598,301
Total Golf Facilities N/A 75 59
Total Golf Holes N/A 1224 1,008
Household Supply Ratio" N/A 3,534 8,353
Golf Households per 18 Holes N/A 960 1,524
Rounds per 18 Holes N/A 21,130 28,541
U.S. Standard is 7,733 households per 18-holes.
Key notes from the above table include:
• The supply of golf facilities is much higher in the Waterloo Region than in
neighboring Buffalo, in direct proportion to the population. The Waterloo Region has
fewer than one-half the number of households available to support each golf course
in the market.
• In order to support the additional supply, the Kitchener /Waterloo population must
play considerably more rounds per golfer to maintain comparable facility support.
• NGF estimates for golf participation and rounds played in the Waterloo Region are
based on NGF research on golf demand and rounds played in the Buffalo-Niagara
MSA, adjusted upward to reflect higher demand in southern Ontario.
COMPETITIVE GOLF MARKET
NGF Consulting has analyzed the public access golf market in the local Kitchener market area,
with particular emphasis on determining the facility's current market position and prospects for
sustaining and/or building market share in the future.
NGF confined its focus to public golf courses in the immediate market area that are likely to
have the greatest impact on play at Kitchener Golf facilities. For this study, we defined the local
market area as being any facility within 25 km of either Rockway or Doon Valley. Further, we
are interested mostly in regulation length facilities as opposed to Par 3 courses or short
executive length courses. These tend to have a different market than regulation length courses.
There are 33 golf courses in this Local Area. Of these, five are private clubs, which are not
viewed as significant competition to the City's courses. Another five are either Par 3 or
executive length courses. This leaves 23 regulation length public courses in the Local Area,
including the two City courses. A summary of these courses can be found in the tables shown
on the following pages.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 24
Competitive Assessment Review -Local Market Competitors
Course
City
# Holes
Type
Par Year
open
Architect
# Tees
Ariss Valley Golf &CC Ariss 27 DF 70 1992 3
Beaverdale Golf Club Cambridge 18 DF 67 1962 2
Brant Valley GC St. George 18 SP 72 1990 2
Brookfield CC Cambridge 27 SP 68 1965 3
Cambridge GC Cambridge 18 DF 72 1963 Robbie Robinson 4
Conestoga CC Conestoga 27 SP 71 1968 3
Doon Valley 18 Kitchener 18 MU 72 1955 Bob Moote 3
Doon Valley 9 New 9 MU 70 2010 3
Dundee Country Club Dundee 18 SP 71 1970 Tony Matlock 3
Elmira Golf Club Elmira 9 SP 70 1963 4
Foxwood Golf Club Baden 27 SP 70 1983 3
Grand Valley Golf &CC Cambridge 18 DF 70 1981 2
Grey Silo Golf Course Waterloo 18 MU 71 2001 Steve Young 4
Guelph Country Club Guelph 9 SP 72 1912 5
Guelph Lakes GC Guelph 18 DF 71 1998 David Moote 4
Puslinch Lake GC Cambridge 18 DF 70 1962 Ernie Robb 2
Rebel Creek GC Petersburg 18 SP 72 2002 Alan Chud 5
River Edge Golf Course Kitchener 9 DF 70 John Robinson 4
Rockway Golf Club Kitchener 18 MU 70 1935 Stan Sharpe 3
Saginaw Golf Club Cambridge 9 DF 70 2
Savannah Golf Links Cambridge 18 DF 71 1998 David Moote 4
Springfield Golf & CC Guelph 18 SP 70 1989 John Robinson 3
Victoria Park East GC Guelph 18 MU 71 1974 Rene Muylaert 4
Averages 17.6 23 70.5 1974.9 3.3
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 25
Golf Course Yardages and Slope Rating
Course Back Slp Champ Slp Middle Slp Senior Slp Forward Slp
Ariss Valley Golf &CC 6,388 5,899 5,213
Beaverdale Golf Club 4,750 112 4,750 4,195
Brant Valley GC 5,493 105 5,493 105 4,443 93
Brookfield CC 5,396 5,113 4,814
Cambridge GC 6,373 122 6,056 116 5,559 110 5,128 111
Conestoga CC 6,301 5,662 5,120
Doon Valley 18 6,386 125 5,748 115 5,079 102
Doon Valley 9 5,688 114 5,308 112 4,842 114
Dundee Country Club 6,357 124 5,937 120 5,384 121
Elmira Golf Club 6,274 125 5,796 120 5,436 115 5,185 122
Foxwood Golf Club 6,150 127 5,631 127 4,845 127
Grand Valley Golf &CC 5,433 5,433 4,785
Grey Silo Golf Course 6,532 131 6,081 128 5,653 126 5,197 124
Guelph Country Club 6,044 5,968 5,466 5,356
Guelph Lakes GC 6,454 136 6,004 122 5,581 118 4,876 118
Puslinch Lake GC 5,294 99 5,294 99 4,847 111
Rebel Creek GC 6,942 139 6,460 129 6,040 126 5,569 123 5,157 118
River Edge Golf Course 5,684 121 5,232 4,624 4,188
Rockway Golf Club 5,531 112 5,286 109 4,973 112
Saginaw Golf Club 5,600
Savannah Golf Links 6,213 131 5,833 130 5,463 128 4,868 113
Springfield Golf & CC 5,682 119 5,345 111 4,503 107
Victoria Park East GC 6,452 121 6,079 117 5,521 114 5,248 111
Averages 5,975 121 6,460 129 5,636 117 5,430 119 4,920 114
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 26
Green Fee and Banquet Information
Driving
Range Banquet Green Fees
Course Cart Weekday Friday Weekend Twil WD Twil WE
Ariss Valley Golf &CC $16.00 $43.00 $43.00 $54.00 $32.00 $32.00
Beaverdale Golf Club No 180 $17.00 $29.00 $29.00 $31.00 $22.00 $20.00
Brant Valley GC yes $17.00 $32.00 $32.00 $34.00 $23.00 $22.00
Brookfield CC No 150 $17.00 $38.00 $38.00 $43.00 $30.00 $25.00
Cambridge GC Yes 150 $18.00 $43.00 $43.00 $55.00 $33.00 $43.00
Conestoga CC yes $17.00 $49.00 $56.00 $56.00 $36.00 $32.00
Doon Valley 18 yes 150 $16.75 $30.00 $30.00 $40.00 $19.75 $19.75
Doon Valley 9 $19.75 $19.75 $19.75
Dundee Country Club Yes 200 $17.00 $45.00 $50.00 $50.00 $32.00 $32.00
Elmira Golf Club Yes 140 $16.00 $44.99 $44.99 $52.99 $34.99 $39.99
Foxwood Golf Club Yes $17.00 $45.00 $45.00 $50.00 $32.00 $32.00
Grand Valley Golf &CC No $16.00 $30.00 $32.00 $36.00
Grey Silo Golf Course Yes $17.00 $65.00 $65.00 $72.00 $52.00 $48.00
Guelph Country Club No 150 $35.00 $35.00 $35.00
Guelph Lakes GC Yes 150 $16.50 $57.25 $47.25 $58.00 $26.50 $26.50
Puslinch Lake GC No 100 $17.50 $40.68 $40.68 $47.46 $33.90 $33.90
Rebel Creek GC Yes 200 $17.00 $55.00 $55.00 $83.00 $45.00 $73.00
River Edge Golf Course No $17.00 $42.00 $44.00 $44.00
Rockway Golf Club No 120 $16.75 $30.00 $30.00 $40.00 $19.75 $19.75
Saginaw Golf Club No 80 $16.00 $27.00 $27.00 $30.00
Savannah Golf Links No 200 $37.14 $37.14 $45.71
Springfield Golf & CC No 200 $16.00 $46.00 $46.00 $56.00 $34.00 $34.00
Victoria Park East GC Yes 220 $11.00 $65.00 $71.00 $75.00
Averages 159.3 $16.48 $41.25 $41.77 $48.17 $31.62 $33.31
Competitive Facility Observations:
9-hole courses: Five of the 23 courses have only nine-holes. These tend to perform
more poorly than comparable 18-hole courses as most golfers prefer playing 18
holes and do not want to repeat the same holes. However, there is a strong and
growing market of golfers who prefer playing only nine-holes, usually because of the
time, but sometimes because they are often easier. These golfers tend to be seniors,
women and higher-handicap players. The nine-hole courses can be viewed as direct
competition for the Doon Valley 9.
• 27-hole courses: Four of the facilities (Ariss, Brookfield, Conestoga and Fox Valley)
operate true 27-hole facilities. This means that the three nines are interchangeable,
creating three different 18-hole arrangements, as opposed to Doon Valley, where
there is only one 18-hole configuration and one 9-hole configuration. The former has
an advantage in being able to attract larger tournaments, accommodate more 18-
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 27
hole golfers, and providing a greater variety for the golfers. It is also better for
maintenance as during slower days, one nine can be "rested"
• Golf North: Golf North owns or operates seven of the 23 courses, making it the
dominant force in the marketplace (more later in this section).
Age: The golf courses average 27 years in age. This is notable as golfers tend to
prefer newer courses. The two newest courses, Rebel Creek and Grey Silo, also
appear to be the most successful from our casual observation. Doon Valley 9 is
listed as being newer, but that is misleading given the golf holes that comprise it
come from the original 18-hole course. This fact has strong implications for the Doon
Valley 18-hole course, which should be considered the newest course in the area.
Tees: The courses average having 3.3 tees per hole. Typically, the more tees, the
wider the appeal the golf course will have as it will be able to better accommodate
golfers of differing abilities. All three Kitchener courses have three sets of tees, which
was the standard thirty years ago. Today's modern courses typically have five sets of
tees. Kitchener courses are at a competitive disadvantage to the nine courses that
have more than three tees.
Back Yardage: The distance from the back tee is extremely important in golf, and
not just as a way of accommodating lower-handicap golfers. The back tee is one of
the few statistics (along with par) that are routinely associated with a golf course in
all the media. Further, golfers tend to correlate the back tee distance with "quality"
due mostly to the media attention. The modern standard for golf courses is 7,000
yards. Courses that do not reach this distance are often referred to by media as
"short" courses, even if they are 6,700 yards long. This creates a negative stigma
about the course that makes it seem "inferior." Notably, none of the Local Area
courses measure 7,000 yards, suggesting a marketing opportunity. The average
length from the back tees is 5,975 yards, which is shorter than the most commonly
preferred distance. Over 50% of the golf market tends to use tees that measure
between 6,000 and 6,500 yards in length. Lower handicap golfers prefer courses that
are over 6,500 yards in length. Seniors tend to prefer to play from 5,200 to 5,750,
while most women prefer playing less than 5,000 yards.
Only two area courses, Rebel Creek (6,942) and Grey Silo (6,532) are
over 6,500 yards in length. As noted above, lower-handicap players
prefer playing over 6,500 yards. Further, lower handicap players tend to
be the preferred demographic for golf as they tend to be younger, play
more golf and have more money to spend. This strongly suggests an
opportunity as Doon Valley's 18-hole course can easily be lengthened to
over 6,500 yards and allow it to attract this important market segment
^ Rockway is at a significant disadvantage at 5,541 yards, in attracting
younger male golfers. This is why Rockway is dominated by senior play.
Forward Tees: The forward tees are the ones most used by women (and used
mostly by women). On average, women hit the ball 80% as far as men. So a 6,000
yard course for men is equivalent to 4,800 for women. Courses over 5,000 yards in
length from the forward tees are difficult for women and those over 5,200 yards are
the equivalent of 6,500 for men -which is attractive only for the lower handicap
players. Four of the Local area facilities have yardages over 5,200. All three
Kitchener courses are in a good range for women.
Driving Range: Only 11 of the courses have driving ranges. This is important for
several reasons:
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 28
^ Revenue: Ranges are a good source of revenue, adding an average of
$1/round
^ Marketing: Ranges are attractive to players, particularly lower handicap
players who typically like to "warm-up" before a round
^ Teaching: Ranges are essential to teaching golf. Notably, studies have
shown that golfers tend to be loyal to the facility where they learned the
game (which may help explain Rockway's popularity). Doon Valley has a
good marketing opportunity with its new range.
^ Tournaments: Tournaments prefer having a range available for the
golfers to warm up. Facilities such as Rockway are at a significant
disadvantage in attracting tournaments without a range.
Cart Fees: The average cart fee is Kitchener's $16.75 is in line with the competition.
Notably, it appears customary in the area to charge a higher fee for singles than for
carts with two riders. While this makes logical sense, experience in the US shows us
that this is not only confusing to golfers, but can be a significant deterrent, especially
to golfers who tend to play alone. We recommend a policy of charging'/2 cart fee to
singles as well as those who share a cart.
• Green Fees: The average weekday green fee is $41.48. Only TWO facilities charge
less than Kitchener's $30 (Beaverdale at $29 and Saginaw at $27). The most
expensive facilities are Grey Silo and Victoria Park East at $65 each, followed by
Rebe Creek at $44. There would appear to be considerable room to increase
fees, particularly at Doon Valley.
^ Weekend Rate: The average weekend rate is $48.39. Six facilities are
less expensive than Kitchener (Saginaw [$30], Beaverdale [$31], Brant
Valley [$34], Guelph CC [$35], and Grand Valley [$36])
^ Twilight Rates: The average twilight green fee was $31.62. Kitchener
courses had the least expensive twilight rates at $19.75. The next lowest
was Beaverdale at $22. Several of the facilities had two twilight rates, one
beginning around 1-3 pm and another around 5.
Membership: The average rate for an annual single membership was $1,828.
Kitchener's $1,395 is over $200 cheaper than the next lowest, (Puslinch at $1,600).
Golf North offers four different membership levels. Their "Players Club" allows
unlimited play at their lower tier courses (including Beaverdale and Brant Valley);
Players Club Plus adds a couple more facilities, including Brookfield. Platinum adds
a few more while Diamond includes all their clubs including Grey Silo, Dundee,
Foxwood, and Conestoga.
^ Breakeven: If you divide the membership fee by the daily fee rate, you
get the break-even point. The average break-even point was 43 rounds,
ranging from 35.83 at Kitchener's courses to 53.26 at Springfield golf and
52 at Guelph Country Club.
^ While 35 is the lowest average for the area courses, it is consistent with
the average we see across all facilities.
Area Golf Course Ratings
NGF utilized two different golf guides that provided user ratings to aid in our understanding of
golf facility quality in the Kitchener /Waterloo Region. The ratings sources used were online golf
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 29
course rating services - scoregolf.com and ontariogolf.com. These ratings are not scientific and
generally based on golfer opinions recorded over a period of several years. These rating are
used by NGF to provide a general idea of relative quality. A summary of the ratings is shown in
the tables below, followed by some NGF comment.
Membership Ratings Scoregolf
Course Single Couple Overall # raters Overall Service Pace Value Layout Greens Facilities
Ariss Valley Golf &CC $1,900 $3,610 5.0 1 6.0 4.7 7.0 5.3
Beaverdale Golf Club PC 3.7 15 2.7 3.0 8.3 4.0 3.0 4.0 3.0
Brant Valley GC PC 4.0 5 4.0 5.0 4.0
Brookfield CC PC+ 4.0 9 7.0 7.8 9.3 7.3 3.0 3.0 3.0
Cambridge GC $1,995 $2,995 4.3 7 4.5 4.3 7.2 5.8 3.3 4.0 3.3
Conestoga CC D 4.1 9 7.0 6.8 6.8 6.8
Doon Valley 18 $1,395 $2,665 2.7 6 2.0 3.0 3.0
Doon Valley 9
Dundee Country Club D 4.3 6 6.5 4.0 7.5 5.5
Elmira Golf Club $1,975 $3,358 4.1 13 6.7 5.0 7.0 7.0
Foxwood Golf Club D 4.0 12 6.0 6.0 8.0 6.0
Grand Valley Golf &CC 3.7 14 5.0 4.0 5.0 4.0 5.0 5.0 4.0
Grey Silo Golf Course D 4.0 10 7.3 6.8 6.8 7.4
Guelph Country Club $1,820 4.0 1 5.0 4.5 7.0 5.0
Guelph Lakes GC 4.8 11 6.7 6.3 7.7 7.3
Puslinch Lake GC $1,600 $2,500 4.0 13 3.7 4.7 7.7 3.7 4.0 1.0 3.0
Rebel Creek GC 4.9 12 6.1 7.0 7.3 6.1
River Edge Golf Course 3.7 14 7.0 5.0 8.0 5.0 4.0 4.0 4.0
Rockway Golf Club $1,395 $2,665 4.3 6 6.0 4.7 6.0 6.0 2.0 2.0 1.0
Saginaw Golf Club 4.0 2 nr 3.0 3.0 2.5
Savannah Golf Links 3.9 15 7.1 6.3 6.6 7.7 4.0 5.0 3.0
Springfield Golf & CC $2,450 $3,975 4.2 5 7.0 8.0 6.5 8.0
Victoria Park East GC $2,560 3.5 2 7.3 7.0 6.3 7.7
Averages $1,899 $3,109 4.1 8.5 6.0 5.6 7.2 6.1 3.4 3.5 3.1
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 30
Course
overall ontgolf.ca
Conditions
Pace
Value Play it
again
Ariss Valley Golf &CC
Beaverdale Golf Club 3.0 3.0 2.0 2.0 y
Brant Valley GC 5.0 5.0 4.0 5.0 y
Brookfield CC 2.0 3.0 4.0 4.0 n
Cambridge GC 3.3 3.7 3.3 3.7
Conestoga CC
Doon Valley 18 2.0 2.0 3.0 2.0 n
Doon Valley 9
Dundee Country Club
Elmira Golf Club
Foxwood Golf Club
Grand Valley Golf &CC 5.0 5.0 4.0 5.0 y
Grey Silo Golf Course
Guelph Country Club
Guelph Lakes GC
Puslinch Lake GC 3.0 3.0 2.0 4.0 y
Rebel Creek GC
River Edge Golf Course 4.0 4.0 3.0 4.0 y
Rockway Golf Club 2.0 1.0 2.0 2.0 y
Saginaw Golf Club 3.0 2.5 2.5 3.0
Savannah Golf Links 5.0 5.0 3.0 5.0 Y
Springfield Golf & CC
Victoria Park East GC
Averages 3.4 3.4 3.0 3.6
• Scoregolf: Scoregolf provided ratings on a 1-10 scale, with 10 being highest. They
also provided three subscales, "Service," "Pace," and "Value". The average overall
rating was 6.0. Grey Silo and Village Park at 7.3 were the highest, followed by
Savannah at 7.1 and River Edge at 7.0. Rockway was rated 12th at 6.0, while Doon
Valley was not rated. The average rating for Customer Service was 5.6. Springfield
had the highest rating at 8.0. Rockway was rated below average at 4.7. On Pace of
Play, the average rating was 7.2, Rockway came in below average at 6.0, and the
lowest rated of all the courses. For Value, the average rating was 6.1. Rockway
came in just under at 6.0.
• Ontgolf: Ontgolf rated 1-5, with 5 being highest. They had six subscales, including
Layout, Greens, Facilities, Conditions, Pace and Value. On the overall scale, the
average rating was 3.4, with Savannah and Grand Valley being the highest rated at
5.0. Notably, Grey Silo was not rated. Both Doon Valley and Rockway were rated
well below average at 2.0, the lowest of the courses rated.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 31
EXTERNAL FACTORS SUMMARY
Some summary points about the overall market environment within which the City of Kitchener
golf courses are operating include:
• The local market demographics tend to be favorable for high golf activity. The
Kitchener area has a high population base and higher-than-average household
incomes.
• The basic economic structure of the area is also favorable for high golf activity with
several large employers, including high-tech employers that typically bring "white-
collar"jobs generally consistent with high golf activity. However, the recent recession
and declines in employment, coupled with more limited discretionary spending, have
clearly reduced golf participation in this market area.
The general balance between supply and demand in the Waterloo Region appears to
be less favorable than the "standard" in the U.S., although NGF recognizes that we
may have underestimated golf participation of Southern Ontario. Still, even with a
much higher golf participation rate in the area, there are far fewer households
available in the market area to support each 18-holes of golf than other northern U.S.
markets with similar characteristics.
• The City of Kitchener golf courses are near the bottom of the pricing scale in this
local market. NGF believes that there may be room to increase golf fees for certain
customers at certain times, if the product improves accordingly.
• Among the keys to growth in golf activity will be increasing participation among
minorities and females. Beginner-type facilities such as Doon Valley Executive,
Rockway, and the Golf Dome can be helpful in meeting this challenge.
The NGF review shows that Kitchener facilities were consistently rated at or below
average on almost every scale by on-line golf rating services. While these ratings are
cumulative over a period of years and thus may not reflect the current state of affairs
at the courses, they clearly demonstrate that the courses have a poor reputation
among public golfers in the area. This reputation MUST be overcome in order to
significantly improve performance. Again, the problems may or may not have been
solved, but the perception is still out there. This means that in addition to fixing
whatever problems remain, we MUST create favorable publicity and improve IMAGE
marketing.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 32
Summary of NGF Consulting
Recommendations
NGF Consulting has prepared a schedule of recommendations for the continued operation of
the Kitchener golf courses. These recommendations have been organized into three main
categories: (1) Overall system vision; (2) Basic oversight and structure; (3) Physical
enhancements; and (4) Operational Recommendations.
CITY OF KITCHENER GOLF SYSTEM BASIC VISION
In our examination of Kitchener Golf, we came away with the impression that there is no clear
vision as to what the City wants from its golf facilities -other than improved performance. As a
result, a lot of decisions have been made that help with the immediate profitability of the facility,
but do not address long-term issues or provide a clear guidance as to the facilities' future.
In many ways, the City appears to be treating its golf operations as though it was a single
course. Yet the City has four very different golf courses plus a Golf Academy. Each of these
facilities appeals to a different market. The City needs to take better advantage of this fact
and promote itself as having a product for everyone!
We would encourage further separation of the products, especially between Rockway and Doon
Valley. To NGF, Doon Valley has the opportunity of attracting both better and younger golfers
that are not presently attracted to the facility. By making the course more appealing to younger
adult golfers and to better players, Doon Valley has the opportunity of significantly improving its
performance, especially on its 18-hole course. The analogy we see is with the improvements
you made to the Aud and how that improved attendance and brought it a younger market.
RECOMMENDATIONS ON BASIC OVERSIGHT AND STRUCTURE
The NGF Consulting recommendation for the future operation of the City's golf system (Doon
Valley Golf Course and Rockway Golf Course) is based on our understanding of the economic
performance of the system and the City's need to maximize economic performance. The
following section summarizes the options available to the City of Kitchener by presenting
descriptions of the most typical management options for public sector golf operations, as well as
advantages and disadvantages of each option. Before presenting the recommended
management arrangement for the City's golf course, NGF Consulting has presented three basic
options the City of Kitchener could consider for golf facility operations.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 33
Management Options
These options, which are presented in order of most direct City involvement to the least City
involvement, include:
1. Self Operation. Under this scenario, the City would continue to operate the facilities
under direct control of the Community Services Department and through an on-site
Golf Manager who is a City employee.
2. Full-Service Management Contract. Hire a management company to operate all
aspects of all City golf facilities. The City pays a fee to the management company for
this service.
3. Leases. Lease the facility to a private operator in exchange for an annual (or
monthly /quarterly) lease payment to the City. The lease could be established to
include certain lessee requirements, including capital investment in facility
improvements. Maintenance standards and compliance policies would be included,
and some restrictions regarding setting of green fees could be included.
4. Concession Agreement. This form of agreement is similar to a lease agreement,
but usually involves granting a license to operate a facility rather than the right to
occupy the premises. The municipality typically is responsible for maintenance.
5. Hybrid Contract. A hybrid contract combines some of the advantages of a lease
with those of a management contract. These are usually of shorter term (3-5 years)
than a lease and should have escape clauses that can be triggered if the operator
does not perform up to expectation.
Management contracts, operating leases, and concession agreements are the three most
commonly used terms to describe a contract between a municipality and a private golf course
operator. Each has significant differences, but also several common characteristics. Ageneral
discussion of each option, along with key advantages and disadvantages is presented in the
following paragraphs.
Option 1:Self-Operation by City
Self-operation gives the City the greatest control over golf operations. The City of Kitchener
would continue to have control over all employees, course maintenance, policies and
procedures, hours of operation, fee schedules, and operating and capital budgets. All revenues
would be available to pay for operating and maintaining the facilities.
Advantages of Self-Operation
• Simplest option
• Direct City control of the assets
• All workers are City employees
Disadvantages of Self-Operation
• Golf operation may experience fiscal loss and require subsidies from other
departments (i.e., taxpayer support).
• Revenues may not cover rapidly increasing costs (particularly labor), especially when
golf market is in decline.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 34
• City may lack necessary expertise in managing golf facilities, especially in food and
beverage area.
• When revenues and/or operating/capital reserves are down, needed improvements
may not be funded (or at least deferred).
Discussion
Under this option, the City will have to be prepared to fund all needed improvements, and these
needs may be in excess of the Golf Enterprise Fund balance (as present). The inability to fund
capital improvements and ever-increasing operating expenses could ultimately result in a less
attractive product to golfers, leading to rounds and revenue decreases.
Option 2: Full Service Management Contract
The primary goal of a management contract is to provide a golf facility with experienced,
professional managers who are responsible for the daily operations, thus relieving the City of
this task. In a typical management contract, the municipality hires a firm that is charged with all
management responsibility. The municipality funds all capital improvements, and the
management firm hires all employees. Because employees work for the management firm and
not the City, payroll cost may be less reducing operating expenses. Management fees paid as
compensation in these agreements typically fall between 2% and 4% of total revenue, or
approximately $65,000 to $130,000 for the Kitchener golf facilities (including F&B).
Advantages of Management Contracts
• Reduction of operating costs when those expenses are much higher than normal
(not the case at Kitchener Golf facilities in 2011).
• It is assumed that the company or individual hired has experience and expertise in
golf facility operations, including F & B. Not only can this provide help in operations
and maintenance but also in other areas such as marketing and merchandising.
• The City is removed from day-to-day operation in exchange for a payment of a pre-
determined fee plus a percentage of gross revenues or some other formula, which is
equitable to both parties. In addition, net revenues (if any) are retained by the City.
Disadvantages of Management Contracts
• Though this option offers the City more control than with an operating lease, it offers
less control than self-operation.
• Unlike a lease, management contracts usually do not provide a guaranteed income
for the owner (the City), but rather a guaranteed income for the management entity
(operating risk remains with the City).
• The City would still be responsible for capital improvements (which NGF Consulting
believes is an important element in the case of Doon Valley Golf Course).
• The City would still need staff with golf course expertise to oversee the golf operation
and ensure contract compliance.
Discussion
This is an option that is typically considered as a reaction to extremely high operating cost, a
situation that is not the main deficiency at the City golf courses. Still, under this option the total
business risk would still lie with the City of Kitchener, and seems very unlikely that this type of
arrangement will significantly alter the basic revenue/expense equation that is present at
Kitchener Golf Courses in 2011.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 35
Option 3: Operating Lease
Under this scenario, the facility would be leased out in its entirety to a private golf company (or
individual), who would be responsible for all operating expenses as well as capital upkeep. The
lessee would then receive most of the revenue. The City would either receive a flat payment, or
would get a percentage of revenue (revenue lease).
Advantages to Leasing
• Burden of Risk. Leasing the facility to a private entity shifts the burden of
operational risk to the lessee. This includes the risk associated with rapidly rising
labor and other expenses, as well as potential continued downturns in rounds played
and revenues. Barring a breach of the contract, the City could have a guaranteed net
revenue stream. The only expenses remaining with the City will be those associated
with administering the contract, oversight, and compliance.
• Simplicity. The City would be relieved of the day-to-day responsibility in maintaining
and operating these facilities. (As with all management options, the City should still
have a person who has golf course expertise monitoring the operation and enforcing
contract compliance - i.e., Director of Golf Operations or Golf Course Manager).
• Capital Improvements. Depending on the relative attractiveness of the business
opportunity to the private entity, the lease terms could require (or at least incentivize)
the lessee to make, or at least contribute significantly to, needed capital
improvements (i.e., improving drainage, maintenance facility and on-course
services).
• Maintenance Equipment. The lessee would be responsible for providing
maintenance equipment and golf carts.
Disadvantages to Leasing
• Control. This lease option offers municipalities the least amount of control over the
golf course operation, especially with regard to resident use of the facility and pricing.
• Profit Motive. This is closely tied to the control issue. If not carefully executed, a
lease arrangement may conflict with the objective of providing an affordable
recreation activity for residents, as private interests (including maximizing return) can
often be in opposition to public interests (such as providing a community service).
• Labor Issues. The lease could lead to public sector employees losing their positions
at the golf course, or at least face reductions in pay and/or benefits.
• Revenue Constraint. As would be expected when one party shares a
disproportionately low share of the risk, the City would receive less of the upside
revenue potential than it would with a management contract.
• Long Term. Leases are typically for a long term, especially if capital improvements
are included in the lease terms. This makes it difficult to get out of the lease, should
the municipality become displeased with the lessee's operation of the facility.
• Down Market. The lessee may be forced to cut maintenance expenses and/or raise
fees if revenues do not meet expectations. Unexpected golf market downturns often
lead to the lessee seeking to renegotiate terms.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 36
Discussion
While leasing of public sector golf facilities was popular in previous decades, its popularity
waned in the 1990s as golf revenues were increasing and public agencies began to see what
they thought were large sums in golf revenue going to an outside vendor and not being
reinvested in the facility or going as profit to the municipality. However, since the turn of the 21St
century, leases are coming back into fashion for municipal golf facilities, particularly in the 2008-
2010 period of time, with public sector budget challenges. Leasing out the golf operations shifts
the burden of operating risk to the private vendor, eliminates large fiscal losses, and, in some
cases, provides a guaranteed revenue stream to public agencies. In most cases, the vendor will
also contribute to capital improvements.
Although the appeal of turning everything over to an outside agency may have a lot of merit,
especially in terms of transferring operational risk, we should note that the basic issues that tend
to drive municipalities into this option do not exist in Kitchener golf operations. While there may
be some inflation in its expenses, Kitchener Golf is presently operating efficiently and working to
reduce its expense structure in 2011; it does not seem that the conditions in Kitchener lend
themselves to this sort of solution.
Option 4: Concession Agreements
This form of agreement is similar to a lease agreement. However, a concession agreement
usually involves granting a license to operate a facility rather than the right to occupy the
premises. It is very common in the golf industry, especially in the food and beverage service
area (like the food and beverage concessions at Rockway and Doon Valley). The second most
typical concession agreement would be for the Pro Shop, whereby the municipality receives all
green fees, plus an agreed upon percentage of the other revenue centers. The municipality
typically is responsible for maintenance. Because of the short term of most concession
agreements, there is little incentive for the concessionaire to make major investments.
Advantages of Concession Agreements
• The City would be removed from the day-to-day operation (if a pro shop or full facility
concession) in exchange for green fees and apre-determined percentage of other
gross receipts.
• Concession agreements provide more control than an operating lease, but less than
a management contract.
• The term of a concession agreement is typically shorter than an operating lease.
Disadvantages of Concession Agreements
• Concession agreements do not provide guaranteed revenue to the municipality and
the City will still be responsible for facilities maintenance (operating risk remains
with the City).
• The City would be responsible for all major capital improvements.
• In most cases, the City would be expected to retain the very expensive course
maintenance function.
• There are likely to be few highly qualified management firms interested in a short-
term concession agreement, as these agreements are most often with a single
individual (golf professional). Management firms frequently prefer to put their
resources into projects that have longer terms and have the potential to be more
financially rewarding.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 37
Discussion
The advantages to this type of arrangement are the City's relief of day-to-day operational
responsibilities, yet still retain some control of the operation and keep some community service
benefit. The system usually allows the ability to move labor expense onto a separate entity, not
subject to City labor policies. The system can also help reduce a City's administration and
overhead expense on the operation. However, in structures where there are multiple concession
agreements (Pro Shop, F & B and maintenance all separate) this is not always possible due to
the requirements of managing multiple concessions and getting all involved "on the same page."
Option 5: Hybrid Management Contract
A Hybrid contract blends many of the advantages of a lease with those of a management
contract. Similar to a lease, the operations of the facility or components of the facility would be
turned over to a privately owned company who would be responsible for all the operating
expenses. Thus the management company assumes MOST of the risk. However, it is not a
lease. It varies in a number of ways, including.
• Term: A management contract is for a shorter period, typically three to five years.
• Variable Payment: In most cases the payment to the management entity has a low
fixed base, heavily weighted toward incentives on performance.
• Capital Improvements: Typically, the City would still be responsible for all major
capital improvements, although some management companies may be willing to
include some of the capital improvement recommendations contained in this report in
exchange for more favorable terms.
• Flexibility: A management contract can include all or only parts of the operation.
Advantages /Disadvantages
The advantages and disadvantages of a Hybrid contract generally mirror the management
agreement and leasing advantages and disadvantages, combing the best of both options for the
benefit of the municipality.
Discussion and Recommendation
It is our experience that self-managed facilities tend to fare the poorest when it comes to
municipal operations, as many municipalities by their very nature are poorly equipped to
compete with private enterprises in a highly competitive environment. Further, the economic
pressures placed on the Golf Enterprise by the City are such that improved performance is
paramount. This may result in further expense reductions that could jeopardize the City's golf
operation. Thus, the City of Kitchener may be forced to consider the implementation of
some type of privatization model if the present system does not produce the level of
economic performance desired by the City of Kitchener.
If the City makes the decision to pursue some form of privatization structure, it is the NGF
recommendation that a "Hybrid" structure be pursued that combines elements of the
management agreement with a facility lease. The ideal hybrid option would include:
• Pooled Revenue: The contract should not be based on a flat fee, but should
incentivize the contractor to maximize performance in a way that is best for the City.
We feel the best way to accomplish this is to have all revenue (less cost-of-sales and
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 38
with the exception of lessons) be considered equally and subject to the same
revenue split.
• Oversight: The contract should contain an oversight mechanism that allows the City
to inspect the operation on a regular basis (such as twice a year) and have set
standards that the contractor should adhere to. If the contractor is not performing to
standards, than there would be financial consequences. (We further suggest that
these inspections be carried out by a qualified third party).
SPECIFIC PHYSICAL RECOMMENDATIONS
In an effort to raise the quality of the golf courses and help to improve performance, the City
must be prepared to make some capital investment in these golf courses. Put simply, the City
should be prepared to "spend money in order to make money." Right now, Doon Valley has all
the appearances of a facility that is either incomplete or simply ran out of money in its
development.
Doon Valley Improvements
The main improvements we recommend for Doon Valley include:
Improve the "old" holes. By bringing them up to the standards of the new 10 holes.
The course needs to look more like a Championship golf course. This upgrade
should include:
^ Improving irrigation
^ Adding cart paths tee to green
^ Resurfacing the old greens
• Adding a minimum of one new tee: The course should have at least four sets of
tees, with a back tee at least 6,500 yards -and preferably 6,700.
New Clubhouse: It would probably be cheaper to build a new clubhouse than to do
the amount of extensive renovations required to bring the clubhouse up to standards.
The new clubhouse would likely be 5,500 sf or so in size to accommodate a large
banquet area that can be subdivided into smaller areas, a good commercial kitchen,
large pro shop and an indoor teaching center for the golf academy. Locker rooms are
NOT needed. At most, we would include a dozen day lockers with a shower. This
should be a daily fee facility and make no pretenses at being a private club with
membership benefits.
• Permanent Restroom on the 18-hole course: Lack of permanent restrooms will
greatly hamper getting play from women and seniors. You may be able to get self-
contained restrooms that would be acceptable for flood plain use.
• Consider making Hole #3 a par-3 and Hole #4 a par-4. These two holes as they
are do not fit in well.
• Range Signs: Remove the yardage signs on the range and replace with markers on
the tee that indicate the relative yardage to each target green, given the limited flight
balls.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 39
The new "Championship Course" would be priced considerably higher than Rockway, but would
be less than Grey Silo, providing an affordable alternative for quality golf. At the same time, the
9-hole ("Classic") course would be priced below Rockway - at least for nine holes of play. (With
improved customer service, we would also consider increasing the fees at Rockway -perhaps
by $3- $4. )
Rockway Improvements
The main improvements we recommend for Rockway include:
• Tunnel: We recommend building a tunnel to link the two parts of the course across
Cortland Av. This is a safety issue as well as improving pace of play.
• Irrigation: Extend the irrigation to all areas that are "in-play".
• Elevator/Lift: Adding an elevator to the clubhouse for better access to storage
areas, both for safety as well as improving operational efficiency.
• Tournament Pavilion: Adding a tournament pavilion with restrooms, near the 18th
green to allow for large golf events and indoor banquets to be held simultaneously.
This should be covered with ceiling fans to help keep it cool.
• Expand Parking: Consider options to expand parking, including conversion of the
former lawn bowling area.
• Tees: Many of the tees need to be enlarged and others need leveling
• Greens: At least six greens need to be resurfaced.
SPECIFIC OPERATIONAL RECOMMENDATIONS
After our thorough review of the Kitchener Golf operations, NGF Consulting is not inclined to
recommend that any fundamental changes be made to the operation of the facility. As noted
above, the management structure of the facility is sound, and the facility is being managed and
maintained as efficiently as reasonable, given budget realities. We noted NGF opinion that the
City is receiving excellent value for the money spent on golf maintenance positions and that
these individuals are showing outstanding achievement despite small staff size and shrinking
budgets. In all, NGF has observed a very dedicated staff that is working hard to improve the
physical and financial condition of this property for the City of Kitchener. Therefore, no major
changes in operation are recommended. Our operational recommendations are as follows:
• Wireless: NGF recommends installing wireless in both clubhouses for customer
use. This will make the facilities more attractive to both younger clients and business
people. Further, it should help the food and beverage operations.
• Rangers: Rangers should be employed at all times to keep pace of play moving.
This will likely require restructuring the compensation package to make it more
attractive.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 40
• Funding: Explore corporate funding for some of the renovations -particularly the
new clubhouse such as corporate naming rights.
• Permanent Tee-times: Consider selling "permanent" tee-times, where for an annual
fee, and a person can have the same tee-time blocked all year. There would need to
be a provision that they would have to cancel the tee-time 24 hours in advance or be
charged a small fee.
Capital Fund: Kitchener does an outstanding job of self-funding for capital
equipment purchases. However, it fails to have a similar mechanism to fund capital
improvements to the course. Various studies have shown that golf operations need
to hold back 6-10% of their revenue for capital improvements. We recommend that a
fund be created and funded with a minimum of six percent of the gross revenue from
the golf operations to help fund future capital improvements.
• Dividend: We recommend that the dividend:
^ Only be paid if there is money left over after operating expenses and
capital funds (above) have been paid
^ Be based on a specific formula. The initial idea behind the dividend was
"a level playing field", it should be based solely on the calculated income
and property tax revenue the operation would generate if privately owned.
^ Consider using the overage paid over the past several years from the
above calculation to be applied to the golf operation's deficit or to fund
immediate capital improvements.
• Organization. Some NGF ideas on basic organization include:
^ Have the two administrative positions at the golf course become part of
the head pro's staff, becoming his employees and not the City's. They
would then report directly to the head pro.
^ Increase the employee wage allocation for the golf course to cover the
admin positions. As these positions will not cost as much under the head
pro's contract, it will allow him to add needed personnel in the pro shop
and cart operations areas.
^ Also have the golf academy report to the Head Pro.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 41
Appendices
A -Golf Course Life Cycle
B -Golf Industry Standards, Norms, and Operational Issues
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -FINAL Report - 42
APPENDIX A -GOLF COURSE LIFE CYCLE
GOLF COURSE ITEMS
Hr~W L~I+~G SH~UL~ PARTS ~~' THE G~.LF ~G(1URSE ~~ST?
greens { 1y 15 - 30 years Cart Paths - concrete 1~ - 3t'} years
~ ~
$u~nker Sand
_e 5 - 7 years 1. PraCiiCe Range Tees 5 - il? years
Irrigation System 70 - 34 years Tees 15 - 2Q years
frrig8tior7 ~'a~rafrdl Sysferrrr 7R - T5 yer;rS Corrugated Metal Pipes 1h - 34 years
P'VC Pipe {Urrrler pressa~reJ TC} - 3t7 years Bunker Draia}age Pipes {3} 5 - 16 years
Purraia Sfatrara
f5 ~- 2f? years ~
Mulch
1
3 years
=
-
- -
-
Cart Paths - asphalt X21 a - 10 years brass i4? 'caries
{ar IcsP7geri
A1f1T€S: t7J SL' era, fa r.PGtS C~31i l+t#rc~l7 Prlrr~ f17p ~t'C+Si(!d] It7 r~/?+~f. [? [Jrc4? s; ,#C Cd!~7+P+faPr~iia Oi J:7yer5 p,a !h~ ~;rl#dCf ref f~tC oriyrnll ralasirl,Crrl7n,
rhp
drFS:r4T Fez C'.+7~4V!/I i"~1,7L'G'f 4~F~e.RlS aR{P f~SJ}PTTS~ rD G,P!aP3'~$S PPP lflk^ s3,JrPfr I7L?P7P ~7f, ~fCfPffL~i~{81sP~rPdpo,rYP~JfkL* tJ]g PPi[~.r3~1!(,Y3 J]e1CL'(~Q111]fL'L'PP
spePrd
raAd f'f}i l!? fB~!'BiPOr151 121 ASSVAadS Qil•~0'rFg R3 fii7+1L 173fiC€ aE~iJ117r,Rg ~ -~ 21+8~rs Brg~Cf iASF@Iflr7itZlF. ~3,~ F~P/1iClfrl~+ r~~lfx7 t:FCl b~C3lJS8 171Q S7P}d iS br7JfiQ
char3yed - k'JPP'PC iJPe ~a3CflPrrer}! PS 1Jlefe to ~J7a~Af~e 58f:d; i15 @IieR o _govd teimu fa repJaen die d~auaage y,~3es as a>G~eIJ. ~4JAa ncwgrassP=s e,ater(Jae
rPailr;Ce[aJi?C2 - fOr Cx7frtpJe, iJ1p5e Ptr7f ~fe 77POre dr~IryJJr 31Pf~ d+s8t35e? [61Cr8fi1-rEA+arafir3g maw be e3p,~rgpFIS91L, dependJi?y UP0,7 FJ3e S,le.
~nmponent [i#e spans ~an,rary depending upon location ®#the golf course, granlityof materials, original ins#alRattnn
and pasi maintenance practiees• '4Ne encQUfagPs yvlf +course feeders tt~ vwszrk +uith 4tleir gol{ course arcisitec€,
SI~~l~rii5tBa5t~QrY'd5 drtd Othtsr5 to ~SSCSS tli~ long@bity a# their paFticuldr ~~UrS"2'S X41 rfl~Orl@ritS.
The Arrrrirican Saclefy of Gaff Course ,4rchifecCs
lASGC34l .thanks those at the USG,4 Green Secticrr,
Golf Course ~ui1p'ers.~ssoclation ofAmerica, GolfCc~trrse
SrrperlnrertdanrsA,ss~cratlorr efArr~erica ar~rf varicfus
strppfiers for them assrstar~ce iJ~ carrtpifir~g [his irafr~rr~~afc~n.
The materials presente~f orr this chart have been
ret+r'eweaf by the follQwJr+g.4llred.4ssociatiares o~~olt;
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -Appendices - 1
APPENDIX B -GOLF INDUSTRY STANDARDS, NORMS, AND
OPERATIONAL ISSUES
NGF has presented a selection of basic golf industry information designed to help educate the
City of Kitchener on "reasonable expectations" for public golf operations in the U.S. (used as a
"reasonable proxy" for operations in Canada) Information provided includes operational norms
for public golf courses (rounds, revenues, expenses, staffing) as well as some other "standards"
consistent with successful public golf courses.
Public Golf Operational Norms
For comparison purposes to City of Kitchener golf courses, we present a review of selected
NGF data collected from various surveys conducted in the last five years. This include data from
the aggregate of all golf courses in the U.S. (by category), as well as data from selected sub-
categories of golf facilities, including "Standard" (highest green fee under $35), "Mid-Fee"
(highest fee between $35 and $70) and "Premium" (highest fee over $70). These data are
detailed in the National Golf Foundation publication, Operating & Financial Performance Profiles
of 18-hole Golf Facilities in the U. S. As Kitchener is operating golf courses that fit into two
separate categories, NGF has included benchmark data for `mid-fee' public golf courses, but
does not have complete and accurate data for comparison on 9-hole Executive-length and par-3
courses. In addition, NGF Consulting has added estimates from the "Future of Public Golf in
America"study completed in 2009 and presented at the annual NGF Golf Business Symposium.
Public Golf Facility Rounds Expectations
NGF research indicates that the average number of rounds played per 18-hole golf course has
been declining in the last 25 years. The totals now stand at an average of 32,497 rounds for
municipal golf courses, 26,009 for all daily fee (privately-owned, open to the public), and 17,748
for private (member only) clubs. We note these figures all represent significant declines since
1985, with acceleration of decline since 2001. As a benchmark comparison, average rounds per
18-hole municipal golf course was around 36,000± in 2005 and just over 33,500± in 2009.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -Appendices - 2
Rounds Played
Median 18-hole
60,000
50,000
Municipal
40,000
Daily Fee 32.497
30,000
26,009
20,000
Private
17,748
10,000
0 ,'
1985 1992 1994 1997 1999 2001 2003 2005 2008 2009
Public Golf Facility Revenue Expectations
NGF research indicates that the total of all golf facility revenues in the U.S. represents a $22.3
billion industry, down from a peak of $29.1 billion in 2005. The table below shows the NGF
estimate for total golf facility revenue (public and private combined) in the United States for
selected years since 1992.
Total U.S. Golf Facility Revenue
Total Golf Facility Revenues
Adjusted for inflation, includes public & private
$35
Billions of Dollars
$30 $28.5 $29.1
$25 $24.2 $23.5
$22.3
$20.9
$20 $18.5
$15.5
$15
$10
$5
$0
1992 1994 1997 1999 2001 2005 2008 2009
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -Appendices - 3
Average Revenue per Golf Facility
The NGF estimate for total revenue per golf facility in the U.S. now stands at $1.5 million for
daily fees, $1.3 million for municipals, and $3.4 million for private clubs. Again, we note that this
is a full aggregate of all golf facilities in the U.S., inclusive of all climatic regions and facility
types.
Facility-Level Revenues
Average Total Revenues
18-hole - $millions
2008 2009 % change
Daily Fee $1.6 $1.5 -6.1
Municipal $1.3 $1.3 -2.1
Private $3.6 $3.4 -4.7%
Source: National Golf Foundation and Golf Datatech
Revenue Detail for `Mid-Fee' Public Golf Courses
Further detail on `mid-fee' public golf facility operations in the United States has been collected
by NGF over the years, a summary of which is presented below for 2005 and 2009. `Mid-fee'
public golf courses are those with green fees in the $35 to $70 range (excluding carts). The
NGF consultants feel that this represents the best measure of comparison to performance at the
Kitchener golf courses, and is used for this purpose throughout the NGF engagement for the
City of Kitchener.
Public Mid-Fee Average Revenues
2005 2009* % change
Green fees, cart fees and member/passholder revenue $679,280 $624,900 -8.0%
All other golf revenue $76,930 $75,000 -2.5%
F&B revenue (incl. banquets) $214,400 $182,200 -15.0%
Merchandise revenue $80,080 $75,300 -6.0%
All other operating revenue $37,560 $36,400 -3.1%
Total Revenue $1,088,250 $993,800 -8.7%
Source: Operating & Financial Performance Profiles of 18-Hole Go/fFacilities in the U. S., 2006 edition, Natio nal Golf
Foundation, and "Future of Public Golf in America"study - 2010.
"Estimated totals derived from sample research in 2009.
Public Golf Facility Expense Expectations
NGF research indicates that all golf facilities in the U.S. had a total of $21.3 billion in direct
operating expenses, down 20.5% from a high of $26.8 billion in 2001. The table below shows
the NGF estimates for total golf facility expenses (public and private combined) in the United
States for selected years since 1992.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -Appendices - 4
Total U.S. Golf Facility Expenses
Total Golf Facility Expenses
Adjusted for inflation, includes public & private
$30
$26.8
$25 $24.7
$22.4
$21.3
$20 $20.0
$16.5
$15 $14.6
$12.4
$10
$5
$0
1992 1994 1997 1999 2001 2005 2008 2009
Average Expense per Golf Facility
The NGF estimate for total expenses per golf facility in the U.S. now stands at $1.3 million for
daily fees, $1.1 million for municipals and $3.2 million for private clubs. Again, we note that this
is a full aggregate of all golf facilities in the U.S., inclusive of all climactic regions and facility
types.
Facility-Level Expenses
Average Total Expenses
18-hole - $millions
2008 2009 % change
Daily Fee $1.4 $1.3 -5.8%
Municipal $1.1 $1.1 -1.2%
Private $3.4 $3.2 -5.4%
Source: National Golf Foundation and Golf Datatech
Operating Expense Detail for `Mid-Fee' Public Golf Courses
Further detail on `mid-fee' public golf facility operational expenses in the United States from
2005 and 2009 are displayed below. The NGF consultants will use these figures for comparison
to performance at Kitchener Golf Courses throughout the NGF engagement for the City of
Kitchener.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -Appendices - 5
Public Mid-Fee Average Expenses
2005 2009* % change
Total maintenance costs $377,160 $414,900 10.0%
Golf car fleet costs $31,120 $30,500 -2.0%
COGS F&B $86,360 $76,200 -11.8%
COGS merchandise $56,450 $44,600 -21.0%
Other expenses $315,280 $365,700 16.0%
Total Expenses $866,360 931,900 7.6%
Notes:
"Total maintenance costs" includes payroll, supplies, and equipment.
"Other expenses" is a large category because it includes all non-maintenance payroll and all
other operating expenses. Source: Operating & Financial Performance Profiles of 18-Hole Go/fFacilities in the U. S., 2006
edition, National Golf Foundation, and "Future of Public Golf in America" study - 2010.
Estimated totals derived from sample research in 2009.
Other Expense Findings
NGF Consulting has also included basic information on golf industry `standards' for all golf
courses of all types in all climates. Industry standards can vary depending upon specific
courses, but as a "rule of thumb," allocated spending in key areas coincide with the following
percentages:
Key Area Allocated Spending
Labor 50%
Products, Supplies & Repair 20%
Services (Incl. Equipment) 15%
Utilities 5%
G & A (Excl. Labor) 5%
Other 5%
Source: Golf Course Superintendents Association of America
(GCSAA) and NGF Consulting. Expe nse totals do not include non-
recurring capital expenses, amortization, or depreciation.
Public `Mid-Fee' Average Revenue and Expense per Round
NGF research indicates that middle-fee public golf courses in the U.S. average $30.58 in total
facility revenue per round of golf in 2009. Of this figure, $21.54 (70.4%) is derived from "golf"
sources (green, cart, pass fees and driving range), with the remaining $9.04 (29.6%) per round
derived from "ancillary" (mostly merchandise, food + beverage) sources. Overall, this figure has
declined by about 6.0% between 2005 and 2009, with the largest decline (12.5%) coming from
food and beverage revenue.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -Appendices - 6
Public Mid-Fee U.S.
Average Revenue Per Round
2005 2009 % change
Total Revenue $32.54 $30.58 -6.0%
Golf Revenue $22.61 $21.54 -4.7%
F&B revenue (incl. banquets) $6.41 $5.61 -12.5%
Merchandise revenue $2.39 $2.32 -2.9%
All other operating revenue $1.12 $1.12 0.0%
Source: Operating & Financial Performance Profiles of 18-Hole
Golf Facilities in the U. S., 2006 edition, National Golf Foundation, and "Future of Public Golf in America"study - 2010
Middle-fee public golf courses in the U.S. average $28.68 in total facility expenses per round of
golf. Of this figure, $12.77 (44.5%) is derived from golf course maintenance, with the remaining
$15.91 (55.5%) per round derived from all other expenses. Overall, this figure increased by
about 11 % between 2005 and 2009.
Public Mid-Fee U.S.
Average Expense Per Round
2005 2009 % change
Total maintenance costs $11.28 $12.77 13.2%
Golf car fleet costs $0.93 $0.94 0.9%
Total COGS $4.27 $3.71 -13.1
Other expenses $9.43 $11.25 19.4%
Total Facility Expense $25.91 $28.68 10.7%
Source: Operating & Financial Performance Profiles of 18-Hole
Golf Facilities in the U. S., 2006 edition, National Golf Foundation, and "Future of Public Golf in America"study - 2010
Public Golf Course Staffing
As noted previously, the City of Kitchener is operating its two golf facilities directly, through an
Enterprise Manager with other responsibilities, and a single City Golf Superintendent. There are
no industry standards that can be referenced to determine the appropriate staffing levels for a
golf operation. The number of staff needed for a particular golf operation depends on several
factors, not the least of which is budget considerations. Personnel costs typically represent the
largest single expense item in a golf course operation, as is the case for Kitchener Golf.
Therefore, an analysis of these costs is essential to understanding the financial performance of
the City golf operation. It appears that Kitchener Golf facilities cannot reduce staffing any further
without jeopardizing the quality of the product offering. The NGF review of public golf operations
nationwide in 2009 revealed the following averages for full-time staffing at 18-hole daily fee golf
courses nationwide:
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -Appendices - 7
U.S. Averages
Distribution of Staffing -Full-Time Equivalents (Year-Round)
Total Daily Fee Golf Courses Municipal Golf Courses
U.S. by season length by season length
Doon
Valley 10-12 10-12
GC* Avg.* mos.* <10 mos * mos.* <10 mos
Golf Maintenance Staff 17.0 10.0 9.5 7.0 10.5 9.0
Pro Shop Staff 8.0 9.5 9.0 7.0 10.5 7.5
Clubhouse Staff (F&B) 4.0 3.0 3.0 2.0 2.0 2.5
Total 29.0 22.5 21.5 16.0 23.0 19.0
Source: Operating & Financial Performance Profiles of 18-Hole Facilities in the U.S., National Golf Foundation. based on
combination of pt and ft -volunteers not counted -Averages are for 18-hole courses and Doon Valley is 36 holes.
Golfer Expectations of Better Quality Public Golf Facilities
Golf consumers have developed certain expectations about the package of amenities they
expect at golf courses of various levels of quality. These expectations extend to both the
physical attributes (maintenance) of a facility as well as the level of service provided. In this
section, NGF will provide a basic "checklist" of amenities and services that are expected at
various levels of golf course quality and should be considered within the overall program of the
City of Kitchener golf system. This includes a review of golf course facilities, support amenities,
and service.
Golf Course Expectations
A summary of categories of expectations for golfers at middle-to-better quality golf courses
includes:
• Clean carts
• Good scenery
• Appropriate length and challenges (see below)
• Well maintained conditions
• Well maintained greens
• Well maintained fairways
• Well maintained tees
• Well maintained bunkers
• Clearly marked and visible yardage and hazard indicators
• Rough that is not too difficult and ball can be found
• Practice facility
• On-course facilities /water fountains
Clubhouse Expectations
Basic expectations of golf course clubhouses from golf consumers at middle-to-better quality
public golf courses include:
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -Appendices - 8
• Visually appealing entrance and landscaping
• Area to drop golf bags directly from auto
• Clean and clearly marked entrance
• Appropriate and visible art and decorations
• Visually appealing pro shop area
• Room to shop and view items for sale + ease of purchase
• Convenient restrooms cleaned twice daily
• Clear logistics and ergonomics (where do I go to check in?)
• Space and comfortable chairs to sit and relax
• Wi-Fi and cell service available
• Space to privately change clothes/shoes (if necessary)
• Nice views of the golf course
• Good food and beverage service
• Alcohol service (at least beer) and a comfortable place to go to enjoy food and drinks
and reflect on their round with friends
• Big screen TVs in the lounge/bar and/or grill area that are always tuned to sports
Service Expectations
Basic service expectations from golf consumers at middle-to-better quality public golf courses
include:
• Availability of, and accommodation for booking tee-times
• Assistance with golf bag drop
• Ease of parking
• Friendly/courteous staff at check-in counter
• Pro shop stocked with appropriate basic items (balls, tees, gloves, etc)
• Carts cleaned and fully charged for a round
• Courteous starter attentive to golfer needs
• Management/staff attention to pace-of-play
• Courteous ranger moving play along
• Beverage cart service
• On-course restroom /drinking stations
• Ability to conveniently consume snacks/beverages after 9th hole (the "turn")
• Assistance with golf bag after the round
• Ability to conveniently consume snacks/beverages after 18th hole
• Pro shop open when round complete
The above items represent the basic package of golf facility amenities expected by golfers to
complete a better quality golf experience. Attention to these details will help produce repeat
customers and strong "word-of-mouth" recommendations. In general, the facilities at Doon
Valley Golf Course meet these expectations with some exceptions to be addressed by NGF in
our recommendations section.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -Appendices - 9
Merchandising Operations
Merchandise sales are an often overlooked aspect of golf operations. Most operators realize
that it is important to carry some items as a convenience to their customers, some even see it
as a profit center, but rarely is it seen as a significant source of income. Instead, it is looked
upon more as a small add-on sale and is rarely given much attention. As a result, most
operators are content with merchandise sales of $2.50 or so per round. On the other hand,
some operators see merchandise sales as a potential major profit center for the golf operation.
In addition, savvy operators understand that the quality of the merchandise helps set the golfer's
expectations for the course. For example, if a golfer comes in and sees a sparsely stocked pro
shop, they are likely to conclude that the golf course is in financial difficulty, which may reflect
on the quality of the golf course and its condition. Similarly, if the pro shop carries high-quality
shirts and supplies, the golfer is led to believe the golf course is a higher-end facility that attracts
higher-end golfers who can afford to play at better facilities.
The biggest key to success in merchandise sales is attitude. If a golf facility operator
approaches merchandise sales as simply a minor add-on, it is likely to remain a low priority and
generate little revenue. On the other hand, if the pro shop is viewed as a retail store, the entire
perspective changes. The degree to which a golf facility can emulate successful retail store
practices will determine just how successful that golf shop can become. Ideas to help move
improve merchandise operations at public golf courses include:
• Sales. Always have merchandise on sale. Further, the merchandise on sale is not
just the rejects, but includes popular selections as well. Merchandise should be
rotated regularly through the sales tables and not kept on sale for more than a few
weeks at a time.
• Promotion. The typical pro shop relies on a small sign placed strategically on a rack
or table to announce items that are on sale. Merchandise sales can also be
promoted on the Website, sent out in emails, noted on large signs in the lobby or grill
area, or on smaller signs at the pro shop counter or even on the golf carts.
• Inventory. Successful retail stores recognize that having a strong inventory is
important for two reasons: (1) it gives customers a wider selection, which increases
the chances for a sale; and (2) full shelves are much more enticing to customers
than sparsely stocked shelves.
• Margin. Most successful pro shops will have acost-of-goods for merchandise sales
of around 70-75% (boon Valley Golf Course is close to this threshold).
• Know Your Market. One of the biggest keys to success is to know your market and
stock merchandise that is consistent with golfers at the facility and the price point.
• Logo. One thing golf discounters and on-line stores do NOT have is your logo! Your
logo is often the main reason buyers will purchase your shirts and caps, etc.,
because it is unique and gives them something to wear others won't have. The
Kitchener Golf system and Doon Valley should strive to improve the golf log, and
then promote it on all soft goods items (shirts, jackets, hats, etc.), as well on golf
balls and umbrellas and other hard goods items.
• Staffing. The best pro shops will have staff that is dedicated to merchandise sales.
There should be a merchandising manager (as with Doon Valley) who is
knowledgeable on retail sales and knows both how to order and display merchandise
successfully.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -Appendices - 10
Food and Beverage Operations
The food and beverage (F&B) operation at most golf courses is critical to the facility's
profitability, either positively or negatively. The F&B operation, though, is more important to the
success of a golf course than simply its direct contribution to the bottom line. What is often
undervalued, perhaps because it is so hard to measure, is the F&B's impact to the overall
desirability of a golf course and thus its effect on rounds performance.
There is no question that for most golfers a golf course's F&B operation significantly impacts the
overall golfing experience. Given that a golf round usually takes four to four and half hours to
play, a golf round is inevitably going to impact at least one meal for a golfer. Further, many
golfers enjoy relaxing after a round of golf, preferably while eating and/or drinking. This is an
important social time as the golfers reflect on the round, settle bets, and often discuss various
issues that may have nothing to do with golf. (Notably, a golf course is a popular spot to conduct
business).
As a result, a facility's F&B operation can be either an asset or a detriment to a facility. If the
quality of food is excellent and the atmosphere and service are good, there is no doubt that the
operation will have a positive impact on golf course performance. However, if the F&B is lacking
(or even non-existent) it can deter a lot of players from even coming to the course. This is true if
for no other reason than convenience. Given that the golfer is likely to need a place to eat either
before, after or even during a round, if the golf course cannot provide the meal, the golfer must
find another place -adding additional time and inconvenience to the round. Further, a golfer
tends to want to satisfy thirst and hunger immediately. If this cannot be done at the golf course,
the round can be much less pleasant.
On the other hand, if the food quality and service are good, it adds to the golf experience and
increases the desirability of the golf course as a place to play. A high quality F&B operation can
help make up for any deficiencies of the golf course. Similarly, a poor F&B operation can drag
even a good golf operation down.
It is also important to understand that the F&B operation is not limited to the grill or restaurant,
but definitely extends to the golf course. Many golf operators have discovered that offering a
good beverage cart operation not only creates a new profit center, but also increases total
rounds performance. Golfers tend to enjoy beverage cart service, when the operators are well-
trained and personable and the prices and selection reasonable. It is not uncommon fora mid-
level facility to average more than $4 per round from beverage cart sales alone. Successful
beverage carts include good servers and good selection, consistency (be available) and the
sale of beer.
National Golf Foundation Consulting, Inc. -City of Kitchener Golf Operations -Appendices - 11