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Commentary on the Management and Operational Analysis of Bradford Creek Municipal Golf Course

Editor’s note: On Monday, March 25, City Council will consider staff recommendations for the future operation of Bradford Creek Golf Course, a city-owned facility operated by the Recreation and Parks Department. The course’s viability has been questioned by some council members. Further background is provided in our coverage of the issue. Staff recommendations and comments from two members of the city’s Golf Advisory Board are in Item VI of Monday’s Agenda. The following Guest Commentary was offered by the writer to The Greenville Guardian (and other local media) in advance of Monday’s meeting.

By L.H. “Buddy” Zincone
Associate Dean (retired) ECU School of Business
Greenville resident, and golfer

I am writing this because I have some serious problems with the report presented to City Council concerning what is necessary for the management and capital investment in Bradford Creek Golf Course (BC). I do not purport to have the answers but I do have some questions that I think should be asked before making any final decisions.

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GUEST COMMENTARY

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Let me begin by saying no asset of the recreation department “makes money.” If we eliminated all of the parks and other facilities and programs of the recreation department that did not pay for themselves, we would eliminate the entire department. I am personally offended that, as a class, golfers who choose not to belong to a private country club are not worthy of recreation opportunities similar to parks for small children, soccer fields for soccer enthusiasts, etc. We do not expect these assets to “pay for themselves.” Why should we expect it of a golf course.

photo by LWAlthough not an expert in golf course management, I am an expert in the science of economics, which is something I cannot say about the authors of the report. In fact, one wonders, after reading about golfers acknowledging “their responsibility for paying fair market value,” whether the firm has even read the first chapter of a basic economics textbook. The market value is just that: whatever one is willing to pay. No more and no less. You can be sure that when someone begins to talk about “fair market value,” they will propose a price increase in the next paragraph.

And so it is that one of the recommendations is to increase greens fees. The inevitable result of that will be less play. It may take the form of people joining a country club, giving up the game entirely, playing less per month or year than they did before, or playing more at courses around Greenville. The trick is to estimate how much this reduction will be.

It is possible that higher rates, even with less play, would yield more revenue. It is also possible that lowering the greens fee would yield an increase in play sufficient to yield more revenue. This is an empirical matter and there is no attempt to address it except to say that it is unlikely, since there is “insufficient demand in the market place.” This assumes that the increase would have to come from new entrants in the marketplace. It ignores entirely persons who might leave country clubs or play a higher proportion of their rounds at BC instead of traveling to other golf courses.

The report certainly mentions the sensitivity of rounds played to price changes. It states that the increase in play after a rate decrease would not be sufficient to overcome the loss in revenue, but discovering what that sensitivity is requires more work than the consultants have done. Is this information hard to find? Probably not, since two minutes with Google yielded this 2001 study, “On the Demands and Supply of Golf”, by Robert McCormick, [editor’s note: the webpage is currently down] which states, “Our economic model also estimates the price elasticity of demand for golf. To our knowledge we are the first to estimate the price sensitivity of golf. This measures how responsive golfers are to greens fees, and enables course managers to properly price their product. We estimate that the demand for golf is actually quite elastic. This means that golfers are quite price sensitive. We estimate that a 5 percent increase in average greens fees would lead to a 9 percent reduction in rounds played.”

If I can find this in two minutes, why can’t the “experts” cite pertinent research to back up their statement rather than just asserting a scenario that will justify a rate increase?

The report’s “Puzzling Truth Number 7” is not puzzling at all to anyone who knows anything about human behavior and economics. A round of golf is just like any other good or service. What is said in Truth 7 betrays the fatal analytical mistake that a certain good “deserves” to command a certain price. You gain loyalty by consistently providing a better value for the price you charge. No more, no less.

Just because there are private sector alternatives does not mean that a municipal golf course must be “self-supporting.” There are two alternatives to municipal courses: a privately owned public golf course and a private country club.

The country club offers a good that is only remotely similar to that offered by a municipal or public course. Specifically, country clubs, in addition to golf courses, typically have tennis courts, upscale restaurants, an array of social activities, and a golf course maintained in a pristine manner. Hence, in terms of Greenville, I really cannot see that Ironwood, Greenville CC, Cypress Landing, and Kinston CC , all mentioned in the report, are offering the same product as Bradford.

The real competition is privately-owned, public courses: Cutter Creek, Cotton Valley, Ayden, Farmville, Roanoke CC, and, two courses that were not mentioned in the report, Wedgewood (Wilson’s municipal course) and Happy Valley, also located in Wilson. Probably the reason for their omission is that they lie beyond 30 miles from Greenville; the report states that 90 percent of golfers play at courses within 30 minutes of their homes. These two are about 36 miles from Greenville, on an interstate-quality highway. But the distance cutoff is necessarily arbitrary. The total cost for playing golf is not only the greens fees but the cost of getting to the course. Raising fees at Bradford means that, in terms of extra expenditure for going out of town, that differential – or, put another way, the “benefit” of BC’s rate – is reduced. Consequently, one would expect more travel out of town, to other courses, on the part of Greenville’s public golfers.

In addition to the above, the report also mentions Robersonville CC, Indian Trails (closed 2011), Hilma CC, and Bayview GC. It is difficult to see how a closed course could be shopped and its customers/members surveyed. It is also difficult to see how nine-hole courses offer the same product as BC. Hilma, Bayview, and Robersonville are nine-hole courses and Hilma has been closed long enough for the course to be grown over. Given these facts, I wonder exactly how familiar the Colorado-based consulting firm really is with the market around Greenville and how much of this report is boiler-plate stuff they just put in every report. Did they just get on Google and search for these places or have they really thought about the market? My guess is the former.

There is a table on page 14 that purports to list the competition and greens fees. All of my observations relative to the competition hold. In addition, the caption of this table states “the average 18-hole green fee of courses built since 1995 in Bradford Creek’s competitive market is $35…” I guess your consultants didn’t read the chapter in the statistics book that addressed averages. If one takes the average of the green fees listed in the table, it turns out to be $40 and change, and the average for the courses built after BC is $44.25.

I cannot really comment on the accuracy of the financial plan but one question must be asked: “What is the standard to which one aspires for BC?” Will completion of the management recommendations leave us with “Brook Valley” or a reasonably well-maintained golf course with no major problems that offers a good experience but not comparable to the more expensive courses? In other words, what do we envision as our market niche; upscale, mid-scale, or bargain basement?

My own view is that the quality of a municipal golf course, on a scale of 1 to 10, with 1 being Augusta National and 10 being a 9-hole pig path, we should shoot for about a 5.  So the question is “where do your recommendations land us?  1, 5, or 10?”  If the recommended spending yields an Augusta, it is clearly excessive for a public course.  If it yields a pig path, it is clearly not enough.

With respect to the analysis of the residency of the customers, the 47 percent unknown is exactly that, unknown, and no conclusions can be drawn from that datum. Anyone familiar with statistics should know this. Hence, the proportions cited should be based on the 53% of golfers for whom we know residency information. Those golfers break down thus:

  • 51 percent Greenville
  • 15 percent Winterville
  • 13 percent Washington
  • 4 percent Grimesland
  • 4 percent Chocowinity

I have outlined some of what I think are faults in reasoning and fact in this report. Of course, since I am not privy to everything gathered by the consulting firm, I could be mistaken, but I do not believe I am.

I would be remiss if all I did was criticize. So I tell you, repair the traps, narrow the fairways if you must, and maybe put the lower maintenance grass on the greens.

But please, leave Greenville with a well-maintained, mid-level golf course at a mid-level price.

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Responses (3)

  1. Andrew Morehead says:

    All great points. There is another part of this effort, which is to label golfers as only upper middle class white men (note for example the frequent citation of the “average” income of those who replied to the survey). This is obviously untrue, as any of us who golf regularly at Bradford Creek can attest, having seen a wide variety of people playing there. There are women, and people of all ages and races, who regularly play there. The survey is part of the poor research you cite above. There was no sampling, so the most likely respondent is upper middle class and well educated. No surprise there, but that can sure bias “average” results.

    As a past member of Cypress Landing before it became too expensive for me to afford, I can safely say that Bradford is not nearly as nice as Cypress Landing or any of the private clubs, but it is much more affordable and thus meets a community need of encouraging physical fitness and recreation at a reasonable cost.

  2. Brenda Harper Ernest says:

    I do not play soccer, but I am happy that Greenville offers that opportunity in publicly supported fields. I am too old to swing and slide and run around a playground, but it gladdens my heart that Greenville offers that opportunity to young children at city expense. I do not play golf, but I am pleased that Greenville offers that to ordinary citizens who do not belong to country clubs, etc. None of these opportunites “make money” for the city, but they make the city worth living in. And that is important.

  3. Carol Collins says:

    Buddy, THANK YOU! Bill and I had both moaned upon reading the report that the consultants did not seem to know about ECON 101 and thought that before a consultant was hired they must pass an ECON 101 and STAT 101 test. Your article is clear, understandable, comprehensive, and to the point. We have been out of town on several short trips and in getting caught up with the “goings on”. I was delighted to find your article awaiting my perusal!

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