Since I play so many different courses in the Chicagoland area, the one thing that I’ve always been curious about is how courses set their greens fees. I’ve played many courses that have a wide range of pricing, and there’s one thing I’m sure of: the price of the greens fees for the course does not always match the quality, beauty, or challenge of the course.

So I reached out once again to Brandon Evans, General Manager & PGA Certified Golf Professional at Village Greens of Woodridge (and self-imposed “Director of Fun and Entertainment”). Brandon was nice enough to offer some insight into the art and science of pricing greens fees.

This is the first post in a two-part post how golf courses set the price of their greens fees. In this post, we talk about how greens fees are developed and what determines the value of a course.

CGN: Let’s just start with the general question at hand… What exactly goes into the cost of the greens fees?

BE: Each course has a different philosophy and method to arrive at a schedule of fees. Some courses have a pretty static set of fees, while others utilize more of a ‘dynamic pricing’ method on a week-to-week, or even day-to-day, basis.

When establishing fees, courses need to balance dozens of things like meeting operational, debt, and capital expenses, course design, playability, customer service, conditioning levels, amenities, prestige, demand for play, competition, profit motives, location, population/clientele demographics, consumer perception, and more.

Setting fees used to be 80% ‘art’ and 20% ‘science’. Today, with the data and tools available to us, it’s quickly becoming 100% science. In my opinion, the golf industry will likely follow the hotel and airline industry in switching over to daily and/or weekly dynamic pricing models. Even some Major League Baseball teams, like the White Sox, are utilizing dynamic pricing. Dynamic pricing is the science of factoring all of these internal and external factors into a pricing structure that satisfies both operational objectives and consumer demand.

Ultimately, we’re trying to find the right price for the right person at the right time on the right day in order to maximize play, revenues, and customer satisfaction.

CGN: So what kinds of things determine if it’s a $30 course, a $60 course, or a $100+ course?

BE: Initially, a number of factors like those listed above. Ultimately, the consumer decides the price/value of a course.

There are some great courses 80 miles away from civilization that can’t get people to make the drive for $35, and then there’s Pebble Beach who has a six month waiting list at $500 per round that people fly in from all over the world to play. As Pebble Beach is an extreme example, most people place an emphasis on design, conditioning, and amenities as a starting point for formulating a pricing opinion.

It’s also important to note that nearly all courses have a different pricing structure for Saturday mornings vs. Monday mornings… the course doesn’t change in two days, but demand for play does. As such, nearly every course already uses some form of dynamic pricing in order to entice golfers to play their course.

We’re starting to build models that will tell us, for instance, that if it’s 80 degrees and sunny on a Monday in June, we can likely meet demand while maximizing play and customer satisfaction by charging $40 from 8:00 a.m. – 10:00 a.m., $45 from 10:00 a.m. – 11:00 a.m., and $35 from 11:00 a.m. – Noon, etc. As such, a ‘$100 course’ may also be an ‘$80 course’ or a ‘$60 course’ depending on the time of day/week/year and the consumer demand during that period of time. Not every course operator/owner agrees with that philosophy, and there is much debate over the pros/cons within our industry right now on the topic. Some courses would prefer to remain a $50 course, for example, regardless of the day or time.