Golf Operations Review 2021

Background

As Australia pivoted from the COVID-19 crisis to recovery and reopening, it was clear lockdowns and work-from-home had made a profound impact to golf participation and course accessibility. In a few short months COVID forced significant behaviour changes, creating high prioritisation on health and hygiene and ‘nesting at home’ trends. Digital acceleration drove an increase in remote working and fitness on demand streaming. COVID has been described as a “decade in days" transformation to people’s lives.

Like most golf courses, demand for tee times at Mollymook has been pushed to new levels over the last 12 months. There has been a resurgence in golf, intensified by the directive that golf is one of the few sporting activities available during Public Health order restrictions.

In reshaping golf operations to meet new demand and changes in membership expectations, the Club has adopted an ‘open and inclusive' approach providing full course accessibility to all members - male, female, young and old. Players are no longer restricted to playing competition golf on specific days or times of the week. Existing members gained more choice, to play with traditional groups and on new competition days, whilst new members can create a playing experience that unconditionally suits their way of life.

The shift from normal booking routines was an unwelcome adjustment by some groups, and there have been ongoing meetings behind the scenes to work through the issues. Over time most fears have been settled however there is more work to be done!

We are committed to investing in the future of golf and fostering growth at all levels, from juniors through to retirees. We will focus on areas of high importance to the membership while maintaining strong financial results for the club. COVID has provided the opportunity to refocus and the GBAS report is an important part of that process

Understanding the Landscape

Following the reshaping of golf operations over the last year we seek to better understand our position within the golf industry. Are similar clubs experiencing the same challenges and which areas of the operation are most important to our membership?

To better understand market trends and measure the Club’s performance against industry benchmarks as well as gather valuable member insight, Golf Business Advisory Services (GBAS) were engaged to commission a golf operations analysis and member survey. GBAS is acknowledged as Australia's leading provider of independent golf advisory services and have been involved in many member surveys and research projects. They possess significant expertise in drafting survey questions, and managing the delivery, analysis, and reporting process.

GBAS has published several major reports in the golf industry over recent years and they have a strong commitment to continuing research and providing data to support the golf industry. This data will be used to assist clubs become more financially viable in the future. Covid has provided an opportunity for many clubs to refocus and reset their operations.

The review of the golf operation at Mollymook is being led and delivered by Jeff Blunden, Managing Director of GBAS. With a background in international hotels and hospitality, Jeff’s advisory career started in the Real Estate and Hospitality Advisory division of Arthur Andersen in 2000 which then merged with Ernst & Young in 2001.

Jeff set up and managed the Golf Advisory Business Unit within the Real Estate division for Ernst & Young from 2001 to mid-2006, before spending time in roles with both Golf Australia and an international management company prior to formally creating his own advisory company in late 2000.

Jeff has worked with over 170 clients over his advisory career including golf clubs, resorts, councils, administration bodies, private owners, developers, banks, and legal firms. Invaluable assistance and insight have been provided in many areas of the golf industry, including club and facility operations, new developments, project and membership structuring, hospitality services, strategic planning and market and consumer research.

Strategic Assessment & Membership Survey Key Findings

This summary of key relevant findings is intended to be read in conjunction with the full GBAS slide presentation which can be viewed here.

We are often compared with other clubs in the local area. Where do we really sit? Data research shows Mollymook has the 3rd largest golf membership in regional NSW, and trending against declining membership evident in the wider South Coast market. Between May 2020 and March 2021, Hilltop recorded 28,177 member competition rounds, representing 32% of all member competition rounds played at South Coast clubs.

The data confirms Mollymook is the busiest course within the dataset, causing genuine tee sheet demand.

Membership play at Hilltop is considered ‘high’. In the categories most active (Full, Weekday and 6 Day) the average cost to play falls between $13.01 - $18.58* per round.

Why do we need so many Visitors on the Course?

In 2021 golf subscriptions (membership fees) are forecast to represent 25% of Golf revenue.

2021 Revenues

• $2.9m forecast

• 25% Subscriptions, 23% Green Fees

Mollymook has a heavy reliance on covering member subscription revenue shortfall with visitor play. Fortunately, the quality of the Hilltop course and strong regional tourism well positions the Club to attract green fee players and bridge the revenue gap.

Visitor Value

Mollymook has long been a popular beach holiday destination however the area’s fine food and wine culture has emerged over the last decade, creating a new sector of tourism. Mollymook’s identity as a true culinary destination was born when Rick Stein partnered with Bannisters in 2009 and since then quality venues have emerged such as Cupitt’s Estate and Bannisters Pavilion.

Add the coastal culture and proximity to Sydney and Canberra, Milton-Ulladulla is ideal for weekend getaways, family vacations and trips away with friends. And of course, there is the golf!

Hilltop’s charm has been discovered. Over many years the course has become a household name within the Australian golfing fraternity, well known for the challenging design, picturesque fairways, and coastal location, one recent review compared its similarity to Bonville. In 2020, Hilltop climbed to No.68 in the Top-100 Australian public golf course rankings, preceded by four years of ranking rises.

Due to its popularity Hilltop now attracts a premium green fee which has contributed $750,000 in 2021. Green fee revenue from visitors represents 23% of total golf income.

• 200% average premium achieved in visitor golf over member golf

In the past, tee times have been readily available across the week however that is changing. The challenge now is managing demand and supply. Membership is growing, visitation is at record levels and tee times are becoming increasingly difficult to manage. Some have suggested increasing member access and reducing visitation however it is not that simple.

The Membership currently occupies 75% of total rounds played and to increase that number would place strain on financial viability and ultimately the condition of the course. To maintain revenue, approximately 5 members need to play for every single visitor tee time. Balancing the member to visitor ratio is critical to ensuring long term viability and high standards of course maintenance.

Moving Forward

Benjamin Franklin is famous for saying “Out of adversity comes opportunity”. How much of the ‘new way of living’ will remain or dissipate is yet to be seen, nevertheless, lockdowns and regional town migrations will continue to reshape our journey in the immediate years.

With this in mind, we will focus on two critical objectives in the next 12 months:

• Build on current membership satisfaction levels, and the visitor golf experience.

• Establish the ‘Golf Vision’ and ensure stakeholders understand the strategic direction, objectives, and goals of golf at Mollymook.

Membership Satisfaction

In terms of importance, members ranked the golf course as most valued. This was followed by the pro shop, golf operations and administration. Both the golf course and pro shop were rated as high performing areas, scoring above industry averages. Golf operations and administration are of high importance however returned relatively low satisfaction with both scoring below average industry benchmarks.

The survey report clearly identifies current membership experience could be improved with focus on refurbishing several areas of the Clubhouse and course surrounds, and member engagement.

In pursuit of lifting standards, the following projects are underway:

• Hilltop car park and gardens. Capital investment funding has been allocated and a two-year improvement program has been implemented.

• Hilltop Clubhouse. External building repairs and painting schedule commenced in July. These improvements are the starting point of what will become a longer-term restoration and refurbishment plan.

• Beachside course maintenance. Course upgrade works commence in August and ongoing maintenance will reflect the higher standard.

• Communication and Membership Engagement programs. Establishing regular interaction and engagement through newsletters, digital mail, focus groups and sub-club collaboration.

Solutions to come, subject to appropriate planning and allocated funding:

• ‘Golf Vision’ development workshop to strategise the long-term challenges of a growing membership.

• Additional women only competitions to the weekly schedule and address the imbalance in the membership with the aim to draw more women and girls to golf.

• Assignment of a PGA Professional to Beachside Golf Shop on Tuesdays and Wednesdays to oversee competitions (2022)

• Continue to promote ‘open and inclusive' tee sheet booking policy.

• Foster an improved culture within the membership through leadership and policy. Grow a culture of inclusiveness and equality, providing clear guidelines on member code of condu ct.

• Review the golf merchandise product and pricing strategy to reward loyalty and promote member exclusive pricing.

• Prepare business case to renovate Hilltop locker room facilities.

• Prepare business case to renovate ‘on course’ bathroom facilities.

• Prepare business case to relevel and returf the tees at Hilltop (making them bigger).

• Prepare business case to restore on-course gardens and implement an suitable maintenance program.

• Review Hilltop food and beverage offerings.

The MGC Golf Vision will be shared with members and employees so we can embark on this journey together as a club.