Guest Speaker: The Theory Behind Dynamic Pricing

Chris
EZLinks Regional Manager Chris Witham explains the benefits of dynamic pricing.

We had a really interesting guest speaker today in Management Study of Golf Operations. Chris Witham is a Regional Sales Manager at EZLinks Golf LLC, a PGA Tour affiliated company. Chances are, you’ve never heard of EZLinks, but you’ve probably heard of its online tee time retail service, TeeOff.com, now competing head-to-head with GolfNow.

EZLinks is the industry leader in “software and services to power the operations and marketing needs of the golf industry.” Simply put, EZLinks provides the software many golf courses use to manage their tee sheets, point of sale systems, and online reservations.

EZLinks was acquired by the PGA Tour in June of last year, which is part of the reason for TeeOff.com’s rise in exposure and popularity. Their commercials are airing during Tour events and TeeOff.com ads are being posted on leaderboards at tournament sites.

But here’s the statistic that came as news to me: as late as 2014, just 15% of all the tee times booked were booked online, and less than 1% of those tee times were booked through GolfNow.com. About .5% were booked through TeeOff.com. If you’re like me, you probably thought GolfNow was dominating the online tee time reservation industry and that there was a chasm between No. 1 (GolfNow) and No. 2 (TeeOff.com). That’s not the case.

According to Chris, EZLinks is a point of sale-driven company. Chris told us with fewer people playing golf (and that number decreasing year after year), the best way for a golf course to make more money is to make more dollars per round. To make more dollars per round, a course has to charge more for each round. The easiest way to do this is through a dynamic pricing strategy.

There have been several articles written on the subject of dynamic pricing. Here’s why courses are considering the practice:

* 40% of reservations are made withing 24-48 hours of the tee time selected
* A 9:00a tee time is worth 8% more to a golf course than a 9:08a tee time. Just eight minutes is worth an extra 8%!
* Golf courses that utilize dynamic pricing see a year-over-year increase in tee time revenue of 15%

These companies are currently using dynamic pricing with little to no backlash from consumer.
These companies are currently using dynamic pricing with little to no backlash.

A lot of courses nationwide are still afraid of the the backlash they’ll incur if they switch to a dynamic pricing model, but several courses in Arizona alone have mastered dynamic pricing through their own individual web sites. Quintero Golf Club in Peoria offers special tee times to Arizona residents, but only offers tee times through its web site.

Since transitioning from private to semi-private and hiring the services of EZLinks, Quintero has more than doubled it’s number of tee times and increased its online reservations more than 4,000%. There is a tee time for every price point. If playing early is your thing, you’ll pay slightly more than if you pay later, and if you pay right away through the web site, you’ll save anywhere from $10 to $30 than if you elect to play when you arrive at the course.

Quintero is a dynamic pricing success story, but Southern Dunes Golf Club is a dynamic pricing juggernaut. The course has all but mastered the process and even posts an explanation in defense of dynamic pricing on its web site. The explanation reads:

By definition, dynamic means “constant change.” At Ak-Chin Southern Dunes, we prefer to view dynamic as “progress.” This process will allow golf rates to be adjusted – both lower and higher – in real-time, based on demand, availability, and other changing factors. While this style of pricing may be new to the game of golf, airlines, hotels, and now even your favorite sports teams have been utilizing this pricing strategy for years.” With rates changing daily, Dynamic Pricing give you the ability to choose the RIGHT rate for you, at the RIGHT time for you, on the RIGHT day for you. The earlier you book, the MORE you SAVE!

Static vs. Dynamic pricingIt’s a very compelling argument in favor of dynamic pricing. And it’s working! Southern Dunes Golf Club is in the middle of nowhere Maricopa, Arizona, and as I sit here writing this at almost 8:00p on a Thursday night, the earliest I can book a tee time is tomorrow afternoon at 2:30p.

This article has 1 Comment

  1. Of all the guest speakers we’ve had at the Golf Academy, I found this to be the most interesting. It boggles the mind that every golf course is not doing this. Hotels and airlines have already figured it out, so why not theaters, restaurants, and any industry with a fixed service? This is the future of pricing. Either the golf industry gets on-board or goes out of business!

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