New GolfNow Programs: Clearing up Confusions and Misconceptions
“Overall, I just feel like it is shady business practices and makes us spend more time than needed going back and forth with them to get a mutual agreement in place.”
– Savvy Golf Course Operator
There seems to be a great deal of backlash and misunderstanding behind a few programs recently put into effect by GolfNow. A quick primer on barter: Golf courses and OTTAs that engage in barter typically mutually agree on two key components for trade times: 1) when the trade time will be posted and 2) the rates at which the course will the OTTA to advertise its tee times. For example, a golf course might choose the 6am and 10am slots as their designated trade times. In a traditional trade time agreement, the OTTA would only be allowed to sell trade times on behalf of that particular course, at the 6am and 10am slots.
Trade times with Rolling terms are defined as: a single trade time made available by GolfNow for its own benefit. Rolling trade times can refer to either trade inventory that rolls to other tee times throughout a single day or the rolling of trade times that go unsold from one day to the next day until the monthly trade allowance is met.
For example, when a course gives an OTTA the 12pm trade time with rolling terms, the course is not restricted from selling that tee time at rack rate on its own. In this case, if the course sells the 3 of the 4 slots in the 12pm trade time (at full rack rate) and the OTTA sells the remaining slot, the 3 other slots for trade inventory that were not sold by the OTTA are rolled over to other tee times throughout the day until the OTTA has sold all 4 slots (assuming it was given 1 tee time per day). This sometimes can lead to the appearance of more trade times appearing on the tee sheet than the course originally offered to the OTTA, but those trade times will not have availability for 4 golfers in each slot.
Trade times that roll over from day to day occur when a course is able to sell the entire 12pm trade time on its own, at rack rate, resulting in no revenue to the OTTA. In this instance some OTTAs have the technology to automatically roll that trade time to the next day.
The technology used by the Orlando-based OTTA responds to any tee times the golf course sells on its own, by simply rolling the trade time to the next available slot. The technology rolls it ahead or after, based upon what it window it thinks is more likely to sell better. In this case, smart operators will ask for a specific roll window and work to minimize or eliminate that entirely.
Contact your local rep, regional director, or us here at the Tee Time Coalition for more assistance with this issue. It is imperative that you review and work to change your current contracts with OTTAs employing the tactic of rolling trade times. The new contracts have verbiage that should be reviewed immediately. If you find that language regarding rolling terms has been added to or is included in your terms, please address this with your OTTA immediately.
Looking at it from the OTTA’s perspective, in trade agreements, their only form of compensation from golf courses is via barter sales. In the past that has led to some erosion of rates to the point that the golf courses experienced battles over customer booking loyalty and changes to the perceived value of the golf course due to increasingly low rates offered by the OTTA. Perhaps, rolling trade times throughout the tee sheet (even into timeframes where the demand was at a premium) would allow the OTTA to regularly sell its trade inventory, sell it at higher prices, thus making itself more money and eliminating any issues regarding the rates at which barter is sold.
But we have to remember the pitch that accompanied barter in its infancy, “give us your least desirable tee times, the ones that often times go unsold, and let us sell those for you and that will be how you pay us for software and services.” Rolling terms on trade times does change that quite a bit.
Let me be clear, I think operators should only agree to rolling terms that come with fences or windows. Fences refer to the time frame for which an OTTA is prohibited from rolling a trade time. For example, a course may say, “I will give you the 12pm tee time and you can roll it two hours ahead until 10am, but not prior to that because I have steady play before 10am.” A window would operate similarly but a course could dictate how far before and how far after the designated trade time, an OTTA would be allowed to roll the trade times. For example, “OTTA can roll trade times no earlier than 2 hours before the 12pm time or 2 hours after the 12pm time.” In this example the window that trade could be rolled is 10am-2pm, with the actual trade time being 12pm.
GolfNow is one OTTA that allows the course to take reservations even during the trade time window, while EZLinks will place a hard block on the 12pm trade time. If an OTTA’s marketplace and marketing power isn’t good enough to sell a tee time a day, then it isn’t worth allowing the times to roll throughout the month. All owners, operators, PGA professionals and persons responsible for managing the relationship with OTTAs should immediately tell their regional Market Sales Manager or local reps to explain how rolling trade times work.
Pay Now & Save
Pay Now & Save is a new program that was rolled out about a month ago that gives the golfer the opportunity to book a tee time on at any time (within any fence/window parameters) throughout the day at 10% discount. The difference is that these tee times are non-refundable as opposed to the tee times owned by the course that offer more security in the booking. The hope for GolfNow is that data will show that golfers are more likely to spend the extra $3 for the security the course-owned tee time offers while also helping solve any issues associated with deep discounting via barter. GolfNow is collecting Data on this is will likely be able to determine whether or not the trend has increased the number of course tee times booked by golfers as opposed to trade times.
According to the new contract used by GolfNow, going forward they will include this new “Pay Now & Save” in the contract as well as a section about not refunding oversold trade, but instead turning it off once they are notified, for the amount of days oversold.
Example: OTTA “accidentally” oversells 12 trade rounds over Memorial Day weekend (a busy weekend, with a high demand, taking 12 rack rate customers from the golf course), if the course is aware of the oversell, the OTTA will turn off the “Pay Now & Save” for the next three days (Tuesday – Thursday). However, these days have low sell through rates anyway, so the OTTA is selling more trade at better times and days. If this happens and the golf course does not notice, trade will continue to be posted as normal. The contract does state, however, that they will pay back courses if the oversell totals more than $1500. This might protect the relationship that exist with larger clients, but also put the single course operator at a disadvantage.
I do think the GolfNow attempted to address the issues of discounting by offering higher prices on trade inventory, but to do it while rolling the trade times into more desirable tee times at the expense of the golf course is being seen by some as an oversight to say the least. These program rollouts should always be vetted and communicated properly to the golf courses. It is my understanding that these programs rolled out initially to 200 or so courses and then expanded to another 800 courses that did not have any restrictions within their agreements.
This is a proactive way that GolfNow has addressed concerns from golf courses about rates related to trade. Once sufficient data is collected, GolfNow expects that it will show that golfers are more likely to spend an extra few dollars for the security that comes with the course-owned tee time.
My recommendation: Talk to your GolfNow rep. Get the skinny on this. Ask to move some trade times around. Think about whether or not you want windows and fences. As seasonality demands change, so does the desirability of certain tee times. You may receive a new agreement that has these addendums in it, in the event your current contract does not. The overall takeaway here is that we should be fully informed before making any determination about new programs offered by OTTAs.