OCEAN CITY — Golf has been a big draw in the coastal region for decades, but some fear that a rising trend in “discount golf” sites could eventually have an adverse impact on the entire industry and the local market.
Third party aggregator websites, such as GolfNow.com, which fills open tee times at sharply discounted rates at courses all over the country, similar to what aggregator sites like Travelocity.com and Expedia.com do in the hotel industry, have exploded in popularity in the past several years.
Golfnow.com, which is owned by the Golf Channel, has led a revolution in online bookings of tee times, filling more than 15 million tee times at more than 9,000 courses nationwide in 2015 at discounted rates.
In 2012, the company spearheaded a national advertising campaign calling the rates being charged by golf courses across the country “preposterous.”
Third Party Sites’ Impact
On Industry Weighed
Veterans of the industry and experts in the business, like Hunt Crosby, the general manager of River Run Golf Course, say while third party sites help the golfer, the practice is slowly crippling the very courses where the golfers want to play.
“Third party aggregator sites are going to be the death of the golf business,” said Crosby. “Some courses see this as a way to fill their openings in exchange for marketing help, but they don’t realize that they are hurting themselves in the long run and creating this race to the bottom for everyone.”
Crosby says although he was the last person in the region to agree to use third party aggregator websites, he gave in eventually.
“If you can’t beat them, you almost have to join them,” said Crosby. “As they grow in size and get more people signed up, they begin to dominate the space. So, if someone looks to go play a round of golf on the Internet, they won’t find your course on the first page of searches, they’ll find an entire list of aggregator sites.”
But, according to Nancy Dofflemyer, the golf director at Harrison Group Golf, the Ocean City market is sort of insulated by the impact the rest of the golf industry is feeling from third party aggregator sites.
“We are a destination golf business,” said Dofflemyer. “That means people are planning their trips months in advance, and we are putting together their entire package from their hotels to their rounds of golf. These apps and websites are usually for off-tee times, for foursomes only and only apply to the golfer trying to book at the last minute.”
Yet, Crosby argues that increased technological options has changed how consumers are purchasing, pointing to how hotel guests are much more last minute when booking a room, knowing that the price will likely drop.
“If you get a discounted rate by waiting until the last minute for a hotel room or a round of golf, that becomes the new price you are willing to pay for a room or a tee time,” said Crosby. “The Internet has completely changed the consumer. No one buys retail anymore.”
The Economic Crash’s
Impact On Local Golf
The proliferation of these sites may be one reason for concern, but couple it with that fact that the golf industry has become overbuilt from a supply and demand perspective since the early 1990’s, and the concern intensifies, according to Crosby.
“Back in the early 1990’s, golf courses were going up left and right and there became too many courses to fill with all the golfers who could play,” he recalls, “but after the economic crash, the downturn hurt the golf business even more than the oversupply of courses did.”
The National Golf Federation estimates that between 1986 and 2005, more than 4,500 18-hole golf courses were built in the U.S., with more than 400 courses being built annually in some of those years.
In 2006, more golf courses closed than opened for the first time since 1986, and according to a 2013 report by the National Golf Federation, the economic downturn started a streak of bad years for the golf business that they called “market correction of golf course supply.”
For seven straight years, more golf courses closed than opened throughout the country. In 2012, only 13 courses opened, while 154 courses closed.
Today, the NGF estimates that no more than 20 courses will be built annually, while expecting 130-150 courses to close each year.
Here on the shore, a few local courses have reportedly closed in recent months, including the Deer Run Golf Course on Route 50 west of Berlin and Nassawango Country Club in Snow Hill.
“The overabundance of supply coupled with the driving down of golf prices by these sites is going to put some courses out of business eventually,” said Crosby.
A New Digital Option
Damon Klepczynski is a PGA professional in Maryland and the founder of Digital Golf Pass, which is a next generation golf pass-book that allows players to redeem deals on their phones. In a little more than a year, DGP has grown rapidly with a presence on more than 236 courses and facilities in the Mid-Atlantic region alone.
He says Digital Golf Pass is different than the third party aggregator sites, even though both offer discounted tee times to golfers.
He says it comes down to transparency.
“What golf courses don’t understand is that they agree to allow for a third party site to fill their open tee times because they’d rather make a little bit of money than none at all,” he explained. “But, what they don’t realize is what they are giving to the third party site on the backend, which is usually all their marketing information for their former clients via their booking search engines, is allowing the third party site to scoop up all their clients and offer them discounted rates at other courses.”
Klepczynski says for $60 a year, his members can get discounted rounds of golf at a growing number of courses, but from the golf courses’ perspective, he claims Digital Golf Pass is a better option than the aggregator sites because it works with the golf course to give it the power to control the discount and keep their information.
OC Golf Market Unique
Compared To Competitors
Josh Esworthy, owner and operator of 19th Hole Golf, helped people book more than 1,000 rounds of golf last year at local courses. Over the course of the past five years, despite the rise in third party aggregator sites, he has watched his business grow.
“People like a personal and professional approach and I think the Ocean City golf market is unique compared to other markets. So, we don’t feel the effects of the discount sites quite as bad,” he said. “For the most part, the golfers in our market are not looking to book their rounds last minute, even though I will say people are always trying to look for a good deal.”
Walter Brooks, chief operating officer of OC Golf Getaway, agrees.
“These sites are the next version of what we are seeing in online marketing,” he explained, “but for our market people aren’t waiting until the last minute. Our numbers have stayed pretty flat over the past few years. It’s not that we have fewer golfers, we just have golfers playing less frequently.”
Brooks says the golf industry is still recovering from the economic downturn and admits while the supply and demand issue will continue to right itself over the next few years, he’s confident that in Ocean City, golfers will still be looking to hit the little white ball around local courses when the sun is out.
“I feel very good about where we are as an industry right now,” said Brooks. “Our bookings for spring look good and they keep getting better as the season gets closer. It’s definitely going to be a challenge in the next few years for everyone in the golf business, but we are always going to have a high level of golf on quality courses here, and that keeps me feeling optimistic about the future.”