Dynamic Pricing Strategy in the Golf Industry

Nov 6, 2017

Warren Pitman on Dynamic Pricing

By Warren Pitman

Golfers around the United States are becoming more familiar with golf courses using dynamic pricing strategy to sell tee times.

What is dynamic pricing and why is this business practice important?

Dynamic pricing is a way to maximize revenue for a perishable commodity like a tee time, a seat at a baseball game, a room in a hotel or a ticket for air travel. All of these are perishable and all but the golf industry have fully embraced dynamic pricing in some form or fashion. For example, did the person sitting next to you on an airplane or the person occupying a room next door to you in a hotel pay the exact same price? Probably not.

Why Use Dynamic Pricing?

People are willing to pay for what they deem to be of value. Matching what a customer thinks is valuable and what a business either knows or thinks is valuable is the essence to dynamic pricing.

For example, through observation and some research by GolfNow and EZ Links it has been shown that the tee times at the top and bottom of the hour are more valuable than those on any other intervals. The 9 a.m. Saturday morning tee time is the most valuable tee time because the demand for that time is the highest. Golf operators can get more money for that tee time because of this demand.

Another example is the first tee time of the day. Golfers that play quickly find this to be the most desirable. They can complete their round and do not have to worry about a slow pace of play because of waiting on groups in front of them. Golf course operators can charge more for these times and get it!

Dynamic pricing says in times of high course utilization or for desirable tee time intervals that the rate should increase over that which the course would normally charge.

Why have a set rate for a set time when, with today’s technology, configuring dynamic pricing is as simple as setting up the rate fencing policies on software programs? The software is readily available by industry leaders like GolfNow, EZ Links and others.

We have the technology, so why not deploy the necessary tools to maximize revenue and increase the golf course’s bottom line?

Warren Pitman is a PGA Professional and instructor at Golf Academy of America in Phoenix.