Membership versus green fee pricing for golf courses: the impact of market and golf club determinants

ABSTRACT

Research question: Golf courses generate revenue from two sources: memberships and green fees. Particularly in Europe, golf clubs rely on income from memberships. We examine the factors that are generally relevant to golfers when paying green fees or becoming club members. We compare the findings to evaluate the differences between the two revenue sources.

Research methods: We compile a database of N = 669 German golf courses for the 2015 season to test the hedonic price models of membership fees compared to green fees on both weekdays and weekends. In addition, beyond the attributes of golf courses that are usually investigated in the literature and can be characterized as market determinants, we capture management determinants such as quality certificates. A comparison of the log-linear ordinary least squares and quantile regressions on the three price constructs reveals fruitful insights for price differentiation.

Results and findings: The empirical analysis indicates that the dispersion of membership fees among golf clubs can mainly be explained by differences in the number of holes, the golf course’s difficulty, its proximity to a large city, and two certificates. For the pricing of green fees, the number of holes, a competitive market situation, and the course’s difficulty and age are important factors.

Implications: The findings indicate not only the similarities but also the differences between memberships and green fees. In terms of practical applications for golf clubs, developing group-specific marketing strategies and suitable offers for club members and guest golfers would help improve long-term club viability.

KEYWORDS:

• Management
• Europe
• finance
• pricing
• sport clubs

Disclosure statement

No potential conflict of interest was reported by the authors.