C4K-Ref- BAC - Strategic Pricing For MB Golf Club And Normandy Shores Golf Clubg MIAMIBEACH
City of Miomi Beoch, 1700 Convention Center Drive, Miomi Beoch, Florido 33139, www.miomibeochfl.gov
COMMISSION MEMORANDUM
Mayor Philip Levine and Memb"* t the City
Jimmy L. Morales, City Manager
{-..-\
September 10,2014
\
SUBJECT: A REFERRAL TO THE BUDGET ADVISORY COMMITTEE FROM THE
FINANCE AND CITYWIDE PROJECTS COMMITTEE TO DISCUSS
STRATEGIC PRICING FOR MIAMI BEACH GOLF CLUB AND NORMANDY
SHORES GOLF CLUB; AND REVIEW OF THE PREMIER
GOLF CARD.
BACKGROUND
At the August 29th, 2014 Finance and Citywide Projects Committee meeting a discussion took
place regarding offering the management company flexibility in setting strategic pricing during
certain times of the year. Additionally the committee briefly discussed Miami Beach's involvement
in the Premier Golf Card. Both items were referred to the Budget Advisory Committee for more in-
depth conversation with the strategic pricing component being put on a deadline to return to the
Finance and Citywide Projects Committee no later than November.
Attachments:
Premier Card Background
Premier Card Final Monthly Rounds 2013
Premier Card Final Distribution 2013
JLM/
T:\AGENDA\2O'14\September\Parks & Rec\Referral to the BAC From FCWP to discuss Strategic Pricing for MBGC and NSGC and Review of
Premier Card MEMO.docx
Agenda ltem CY/<
Date ?-/O-/q
FROM:
DATE:
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City of Miami Beach
Premier Golf Card
Background
The summer period is a very challenging time for golf course operators to generate play.
The weather conditions, heat and reduced tourist based business requires management to
generate rounds from local and regional golfers. The summer golf market is highly
competitive with courses substantially dropping their golf fees, developing marketing
packages which may include driving range balls, reduced priced food and beverage,
discounts for multiple rounds purchased, etc. A summer membership program is one of the
most common methods used to attract golfers, increase revenues and reasonably insure
an increased number of golf rounds during the slowest time of the yeat.
Premier Card Overview
The Premier Card was started by PCM in 1990 and has been in continuous operation for
25 years. Premier Card offers a summer membership program which for the summer of
2014 includes 18 of the finest public access golf courses in Miami-Dade and Broward
Counties. The program was conceived and developed with the sole purpose of increasing
play and revenue at participating courses during the traditionally slow summer months with
all the revenue generated by the card sales, less marketing and administrative fees and a
management fee of $5,000 per club, going to the participating courses.
Fifty percent of the income generated by the card sales (after marketing and administrative
expenses) is distributed equally among the participating clubs; the remaining fifty percent
of revenue is distributed to the clubs based on the percentage of rounds played at each
golf course.
Since its inception and despite a difficult economic environment, the Premier Card
Summer program has had accelerated growth in the number of participating clubs, card
sales and revenue. This year's forecast projects more than 8,000 in Premier Card sales
and an excess of $5,000,000 generated for participating courses in revenue from card
sales, cart fees and increased memberships. These results make the Premier Card
Summer program the most successfuljoint summer membership program in the Country.
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Page 3 of 6
The clubs participating in the 2014 Premier Card Summer Program are:
Miami - Dade County
Country Club of Miami
Crandon Golf at Key Biscayne
lnternational Links Miami
Shula's Golf Club
Miami Beach Golf Club
Miami Shores Country Club
Normandy Shores Golf Club
Broward County
Carolina Club
Grand Palms
Bonaventure Country Club
Hillcrest Country Club
Jacaranda Country Club (East and West)
Pembroke Lakes Golf Club
Plantation Preserve
Deer Creek Golf Club
Woodmont Country Club
Seven Bridges at Springtree
Historica! Data
Prior to participating in the Premier Card Summer program, the City of Miami Beach
offered summer memberships at the Miami Beach Golf Club (Normandy Golf Course was
closed at that time). ln 2003, the first summer membership program was implemented,
offering a single resident golfer a membership valid from April 1sth to September 30th. This
membership included unlimited green fees for the price of $1,000 plus a cart fee of $20.00
per round. The initial program sold 66 memberships and generated $126,088 in revenue.
ln subsequent years, the City implemented similar summer golf membership programs
whereby its most successful year, 2005, saw a total of 126 memberships which generated
revenue of $213,706. Moreover, prior to participating in the Premier Card Summer
program, the Miami Beach Golf Club offered Premier Card holders the option of playing
the course Monday thru Thursday for a rate of $50.00. Yet, this generated limited play and
minimal revenue.
During the 2008-2009 financial crisis, particularly the winter of 2009, the Miami Beach Golf
Club experienced a substantial decline in projected revenues. The widespread cancellation
of group business; coupled with the poor responses to prior summer membership
programs and the shortfall of projected revenue dictated the need to develop a new
revenue stream. After researching the Premier Card Summer program, it was determined
this would be the best solution to the slow summer season. Thus the Miami Beach Golf
Club and Normandy Shores Golf Club became full Premier partners in 2009.
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Benefits to the Miami Beach and Normandv Shores Golf Glubs
The City of Miami Beach golf clubs began participating as full partners in the Premier Card
Summer Membership Program in 2009. The following is a summary of annual revenue:
Miami Beach Golf Club Normandy Shores Golf Club Total
2009 $623,788
2010 $657,931
2011 $688,157
2012 $628,316
$440,373
$479,835
$535,559
$395,998
$1,064,161
$1,137,766
$1,223,716
$1,024,314
$1,093,941
(Golf courses c/osed for a combined 42 days due to record rainfall)
2013 $678,232 $415,609
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