How to Price Tee Times Using Supply and Demand

Golf courses are one of the last experiential businesses still relying on static pricing. Hotels, airlines, and sports venues all use demand-based pricing to optimize revenue because they understand that their inventory is perishable and the product varies based on timing, seasonality, and conditions.

The same principles apply to tee times.

Step 1: Understanding Demand Patterns

Golf operators inherently know and understand that demand varies depending on multiple factors such as:

• day of week
  
• time of day
  
• seasonality
  
• weather

For example, it's almost always the case that Saturday morning demand may be multiple times higher than Tuesday afternoon. Most courses price these tee times differently based on this understanding, but then they fail to take it a step further by incorporating day parts, special events, holidays, weather conditions, etc. for an even more accurate and sophisticated pricing strategy.

Step 2: How Analyze Booking Pace

Booking pace is the speed at which tee times fill. If a tee time is filling faster than usual, demand is higher than expected.

This signals the opportunity for price increases and the need to understand what factors may be driving this influx for future pricing scenarios.

Step 3: Adjust Prices Based on Lead Time

By understanding when golfers book, then we can best determine when prices should rise, hold, or drop.

Last-minute bookings may pay more when demand is strong. This encourages golfers to book earlier, which has positive downstream effects across the operation.

For example if bookings follow: 20% a week or more out, 25% more than four days out, 25% two days prior, 20% the day before, and 10% day of, then the course's strategy should be to hold or even increase prices at the last minute as opposed to discounting, because 55% of bookings will occur just two days before tee off.

Step 4: Use Data to Predict Demand

Modern pricing systems analyze historical data to forecast demand. This removes guesswork from pricing decisions.

If your pricing system is reactionary and just increases price as occupancy increases, then you're leaving money on the table and ignoring factors like golfer satisfaction and price sensitivity which can lead to negative outcomes.

Step 5: Optimize Revenue and Occupancy

The goal is not to simply raise prices or even increase occupancy. The ultimate objective is to balance price, occupancy, and customer satisfaction.