Price fixing is when several golf courses in the golf industry collectively establish the price a given golf product or golf service will be sold for and agrees to stick with it.
Over the years I have been in the golf industry, I have come across one or two golf clubs that have shared with me they and their competitors have agreed to keep their green fees and/or golf memberships at a certain rate. They chose to do this so they could fix or set the price for golf within their community.
This is a good idea theoretically, because you are made to believe you can then command a higher price for your golf products and golf services. But in reality, this system doesn’t work for numerous reasons. One of the reasons is one or two golf properties within the agreed area are always going to struggle and they are normally the weakest link in the chain.
When this happens (and it will), they start to resent the other golf courses and golf course owners which then turns into animosity amongst friends. This is when everyone starts to lose and everyone starts doing anything they can to get business in the door.
Another thing that we have seen is when everybody has agreed to set pricing, there will be one golf club that decides to go out on their own and do something different because what’s working for everyone else is not working for them. This creates animosity as well.
The best way to run a golf course is to run it like any other business and that is, run it your way. It’s just like in fighting; you never ever want to fight the other person’s fight. If someone is a boxer and you are a wrestler you don’t want to stand up and box with him. You want to get him on the ground as fast as you can. The same thing goes for business; you want to run your golf club in a way that’s going to be successful for you. You want to highlight your strengths and minimize your weaknesses.
Price-fixing can never work for all golf courses. It is good for the golf courses that are doing well and those that have deep pockets but for those golf courses that depend on memberships, daily green fees, and new golfers this is a disaster waiting to happen.
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