Feeling misled by a consultant who advised dropping fees at Inver Wood Golf Course, the Inver Grove Heights municipal golf course next year will reverse the strategy and raise greens fees by 10 percent.
To help the city weather a slump in golfing tied to the weak economy, "The consultant said if we lowered our revenue per round, we would do better on the volume side and we would make more money," said golf course manager Al McMurchie.
After fees were dropped May 1, 2010, the number of rounds of golf played did increase as the consultant predicted -- by nearly 10 percent.
But the lower fees did not draw enough new golfers to make up for the money lost.
For the first time in the course's 17-year history, revenues did not cover expenses. It ended 2010 with a $105,849 deficit. A similar deficit is expected this year, McMurchie said.
"The experiment didn't work. We need to go back to the way we were doing it and try to maximize revenue and minimize expenses."
After the rate reduction, the city made $28.24 per round of golf versus $30.36 per round before the rates were lowered. "We're moving in the wrong direction in revenue per round," McMurchie said.
The mayor and City Council members received his report Nov. 14.
McMurchie said he is optimistic that Inver Wood will return to the black if rates are raised again because the course made a profit even in 2008 and 2009, the first two years of the downturn, he said.
The "new normal" in the industry is to break even, he said. "If you do that, you are doing quite well."
Proposed fee increases vary by time and golfer category. The weekend fee for the 18-hole course is proposed to rise from $36 to $39.60.
The rate for seniors is currently $12.75 for nine holes and that may be nudged to $13.50 or $14, McMurchie said.
The course has 18 holes, a short nine-hole executive course and a driving range. This year, driving range service was automated to eliminate the cost of attendants. Golfers buy balls with a credit card.
That change will help reduce course expenses, McMurchie said.
Inver Wood also allows golfers to reserve tee times online. Twenty percent of reservations were booked via the Internet this year. McMurchie said he is considering extending the advance booking time from three days to a week.
The tight time frame for booking tee times goes back to when demand for golf was high. "Now it makes sense to widen it," McMurchie said. "We are just trying to get over this bump in the road that we have hit nationally on the economy."
Laurie Blake • 952-746-3287