4 KPI’s in Revenue Management Explained

Key principles to manage your tee sheet like a superstar

We like to highlight revenue management practices in golf here within this blog because we see it as something that has yet to be fully owned by course operators. No worries if you’re still a bit hazy on acronyms like ‘RevPAR’ and ‘CMIX’.. You can brush up here below and then put these KPI’s to work to improve your golf business.

ORCA Report, a Phoenix-based golf benchmarking company provides data-driven monthly reports to its clients across these four key performance indicators that empowers golf courses with competitive analysis and better revenue management.

If you aren’t measuring the right things to begin with, you’re not going to get better results by measuring them more accurately.

1. Occupancy Percentage (OCC %)

How full is your tee sheet? OCC% analyzes rounds played divided by available inventory. In order to calculate this KPI, first you need to identify your capacity. For instance how many rounds are available in a given day? Generally golf courses include all rounds withn 30 minutes of sunrise and sunset on the bookends of the day. On 9 minute tee time intervals that amounts to 28 rounds per hour. Now you can divide all rounds played against the available inventory. The higher the number the better! Popular and well managed hotels might run at 88% occpancy. Anything in the 70 percentile and above is extremely competitive.

2. Revenue Per Available Round (RevPAR $)

This is the KPI that stands out to most expert revenue managers or consultants analyzing a golf operation. Revenue per available round (RevPAR) is calculated by simply taking revenue captured from green fee sales and dividing it by the capacity for the same period of time. This KPI will give you a good indication of your success of generating revenue against capacity.

3. Channel Mix Percentage (CMIX %)

With the advent of 3rd party OTA’s and other wholesale aggregators, it’s important for a course operator to arrive at a figure that is representative of what direct business a golf course is deriving vs through marketing channels. Direct channels can encompass phone, email, messaging, in person or bookings through your own website. In direct is classified as 3rd party marketing channels. This KPI calculation is rounds booked direct divided by all rounds played.The more direct rounds a golf course can generate the less commission / barter they must payout and allows the course to ‘control their own destiny’ nurturing a direct relationship with the customer. However, at the same time aggregators have reach and digital competency that can bring you harder to reach customers (international) or incremental business. A healthy channel mix of 3rd party business should not exceed 20%.

4. Average Rate Per Round (ARPR $)

This KPI is most broadly used calculation by course operators especially when comparing their golf course with a competitive set of neighbors in a particular market. Calculating your average rate per round is super easy. You simply calculate the total green fee revenue generated and divide by rounds played. When you take this metric and segment a particualr day or time of the week it allows course operators to begin to analyze alongside occupancy levels. That way you can decide whether you’re priced just right or you could bump up your rate a couple of dollars.