Benchmarking Oro Valley golf
Upon purchasing the El Conquistador properties, the town bought into the idea that the courses should continue to be managed like a private country club. This fact, plus the decline in golf and government competing with the private sector, has created unsustainable losses in town golf operations. In both FY 15/16 and FY16/17 the town lost over $2.5 million or $200,000 per month.
If Oro Valley is to continue to provide golf as a town amenity the question must be asked why can’t we operate the courses efficiently like other communities?
The benchmark for our golf operations should be Tucson’s 36-hole Randolph complex. Randolph achieved a $924,000 profit on revenues of $3.5 million, while our courses lost $2.5 million on revenues of $2.9 million. How can that be?
I am not privy to the detailed financials to compare the two, but my guess is Randolph has more rounds at a better price, and uses dynamic pricing to generate more revenue.
Oro Valley’s course has too much revenue locked in at fixed prices with low member fees. The town needs to increase member fees substantially, or become a public municipal course. I would like see a break even analysis to determine what the member fees should be. My bet is they would double.
The only path forward with a chance of reducing the losses is to become a public facility. Allow the current members that have their own carts and use them at a reduce fee for up to five years, then raise the fee to market rate.
This is my view on the situation, but I do not expect the council to do anything to stop the losses.