Since it reopened to the public in May 2018 after a two-year closure, Palo Alto's reconfigured and refurbished golf course in the Baylands has seen a healthy surge of players and plaudits.
Revenues, however, remain below the city's projections — a function of weaker-than-expected merchandise sales and the difficulty of getting to the course during weekday commute hours, according to city staff.
The Baylands Golf Links, which replaced the former Palo Alto Municipal Golf Course at 1875 Embarcadero Road, saw overall revenue targets fall about 6% below projections, according to a report that the Parks and Recreation Commission received on Dec. 10.
In accordance with the renovation plan approved by the city, the reconfigured golf course design was developed to enhance wildlife habitat, improve wetland areas and reduce usage of potable water, pesticides and maintenance labor for turf and landscaping.
Prior to reopening, the city sought a proposal from golf management companies to oversee all golf course operations, including golf play, course maintenance, practice facilities, merchandise sales and food and beverage services. Upon City Council approval, OB Sports was selected to manage the new golf course, Baylands Golf Links.
When the course reopened, green fees were based on "dynamic pricing," with rates fluctuating depending on the time of day, day of week and demand. Additionally, green fees were tiered with Palo Alto residency, Bay Area residency and visitor rates. The combination of both dynamic and tiered pricing has resulted in strong green fee revenue to support operating costs.
"The dynamic pricing is the key factor in maintaining our revenue stream," Open Space, Parks, and Golf Superintendent Lam Do said.
According to the latest data, while green fee revenue exceeded projections, revenue from merchandise sales fell below target. As a result, when considering overall revenue, golf operations ended fiscal year 2019 at 6% under target. Since OB Sports operates the Baylands Cafe under a lease, food and beverage sales are not factored in the golf course's operating budget.
Commission member Jeff LaMere raised a question about repurposing the sales floor for other uses such as an educational space or socialization area. Do said they are working to make better use of the space for everyone and are looking into bringing in more traffic through teaching simulators.
With numerous retail and online vendors competing for golf merchandise sales, it comes as no surprise that the golf shop revenue trails behind. But that doesn't explain why golf rounds played were below projected rounds.
City officials expected the total of rounds played to be lower than ideal at first but then continue to grow over several years as golfers either returned to the links-style course or new players discovered it.
The report notes that 54,619 rounds were played in fiscal year 2019, higher than each of the three years prior to course closure. The former golf course showed a steady decline in rounds played, which went from 46,527 in 2014, to 42,048 in 2015 and to 35,354 in 2016, respectively.
Overall tee time utilization for Baylands Golf Links is at 72% compared to 56% for local municipal courses. Do said that there is room for improvement but it is a fine line to balance more people on the course without compromising pace of play.
"It's a tough line to manage, we want to get more players on the course but we also want to make sure there is proper pace of play," Do said.
From July to September 2019, weekend utilization of the course was 81% while weekday usage sat below at 67%. To not impact the pace of play on the weekends, Do said the city would like to see increased utilization during the weekdays where there is more availability.
But, the challenge of weekday play comes from dealing with commuter traffic. Given that the course is situated along the U.S. Highway 101 corridor, players usually have to deal with traffic congestion either on their way to or from the course.
According to the report, player residency on the new course consisted of 80% from Santa Clara and San Mateo counties. Palo Alto residents made up 27% of golf rounds played compared to about 13% on the previous course.
To promote more golf play, OB Sports is offering its membership program, known as LinksCard, at a discount rate and offering certain tee time slots for non-members at discounted rates.