MAY–JUNE 2004 COVER STORY

VISIBLE DIFFERENCE

In the Absence of a High-Profile Location,
Marketing Miniature Golf Is Key

By Kristen Caldwell

Situated on a well-traveled road that winds through a purely residential market in Riverview, Fla., Ace Golf Range possesses a clear competitive advantage over its two sister facilities in the Tampa Bay area.

“The other Ace Golf Ranges are located in strong business areas where they do a good lunchtime crowd or [get] people who stop on their way home to hit a bucket of balls,” says Riverview General Manager Steve Hughes. “We are home. We get the families.”

Opened in May 2003, the 18-acre Riverview is also the largest of the three facilities with a driving range, chipping and putting greens, pro shop, batting cages, arcade and a miniature golf course that those families (constituting nearly 77 percent of the market) keep busy.

“We do much, much more business with miniature golf than [selling] range balls,” confesses Hughes. That’s not surprising given the facility’s highly visible location and strong family demographic—two market conditions miniature golf experts cite as essential for success.

“Miniature golf is a location-sensitive business,” says Burdette Bremer, sales manager for Castle Golf Inc. in Mesa, Ariz. “Out of sight, out of mind” isn’t a cliché in this industry, he adds. Courses need to be visible to create top-of-mind awareness among consumers.

For Hughes, visibility goes beyond physical location. With an extensive marketing plan that targets schools, day care centers, churches, retirement communities and homeowners’ associations, Ace Golf Range isn’t relying on ideal market conditions to keep its miniature golf course on area residents’ to-play list.

“When we first opened, I would go out to schools and instead of giving 150 coupons to teachers to give out with report cards, I would give 500,” Hughes says.

Although this approach has paid off, operating a miniature golf course that turns a bigger profit than the driving range conflicts with the view of some industry insiders who suggest that mixing family recreation seekers with more sports-minded consumers is a paradox. The logic lies in the profit potential. In the 1980s, the amusement industry realized that miniature golf, which had previously been a stand-alone resort attraction, increased per-visit sales for the facility as a whole when it was married with other amenities. “People found that combining miniature golf with other attractions created a synergistic effect on the length of stay by patrons and subsequently, the per-cap spending rate,” says Steve Hix, executive director of the Miniature Golf Association U.S. in San Antonio. Thus, the term “family entertainment center” was coined to describe a loose combination of attractions, with the most traditional being miniature golf, go-carts and arcades.

Though driving ranges technically fall outside this realm of family entertainment, about 30 percent of the estimated 5,000 miniature golf courses in America are paired up with a golf practice facility, and those operators who know their market and cater to it are doing well, even in the absence of a dense population and curb appeal.

Making Up for Market Insufficiencies
Building a miniature golf course was part two of the business plan for Royal Green Golf Center in Mifflintown, Pa., but when husband-and-wife owners Chris and Keria Meals started pricing the project two years after opening the range, they realized a course was beyond their budget.

“We’re also in a pretty rural area” that couldn’t support a $200,000 layout, Keria says. Juniata County has a population of just 23,000, well below the recommended 65,000 to 100,000-plus population base miniature golf builders suggest (dependent on the number of amenities and existing competition).

Not wanting to give up on the idea, the Mealses investigated other opportunities and eventually purchased a customized prefabricated course for a fraction of what a concrete course would cost.

A prefabricated course would never be a consideration for Myrtle Beach, S.C.—the miniature golf capital of the world—says Joseph Rogari, vice president of marketing for Mini-Golf Inc. in Jessup, Pa. But for facility owners challenged by a smaller market, it’s a low-cost alternative.

“There are a lot of different products and services in the marketplace that can accommodate various demographic scenarios,” adds Christopher Foster, director of sales and marketing for Cost of Wisconsin Inc., based in Jackson, Wis. “Smaller demographics can use less expensive prefab courses, while a stronger area can build larger adventure-style courses that cater to that market.

“In a town of 50,000 people, you can’t put up a $300,000 adventure-style course. It doesn’t make sense,” he says. “But you could put up an 18-hole prefab course in addition to the range; that can make sense.”

Scaling back the size, or even type, of miniature golf course is an exercise in economics. A standard course sits on 20,000 to 27,000 square feet and has three water systems. Tailoring the course to a smaller market by using less land and fewer water features will decrease not only construction costs but also electrical, landscaping and maintenance expenses.

“If you’re going to force the deal, watch your budget,” says Christopher Cawley, president/CEO of Atlantic Miniature Golf & Entertainment Construction, based in Norfolk, Va. For new developers, this could mean compromising on location to keep land costs down. “It’s nice and great to have the best location, as with any retail type of business,” says Cawley. “But all across the U.S., land has become very, very expensive and sometimes it doesn’t pay” to invest in a choice spot. But Cawley points out that in an off location “you’re forced to do a better marketing job for people to find you. If you’re not that good of a marketer, reassess your business plan; it might be more advantageous to buy [prime] land.”

Location isn’t the problem for Ironwood Golf Center in Aliquippa, Pa., 30 miles west of Pittsburgh. It’s visibility. Passers-by on North Brodhead Road can see the range just fine, but they can’t glimpse the course’s three waterfalls. Owner Larry Milosh thought the course would boost range revenues, but says, “The range business, even with miniature golf, has stayed the same.” Though Milosh largely attributes low sales to the economy, he admits that the location of the course, which was built in 2001, six years after the range opened, isn’t ideal. “In hindsight, if we would have done it all at the same time, we would have put the miniature golf in a different spot.”

Looking to compensate for low visibility, Ironwood’s marketing program focuses heavily on attracting people to the course. “We’re still trying to get them there the first time,” Milosh says. Initially, he targeted the Boy Scouts and youth organizations. This year, Milosh is stepping up those efforts by also marketing to Little League teams and schools and holding events anchored by the course, such as a fund-raising tournament and customer appreciation day.

“You can be three blocks off the main road, and if you get [people] there once, they’ll come back,” says Ralph Lomma, president and CEO of Lomma Miniature Golf Co. in Scranton, Pa. There are plenty of courses on the outskirts of town that are as successful as those located near a shopping district. “The difference is that the shopping center course doesn’t have to spend as much time and money making itself visible to the public.”

Castle Golf’s Bremer agrees that operators can still find success despite having a low-profile location. “From what I’ve observed, they expand their facilities enough so that they become a very identifiable location, a destination location,” he says. “There’s enough going on, resulting in enough revenue so that they can market effectively; therefore, when people do come, they spend enough time [and money] there. One way or another, you have to make yourself visible.”

The challenge for range owners is learning to target two different markets.

“It takes a mentality shift,” says Steve Cook, president and CEO of Adventure Golf Services Inc. in Traverse City, Mich. Range owners have to put on their FEC hat and think about what will draw families, not just golfers, to the facility.

After a disappointing start, Royal Green’s miniature golf business finally picked up last year, and the numbers this season are already ahead of budget. The Mealses are capitalizing on the momentum with a new branding campaign that promotes the miniature golf course in tandem with the facility’s Italian ice and ice cream fountain versus an ad campaign that normally would also include the range and pro shop. “Previously we tried to cram everything together, and I think [miniature golf] got lost,” Keria says.

Says Cook, “Just because you plug in certain components (like a miniature golf course) doesn’t mean you’ll be successful. What it always boils down to is the owner knowing best his individual market and knowing what his market would benefit from.”

Tapping Into Creative Energies
Growing fringe metropolitan markets, like Riverview, Fla., a bedroom community of Tampa, are ripe for miniature golf course construction. “People who live there don’t want to drive to the city,” says Hix of the Miniature Golf Association. “They want to stay out there and play.” In these areas, he adds, the market dynamic is in place to increase property values and fuel business growth as the community grows and expands. In the past eight years, more miniature golf courses have been built in smaller regional markets and with better profit margins than those built on a highway in big cities like Dallas, says Hix.

Tony Hunnicutt, senior account executive at Harris Miniature Golf Courses Inc. in Wildwood, N.J., agrees. “Most tourist markets are saturated and availability of land is limited and the investment level is five times the norm of what it would be throughout the rest of the country.” The majority of courses, he says, are being built in backyard America—suburbs or smaller local areas that have experienced a decent amount of growth over the past few years, but lack recreational opportunities.

An ideal market, Hunnicutt says, is one where Wal-Mart has converted from a standard box store to a supercenter, or where Lowe’s or Home Depot have come in. “Wal-Mart and Lowe’s have done the demographic research and know the growth is coming. If you can see that growth, it pretty much justifies this is going to be a good possible site,” he says.

Both Lowe’s and Home Depot built stores in Egg Harbor Township, N.J.—one of the fastest growing areas in the Garden State—in the late 1990s, at the cusp of the community’s population boom. An article published in the Courier Post newspaper reported that the township’s population has increased 30 percent since 1990 and shows no signs of slowing down. Designated a “high-growth region” by the New Jersey Pinelands Commission, a state development agency, Egg Harbor is scheduled to build 22,000 new residences and already is issuing more building permits than most of the state’s municipalities, a sure sign that more families will likely move into the area. Mike Hewes, vice president of sales and marketing for Olde Masters Golf Center, is counting on it.

“There is a core of golfers who support the facility, and it’s growing every day,” he says. “However, that core is not enough to make us successful. We need to be able to attract new people into the sport in droves—not one serious golfer after another.” The answer, Hewes says, is the recreational consumer, the family that comes to play miniature golf and have an ice cream cone and sees the range and says, “I could hit a ball.”

The facility’s suburban location alone, though, may not be enough to attract the customers Hewes is hoping for.

“When we opened up, we tried a lot of things to market the facility…and we spent a lot of money in the past year on television advertising and with no measurable improvement,” he says. Then, last fall, Hewes discovered glow-in-the-dark miniature golf tournaments and developed a new commercial to promote them. The first ad ran near Halloween and generated 25 phone calls—more than the facility had received in the preceding 10 months as a result of its TV spots. “We ran TV commercials all year long and I can honestly say, I only had one person come in and say, ‘I saw your TV ad,’” Hewes says. The following week, the phone was ringing off the hook and 100 people showed up to participate in the nighttime tournament.
Marketing—the power to generate more than drive-by revenues for visible courses and resuscitate the ones off the beaten path—is the shared quality of successful miniature golf course operations.

Miniature golf isn’t rocket science, says Hunnicutt. “If you’re an efficient, savvy operator, knock on lots of doors and market effectively and come up with creative ideas, there are lots of opportunities.”