Park World—forty-seven

 

Determining the market is right for a miniature golf venture

 

 

 

The study does not advise the reader about market situation, or how many courses it can legitimately support.  There are a number of industry experts who believe densely-populated areas can support one golf course for every four to five mile market radius in heavy residential areas Others have suggested a market can support one course for every l00,000 to 200,000 persons.

 

There is always room for caution when reviewing any numbers, surveys, feasibility studies or expert opinions Remember the old saying about figures never lie. There are always exceptions to every number and potential errors in any feasibility study methodology. For example, a five or 10 mile market definition is somewhat meaningless if the market is linear, or the market is totally isolated from other nearby trade zones.

 

It may also be meaningless if the golf course is part of a larger facility such as an amusement park, shopping mall or family entertainment centre which has a much larger market.  The miniature golf course revenues will benefit from the larger market.

 

Ask other operators and builders

NOT every operator will share his knowledge but many will. If the prospective owner takes time to call others and visit them, there is a wealth of information to be gained. As a designer, developer and operator I receive a lot of calls for this type of information, as do others in the business. Most are willing to help to a point because they want the business.

 

I tend to shy away from giving too much information because I don't want to be held accountable for the sales results of someone else's course. Market studies are not my business I believe most others in my business share this thought. Beware of miniature golf development firms who profess to know too much. This is not our job and even with good polling techniques, information can change from site to site and day to day.
 

For our own courses, yes we know what to research and we have our own gut reactions but it is based on experience in a variety of markets. For example, in our own polls we have found miniature golf to be popular up and down the age brackets with heavy weight given to the 10 to 30 year segment. I would estimate that more than 60 per cent of our business comes from that age group. Even senior citizens over 60 average five to nine per cent of business in some markets.

 

I have gone to sites and have been paid my day rate to express my educated gut reactions. I have pointed out markets that I would not consider as well as acknowledging those which I believe have a great deal of merit. I have advised some potential clients what to look for in specific markets and just received this response today:

"I appreciated your recent letter. I have pursued the information you asked me to get. Having pursued that I find the location I had in mind is a very poor location. In fact it is poor, poor, poor! Therefore I will do nothing for now, but I am confident that I can pursue another location or two."

 

I may not get this business but I am sure this owner made the right choice. If he had said I have the information and I am not sure. I would suggest he buy the full analysis from a professional market research firm or I might try to take a closer look with him.

 

Don't leave out intuition

WE all have gut reactions and many times these prove to be right. Here are some of mine but don't always count on them.  They are generalizations and represent optimum conditions for maximizing volume on a free-standing adventure style course. Please remember, I said adventure style courses, which is my specialty. Other courses can get along with less because they have less investment This also presumes I would have a choice of any market in the world. If a potential owner is locked into a market where he lives then sometimes he makes his own value judgments. First, the residential market. Here are my intuitive thoughts about what I would like:

     (a) Good population density close to the site with 400,000 persons in a  15 mile radius. Yes. I would consider taking less. There are adventure style courses in much smaller markets that are doing just fine.

     (b) Close proximity to restaurants, shopping centers, other attractions, bowling alleys, theatres, competition and other people gathering places. If the proposed miniature golf facility is combined with other entertainment elements, the proximity is less important but still a factor.

       (c) As a general rule 1 would avoid downtown metro areas that do not offer major reasons for pedestrian traffic after dark.

     (d) Traffic count of 25,000 to 40,000 per day on the major thoroughfare. Freeway exposure is good but I like the surface road exposure.

       (e) Sites with highway frontage and not buried behind other activities.

     (f)  Sites which have a minimum of 250ft. of highways frontage

       (g) Sites which are tied to other major entertainment locations.

     (h) Demographics favorably compared to known published statistics and reported trends.

       (i) Land costs between 52 and $X per square foot.

     (j) As the price of land goes up I would try to compact the size of my project. Paying for more land than needed is never a good idea, unless immediate plans call for expansion and money is available. Don't count on cash flow to solve all problems.

     (k) Flood zones or other low price property if located properly might be considered.

     (l) Unusual topography which will drive land costs down and be a benefit to the project.

     (m) Land leases if land is too expensive.

     (n) Land where a previous permit for the use was in place such as an old driving range

     (o) Areas that show high per capita use taxes from consumer spending in restaurants, shopping and entertainment.

     (p) Positive information about consumer counts at potential competitors during all sales periods. If they are direct competitors I would like to confirm that market saturation does not exist nor would it be reached if my venture were installed. If it will be reached, then I need more information.

 

The tourist market is different. Here is what I look for in that type of market:

     (a)  Similar traits as residential market plus the following ones.

     (b)  Close proximity to 1,000 transient rental units in any variety-including motels, hotels, campgrounds, cottages and others. We have built them successfully in areas with 600 rooms but we had other good reasons.

     (c)  Transient rental units which have good average occupancy, high seasonal occupancy and a high average number of persons per room and staying more than one night.

    (d)  Location on the main tourist strip in the area.

     (e)  Proximity to hotels, motels, restaurants, parks and beaches.

     (f) Walking distance to as many-transient rental units as possible

     (g) As large a residential area as possible Residents are a major provider of rooms to visiting friends and relatives who are tourists Don't get stuck on this point I know of tourist markets with 10,000  residents and more than six miniature golf courses.

    (h) Reasonable proximity to other major destination theme parks but still near the transient rental accommodations At night, people play near where they stay.

 

These are not meant as absolute facts, but merely starting points for making a reasonably intelligent investigation. My advice is, don't be afraid to use gut reactions but these must be tempered by engaging the brain and using good common sense.

 

• Arne Landmark is the owner of Adventure Golf Services, P.O. Box 405H. Traverse City. MI 49685-4058. USA. He has a vast amount of experience in the amusement park and recreational facility industries, while his specialty is the planning, design, development and operation of miniature golf facilities. He is currently Chairman of the International Association of Amusement Parks and Attractions' Miniature Golf Committee.