Revenue Management in the Golf Industry


Golf Industry Overview 

Golf is a great sport! Why? Because it is one of the few sports that you don’t have to be in shape to play it and play it well! Just google John Daly and you’ll know what I mean. Golf is a very popular sport because it’s social and it requires as much mental ability and concentration and it does physical.

There are more than 35,112 ( golf courses worldwide and many of them are located in resorts and tourist hot spots. Half of all golf courses are located in the United States and it probably has to do with the abundance of real estate in the country. But of course, like everything else in the world, the next big thing is golfing in China, which has exploded in popularity since its introduction to the country in 1984.

The National Golf Foundation ( and Golf Digest ( offer plenty of information about the golf industry and its latest news.

Golf is popular amongst both men and women and there are plenty of professional tours around the world. The PGA and LPGA tours and the most popular for male and female professional golfers and they have some of the biggest prize purses in the industry. I think golf is the greatest sport in the world and I am biased because I’ve been playing it since I was four years old. But this is how I convinced a friend: I told him that if I was a famous professional athlete of any sort I would pick golf. Why? Because it’s the only sport where your professional career could last as long as a regular job. I can be a professional golfer until I’m retired! And after that I can even join the Senior PGA tour where I can still make a great living. Just ask Lee Trevino of Chi Chi Rodriguez.

The problem with golf and revenue management is that it usually charges a fixed price and it’s hard to control duration, which places it in Quadrant 3 of the RM levers. Since it is a social sport and depending on the size of the group, type of course and weather, it is very hard to estimate how long it’ll take a group to finish a round of golf.

Space in golf is pretty fixed and it is defined

This is how a round of golf is usually priced:

–       The golfer pays a “green fee” that allows him/her to play a round of 18holes

–       The time it takes to finish the 18 holes varies greatly depending mostly on the size of the group

–       It is categorized as a “gentlemans” sport and it’s considered rude to hurry other players



The golf industry defines space implicitly in that they are in charge of the space and they do not require to sell a specific part of that space but the whole course or golf range.

Golf courses divide their space up in different types, duration and distance for their holes. They also add other types of spaces like golfing ranges where they can get additional revenue from customers that don’t necessarily want to play a full round of golf.


They can also use the space to generate additional revenue, for example:

–       They have the golf range that serves the golf course

–       A golf pro shop to generate retail sales

–       Professional services like gripping clubs

–       Professional lessons (might not take space but generate additional revenue)

–       Bars (19th hole)

–       Other F&B outlets like restaurants



Some creative solutions to generate additional revenue using the space could be:



–      Offer spa and sauna services in their locker facilities if they have them

–       The space could also be rented out for events, such as weddings and outdoor concerts

–       They could do outdoor cinemas at night

–       They could have summer camps at night for kids






The golf industry uses time implicitly because it is very hard to know how long it will take a group to finish a round of golf and it is very hard to control it without annoying customers. There are things that can be done, for example:

–       Discount if the group is done before X amount of time

–       Charge for time and not for rounds (problems with slow foursomes)

  • Slower ones must be willing to let faster ones go through

–       Charge different prices based on weather forecasts (a discount for a potentially rainy day, give they sign  a disclaimer)

–       Older people have to be 3 or less per group

–       Field marshals to help ease the time pressures

–       Use ball finders in certain holes to make finding the ball easier (reducing time). This could be very helpful in markets where labor is inexpensive

–       Caddies for bigger foursomes (time controllers and sell them as free caddies or charge)

–       Charge higher for “professional caddies” who will make play faster



There are several rate fences that can be used in golf in order to charge different prices at different times or level of service. Some of them were mentioned in the previous point because they go hand in hand with time, but some additional examples are:

–       Charge different prices

  • Morning vs afternoon
  • Weekday vs weekend

–       Golf cart to have fences for bundling and other services

–       Charge for time and not for rounds (problems with slow foursomes)

  • Slower ones must be willing to let faster ones go through

–       Advanced payment to reduce no-shows and determine overbooking levels too

–       Cancellation Fees for no-shows

–       Booking curves in order to determine which days are the ones with the most demand

–       BUNDLING

–       Daily traffic curves to determine what time of days are the best tees (every half hour?)

–       Pay extra to pass a slow “foursome”

–       Charge different prices based on weather forecasts (a discount for a potentially rainy day, give they sign a disclaimer)


When it comes to Golf Ranges, which could be an add-on to a golf course or free standing, has a lot of RM opportunities too:

–       Different prices for the bucket at different times based on Curves by time and day of week (with length of stay too)

–       Offer unlimited balls for a pre-determined LOS instead of charging by the bucket… This way we know exactly how long they will last.

–       Offer different quality of balls and charge more or less for them (makes hard to sort them but could be worth the effort)

–       Charge more at night or day depending on demand

–       Offer virtual ranges

–       Time and price could also be enhanced by having some kind of set path:

  • 10 shots at three different distances with three different clubs

–       Be able to reconfigure the range and/or the booths where the players shoot the balls


There are many things that can be done with golf revenue management. But the most important thing to do before rolling out RM initiatives is to test it first. A new RM strategy might sound exciting but it could be a potential source of dissatisfaction with the customer and reduce revenue instead of improving it.

Revenue Management in Nail Salon Industry: selling your time and space


What is the Beauty & Nail Salons Industry?

A nail salon or nail bar is a beauty services establishment that primarily offers nail care services such as manicures, pedicures, and nail enhancements. Often, nail salons also offer skin care services. There are approximately 9,900 nail salons (2010) in the U.S., up 23% from 2007 according to the “AnythingResearch Nail Salon report.”. ( The industry is estimated with a market size (includes all money spent in the salon on the services in the chart at the top right) of 6.6 million dollars in the year of 2011. (

Nail salons offer a variation of options for nail care. This includes acrylics, silk or fiberglass wraps, French manicures, polish, pedicures, etc. Some nail salons are offering one-stop beauty services. In addition to nail services, these one-stop nail salons offer facial treatments, waxing, and skin care.
Nail salon industry could be considered as a very typical industry that could use a lot of revenue management, regarding to : 1) the high fix costs and low flexible costs of producing, 2) the perishability of the inventory, 3) the easiness to control duration,  and 4) the capability to manage demand by pre-selling and fencing rates.

However, based on my research, “time” has been an implicit pricing component for most of the nail salons inside of the U.S., and in most cased, price are still being decided based on techniques and materials applied for a certain service.

Industry Practice  – Pricing Strategies

In the current industry practical, most of the prices are neither defined by space nor time. Instead, the price are defined by the service and material consumed. A widely accepted pricing method in the industry is that the product costs cannot exceed 6% of the service charge. To figure the minimum charge per service, multiply the product cost for each service by 16.5. The figure is the lowest possible price for a service.

For nail salons pricing base on technician, an “85% rule” are commonly accepted. The salon figure station occupancy by dividing hours booked by hours scheduled. For example, if the nail technician is scheduled for 40 hours per week and is pre-booked for 30 of those hours, she has a 75% station occupancy rate. When that technician is fully booked more than 85% of the time, the salon will consider raising her price. (

  1. Rate fences

Rate fences that have been being utilized in the industry are limited. Some of the nail salons have already started to use last minute deal and early reservation to fence the rates. However, for most of the salons, no rate differences or slight differences will be charged by making early reservation and walk-ins.

The good part is that selling the inventory ahead of the time by making reservations and bookings has already become an industry norm. The research shows that about 40% of the nail salons do not take walk-in businesses. Some salons are also using daily deals to fence their rate to the last minute businesses to spread the demand evenly, such as Polished Nail Salon (


We can find some of the industry pioneers already moved their feet into the gate of revenue management and try to control its inventory by “selling” time or space, such as Isle Pedi. Even though no specific example was made, it has been said that some of the salons have already started to charge a flat “slot fee” plus an “add-on fee” for the services received. Several examples were selected to reflect the diversity of pricing policies and strategies.

No time component + Mostly Tech oriented

AVALON Hair & Nail Salon (

Crystal Nail Salon (

Partially time + Partially Tech oriented

Gaia (

— Some, especially high end, salons would charge by nail instead of by hand, based on the costs of each nail and provide more variety in design.

Mostly time oriented pricing

The Emerald Door (

Isle PediSpa (

Demographic component pricing

Berkshire (

  1. Potential solutions

People have been trying out new stuff and reaching out beyond the industry to get inspired. I spotted a lot of good practices in setting rate fences, such as by gender and age, which are all very well accepted by the customers. Also some of the salons are taking good advantages of group selling by providing “manicure/pedicure parties” and therefore add more value in the service by providing princess/night club costumes and other entertainment services.

A good example would be Manicure/Pedicure Group Party – R2C Kids Spa (


Industry Practice – Define Space and Time



  1. Selling space explicitly or implicitly?

Most of the nail salons are selling space implicitly. The price is decided mostly basd on the labor and material spent on a certain service. For example, one customer who received “polish changes” and “Gel” will not pay less than two customers who receive these two services separately, even though the latter requires two “slots” and the former requires one.

  1. Practices to define space and other possible solutions

Normally nail salon would separate the space into: reception desk, waiting area (both for drying the nails and for waiting for the next available tech); manicure area; pedicure area; and massage area/private room. Some, especially high end, nail salons also have retail area.

Among those areas, manicure area, pedicure area, private rooms, and retail area are considered revenue generating areas. To implement revenue management, the salon could define its inventory as “slot” and focus on improve “revenue per slot”, or as “square feet” and define the performance metric as “revenue per sq”.  The latter one makes more sense to me, seeing as it includes the gross booth area into consideration and reflects the overall profitability of the salon.

To divide the space into different layers could be a crucial approach to fence the price and maximize the profit. A higher scale salon requires bigger space for each “slot”, while a bigger “slot” should be charged with a higher premium to compensate the cost of space. As what we applied in restaurant revenue management, the space allocation should be balanced between the functionality and the profitability. Therefore, nail salons should not only divide the space by function, as what most of the nail salons are doing, but also should divide the space by service scales based on its customer mix and needs.
One interesting finding is that, catering to the special needs of the “girls’ collectivism”, a lot of nail salons designed conjunction seats. (  As you can find in the picture, this seat conjunction is called “purple princess suite”, specially designed for two girl friends / couple/ parent-kid who would like to share their pedicure time with each other. The conjunction seats not only save space and therefore increase unit space revenue, but also cater to the certain clienteles’ special needs. You will not get one of those hot babies without making a reservation.

  1. Additional revenue generate space

Retail area could constitute a major additional revenue generate space for nail salons. A goal of comprising 15% of the total revenue is realistic for the nail technician and profitable for the salon. (

For example, Isle Pedi Spa had 2,700 square feet space and allocated 400 square feet to its retail section, which features over 600 different shades of high-end polish to purchase. Also available are candles, bath bombs, nail care products, neck wraps, flip flops, sandals, and all of the salon’s house-blended products. (

Another large source of income could be from gift certificates.  Clients will love them because they’re already packaged nicely so they make great and easy gifts. Gift certificates are the best advertising because they get someone new through the door.


  1. Selling time explicitly or implicitly

Yes and no. Nail salon industry has been selling the inventory ahead by making reservations yet traditionally the industry does not sell its inventory explicitly by time.

  1. Practices to sell time and other possible solutions

As it has been listed above, different practices have been implemented to sell the time. Take Isle Pedi as an example, services around 45 minutes belong to one rate layer while services around 60 minutes belong to another time layer.

Actually, a lot can be done to make the business more profitable once the business owners start to focus on utilizing their limited operation time on hand more efficiently. Therefore, the profitability efficiency can be measured by “revenue per half hour” or “revenue per hour”, whatever the smallest time unit is. By clearly defining and controlling the service duration, the business owners can make accurate forecast and sell the inventory by chunk with prices adjusted by demand. The suggestion is to study the history record made by your salon. How many customers you get by the Day of the Week, and how many reservations you got for each day compare to the walk-in businesses. Then we can implement the hotel room revenue management application into the forecasting and pricing for nail salon industry, to decide how many walk-ins to take, with what rate and alike.
By realizing the significance of the time component in profitability, the business owners can also try to fill up the waiting gap in the process of service to improve the performance of revenue per time unit. A great example would be Le Posh ( As it is shown by the picture, Le Posh is providing manicure service while the clients are getting a perm.


However, whether this application is acceptable totally depends on the client tail. In the case of Chi&Ki Sister Nail Salon, they figured that with an affluent clientele, folks would want to slow down and be pampered. However, as it turns out, even these clients are generally on the run. So, Chi has an ad hoc set up for mani-pedis to be done together. But at Ki, comfortable manicure tables were built into the custom pedicure benches from the start. (

  1. Explicitly example

Isle PediSpa (
Worth to mention, Isle PediSpa did a great job with its pricing structure design.  Everything is derived from a basic “45 min/$38 rate” service. Packages providing different callus work are priced with 5/10/15 dollar premium to the basic rate; also a quick 30 min variety, a kids variety, and a male variety are provided with slight price differences from the basic service; another price layer is the “1 hour” packages that are priced with slight differences around 60 dollars.

Non-traditional Revenue Management Practice in Nail Salon Industry


  1. Selling the Time and Space in a better way
  • A better rate fences:  providing different booking windows, “good only when combination with”, or time limited deals. An even better idea would be a reservation center that collect all the demand and supply on a single platform, just like for hotel industry.
  • Time Range Bookings: Offer some guests the opportunity to receive a reduced rate if they can be flexible with the time they take their treatment.
  • Last Minute Deals: Drive impulse and walk-in business to these times and turn what would have been idle labor expenses into reduced rate treatments.
  • Controlled Discounting:  Instead of charging a premium during the busy times, establish higher prices overall and provide variable discounts.
  • Controlled Availability: Create booking rules to encourage high margin treatments during high demand periods.
  1. Combination Menu

The key to revenue management for nail salon is how to do balance between price, space, and time to be in line with perishable inventory and variable demand. Therefore, as we discussed previously in this article, there could be a lot of combinations of practices to price the time and the space.

A lot of experiments and researches are waited to be done to find out the best practice. Will it be better to sell time explicitly while selling space implicitly? Or will it be better to sell both of them explicitly? The answer may surprise us when it comes to the real world in different market segments and different geographic locations.

2. Concerns of acceptance level and perceived fairness

A “small” nail business could get pretty complex in the terms of pricing. Therefore to find out a way to deliver and explain the pricing structure to the customers is very important. I suggest the business owners to design a menu like the menu in a restaurant: for red curry base, you could have tofu, beef, seafood and chicken with slightly different prices; if you want brown rice instead of white rice, pay extra. In nail salons, we can have 45 minutes base and slightly different priced options; if you want celebrity brand instead of private brand, then pay a little bit of extra.

Also, charging the customers by the space they take still sounds a little bit avant garde. It may raise the complexity of the pricing structure and hard to acquire acceptance from customers. Customers in a restaurant will be outrageous if they were asked for a “slot fee”, a “food fee” and a “service fee”. What we can do is to provide customers bigger and more comfortable chairs/sofa only when they choose to purchase a longer service and/or more expensive services, until the perceived fairness of being charged by space raised to a safe threshold.

Tennis Center Revenue Management

The Westin Diplomat Resort & Spa’s Tennis Center

The Westin Diplomat’s Tennis Center offers 10 clay courts and a pro-shop. 6 of the 10 courts have lights for evening games and one court has stadium seating for up to 1,500 spectators. This tennis center is ranked 24th in the world among tennis resorts.

Westin Diplomat Tennis Center

Most of the information on the tennis center is in the following link. I also utilized another tennis center in Daytona to compare the two.

Most tennis centers offer services per person for court rentals, supply rentals, lessons, tournaments, and programs. Time is defined in many ways: daily, hourly, or by day part. Space is defined per court.


The Westin Diplomat tennis center sells their space implicitly in that the tennis center is split into courts, a pro shop, and locker rooms. The courts are divided up into different types of courts: normal courts, evening courts with lights and a court with stadium seating. Also, the pro shop works very well with the tennis courts because customers are able to rent racquets and shoes, tune up their own equipment, or even by other supplies such as water and snacks for the tennis courts. In addition to these two parts of the tennis center, there is an elegant locker room for customers to utilize before and after using the tennis courts.

Additional revenue is earned at the tennis center from private lessons, programs, group outings, tennis camps, clinics, and the pro shop. The tennis center does not only provide the space and equipment to play tennis, but also great services that allow customers to learn how to play tennis or have games supervised by pros who can give helpful tips to customers’ tennis swings. These pros may provide private lessons or clinics. In addition to the smaller-scale services, the tennis center holds tennis camps during the summer months that will use up most of the courts for most of the days. Group outings can be organized so that a business group or a social group can rent out a few courts to play among themselves or hold a tournament among them. Finally, the pro shop has rentals, newest tennis equipment, and a repair shop that will complement customers when they come to play at the courts.

Tennis camp for children and adults

A creative idea I had for the tennis centers was to add indoor courts and maybe have a massage center in the locker rooms. There would be more opportunity to gain revenue from the massage centers after players have a long day out in the sun. Similarly, the indoor courts could also be used to avoid the scorching sun in the middle of the summer.


Tennis centers typically sell time explicitly: either by the day, the hour, or by day part. However, the Westin Diplomat tennis center sells time in both explicit and implicit ways. It sells its unused courts explicitly at a certain rate per day per person; however, it sells its lessons, clinics, camps, and programs by event.

Tennis center sells lessons at the academy

As explained, the tennis center at the Westin Diplomat uses explicit and implicit time for different services. This tennis center can actually shorten the explicitly defined time. Instead of renting the tennis courts out by day, it can be rented by hour which will help the tennis center predict duration better and have more customers in a single day.


Some physical rate fences that are used by tennis centers are the use of ball machines or pro player tips. Also, rate fences may exist between indoor and outdoor tennis courts. Some nonphysical rate fences that are used by the Westin Diplomat tennis center is hotel guest versus non hotel guests. Some other tennis centers have rate fences between children and adults.

Some extra creative fences that can be used by tennis center are season passes or membership. These passes or memberships can allow customers have a discounted price for using the courts, but it may encourage the player to come play at the tennis center more often. Also, if the tennis centers have rate fences between times of day, they will be able to charge higher during peak periods and charge lower at nonpeak periods.

Revenue Management at Ski Resorts

Ski Resort Industry Overview

In the US, the Ski Resort Industry is consists of over 300 companies, generating roughy $4 Billion in annual revenue.  Aside from selling lift tickets and season passes, ski resorts generate revenue through their associated hotels, restaurants, bars, and other attractions.  This analysis will focus on strategies for managing revenue from ski mountain lift ticket and season pass sales.  Also, most ski mountains supply of space exceeds the demand that would be needed to reach “capacity” at a given time


The size of a ski area is typically expressed as number of skiable trails or in total acres.  The skiable area is an explicitly defined space which customers rent for use.  Purchasing a lift ticket or season pass entitles the purchaser to use the space for a specified time, but the space is shared among all patrons utilizing the space at a given time.  In order to maintain safety and in some cases to provide the luxury of limiting lift lines,  space capacity can be considered fixed.  On the other hand, many resorts have difficulty predicting demand due to its corellation with the weather, which can result in long lift lines, and crowded slopes.

The overall space can be categorized by skiing terrain, ski lifts, maintenance areas, F&B Outlets, retail and equipment shops, lodging, and ticket sales.   The Skiing Terrain space at most ski resorts is divided into trails which follow a rating system ranging from beginner to expert terrain, as shown below.

The terrain of a ski mountain is mostly determined by the natural slope, along with obstacles and snow conditions.

The following trail maps are examples of how ski resorts manage their space:

1.Greek Peak Ski Resort, Cortland, NY

2.Park City Mountain Resort, Park City, Utah


3. Heavenly Ski Resort, South Lake Tahoe, CA

4. Vail Mountain, Vail, CO

Additional Revenue

Aside from lift ticket sales, Ski resorts are able to generate substantial revenue through their on-mountain rental programs, F&B outlets, retail stores, and other attractions.

Some examples:

Waffle Haus at Sugarbush, Utah

Mid-Mountain Lodge at Alta, Utah

Ice Bar at Steamboat, ColoradoSki Lesson at Heavenly, Lake Tahoe

Some creative ideas on how ski resorts can increase revenue:

  • Offer hot beverages next to lift queue
  • Install camera coverage throughout mountain and sell videos
  • Create a first-class section of the mountain with well maintained conditions and limit the quantity of tickets sold (physical rate fence)


Ski resorts sell time explicitly, due to limited hours of lift operation, which is usually during the day, sometimes at night with lights.  Traditional Season Passes allow for unlimited use of the mountain terrain during operating hours. Many resorts are now offering passes that can be used on certain days, or for a specified number of days per season. Lift tickets are normally sold for an entire day(8 hour), multiple consecutive days, half day, or hourly. Holiday Valley is an example of a resort that offers flexible lift tickets, meaning that if you buy a half-day (4 hour) pass, the 4 hours begins when you board the first lift.  Greek Peak, on the other hand only offers half day passes that begin after 3 PM, which may limit their potential to attract customers during slow off peak week day mornings.  In order to increase demand, many resorts also offer reduced rate beginner only lift tickets that are good for a limited number of lifts servicing beginner terrain.  A creative approach to the current method of offering beginner only lift tickets would be to offer intermediate or expert only tickets.  The big issue with such a division of space would be monitoring and regulating the different types of passes.  It also may be less attractive for people within groups, but if the trails had physical barriers there may be an opportunity to increase revenue by offering access to expert terrain only at a reduced rate, which could attract back-country skiers who may be more price sensitive than a family on vacation.


Non-physical rate fences are used by most Ski resorts to determine lift ticket and season pass rates.  Some resorts have created Physical rate fences to maximize revenue, mostly through learn to ski/ride programs which include a lift ticket that is limited to beginner trails. Some non-physical rate fences used include:

1. Age

2. Student

3. Military

4. Local Resident

5. Rewards program member or season pass holder discounts

The Canyons resort in Park City, Utah offers all of the above listed rate fences and many more, which include teachers, honor role students, local students, police, and firefighters.

The following Lift ticket and season pass rates illustrate how resorts have set non-physical rate fences:

Heavenly Lift Ticket Rates


Greek Peak Lift Ticket Rates

Killington Season Pass Rates

Greek Peak Season Pass Prices

The lack of physical rate fences is due to the unconstrained space and a lack of barriers to separate areas that could be sold individually.  If resorts want to create more physical rate fences, they would need to devote a lot of resources to build barriers and monitor traffic between the different areas.  As you can see in the Greek Peak rates above, they offer a discounted daily rate for chair 3 only, due to the fact that it has parking lot access and a variety of trails.   At larger resorts, the use of physical rate fences or a pay-per-use system may be feasible, but I think customers would be weary to be charged every time they want to ski down a trail on a per run basis.  It’s also difficult to analyze the value and popularity for each run if such a system were to be implemented, due to limited technology.  However, many resorts scan passes and tickets at the lift line, which could be further analyzed to determine not only demand by time of day or week, but by location.