Discounts a Counter View

A Guest Post by John Delnegro

(Editor's Note: Rather than provide John's comments in three sections I decided to post his entire comment as a "Guest Post" so readers  can get the full "flavor" of his his thoughts on my last post. The opinions expressed below are the author's......)

Hello Jim,

As always I enjoy reading your Observations regardless of what altitude you are at. And as always I feel you do a very good job of expressing both sides of an argument. Not having the time to dig to the depths you do I would still like to offer a few sprite and opposing  thoughts on your last blog, and heaven knows that my verbiage will pal in comparison to yours. Now I think I was the cheap senior citizen that prompted you to write “Let’s Make A Deal.”

1. The first example you use is the fees charged at a National Park. The young pay $60 per entry and seniors pay $10 for a lifetime pass. Strange thing, I was at REI last week checking out and I made a statement about being retired to the lady clerk. She responded by telling me she couldn’t wait for next year as she would turn 60 and be able to get a National Park pass for $10 having spent several years paying far more when she, husband and children would visit the Park system. Let’s say the family visited the park annually for 40 years ($2400). I think it is wonderful that having paid in $2400 she now will pay $10 rather than having paid the lesser amount for 40 years$10  ($400). Yes it would have been a great deal for them during the time you state they had less money but I ask you…do you really think this 59 year old lady working at REI will have the discretionary income at age 60 that the family had when two were working. While I know you are fastidious about your stats I really wonder how those  income figures were derived. I don’t think the average park visitor fits your stats even though they are correct. The stats don’t look like the average couple from Iowa’s income, yes, maybe Stowe, VT.  Let’s also talk about what it costs to operate our national parks. No, I don’t feel sorry for the government but it is heavily subsidized and the $2400 vs $400 sure makes a difference. Let’s talk about the ratio of seniors to young who can take advantage of this offer perhaps 1:10 so I don’t feel so bad about rewarding them. Let me give you one more example from my personal experience. Walk into the any Moose Club in America. Here you will find the majority of members have income of far less than your stats indicate in fact they wait for their social security checks which affords them the luxury of having dinner two beers and getting change back from a $10 yes really change back. But the young who have far more earing power can also join.
2. Ok, let’s move on to my second point the crux of the matter, Stowe Country Club and their pricing scheme. I will give you credit for questioning the outcome of this pricing matrix. I ran some quick numbers (nothing like you would do) and based on my figures from what I have been told (unofficial) the revenue picture is probably close to what it was before the low ball scheme.  What I think has taken place is nothing more than a demographic shift by moving several members who belonged to less expensive clubs to the more prestigious and better kept SCC. Next year the competition may offer a counter that will challenge Stowe. However SCC has offended many of those who belonged for years and saw no special offers (back to the national park example). Having a different socioeconomic member at the Club I wonder how it impacts the food and beverage business as part of total revenue. One other important fact to remember in this community of high discretionary income, most of these young folks play off of mom and dad’s membership. With the above demographic  shift and the family membership, did that grow the sport by increasing the number of youth participants? Swinging all the way back to your income chart I don’t think there are to many age 35 or younger living in Stowe with median U.S. wealth of $11,100 and if they are then it is in their parents basement and that’s their annual stipend from mom and dad. You mention this being a profit center for AIG. You are right, and AIG got all the profit they wanted when (Marriott or Hyatt) won the bid to operate the Club.  They could care less about growing the support.
3. Golf is not a growth sport. Lowering the fees will not increase youth participants.  Furthermore 40 year old’s are not “youth”. I wonder about the marital status of the youth movement. My own thought is they are likely single and once they have family’s they will not have 4-6 hours to play golf regardless of price. Additionally millennials are focused on e-sports which give instant gratification. You ask the question, “when this  crop of new golfers ages will they begin to look for senior discounts or remember SCC as having offered youth discounts?” My answer is maybe they will remember having paid $1000 during their youth and now as seniors expect the discount off of this price.  “Let’s Make A Deal.”

With that I bid adieu

John Delnegro