When David McKillips, a former leader at Chuck E. Cheese and Six Flags, took over as the new CEO of the spinout Topgolf franchise in February, he spent the first 100 days visiting 100 of company’s locations.
Now, McKillips is acting on what he learned on his grand tour and the <a href="https://axiomcore.info/amc-entertainment-launches-theatrical-distribution-company-targeting-smaller-medium-sized-releases/” title=”AMC Entertainment Launches Theatrical Distribution Company, Targeting Smaller, Medium-Sized Releases”>entertainment world’s best practices from his prior executive roles. Among his multi-faceted plans are efforts to win back avid golfers, add memberships, support youth interest and launch a media division:
- Partnerships with Youth on Course and First Tee began over the past month.
- Topgolf Media Networks launched two weeks ago.
- A new collaboration with the World Series of Golf started this week to introduce its first qualifying tournament held concurrently at 30 venues across 11 states.
- The membership program is expected to debut this fall.
In all, Topgolf has 102 locations across eight countries with three distinct brands — the flagship Topgolf venues that pioneered sportainment, the TopTracer ball-tracking tech (used at last week’s Open Championship) and the Swing Suite simulators — and 42 million annual visitors. It’s not a direct comparison, but to emphasize the magnitude of that number, McKillips noted that it’s an attendance rate second only to MLB. The need is to cater to all ends of the guest spectrum.
“If you think about any country club, there’s other things to do,” McKillips said. “And Topgolf is essentially your local golf club. Right now, the focus is on golf, which is the, no pun intended, the driving force why people visit. But we have a lot of space for other opportunities. So I’m adding arcades, I’m adding darts, we’re going to test pickleball in some locations, sports tri
Almost all sports and entertainment destinations average between 1.5 and 1.7 visits per guest per year. McKillips said about 65% of the Topgolf audience skews toward entertainment over serious golf, but the latter cohort is still a significant size and more likely to make repeat appearances.
“That’s where membership drives the business,” he said, noting the importance of improving the product along the way. Topgolf had the same four virtual courses for the past five years, so adding more can help entice more repeat visits. “Topgolf leans so hard socially that I think we didn’t give a lot of new news for the core golfers.”
Growing the entertainment business
Private equity firm Leonard Green & Partners acquired a 60% controlling stake in Topgolf from Callaway, which retained 40%. As a newly divested and privatized business, Topgolf received more leeway to cater to its own set of customers.
“It gives us the flexibility to run the business as an entertainment destination, and I think Wall Street has rewarded Callaway for being a pure play,” McKillips said. “Their expertise is in the golf manufacturing world, and our expertise is entertainment and golf.”
To improve the guest experience, Topgolf is allowing guests to personalize their bay through an app, changing the channels on the TVs to watch games to placing mobile orders through Toast. There are 28,000 screens in Topgolf venues with guests staying for nearly two hours per visit, so the newly launched media network will help monetize that volume of screens and length of dwell times.
Topgolf is also looking to expand its international licensing to continue its global growth through a capital-light franchising model. McKillips said it’ll soon have locations in Abu Dhabi, Riyadh and Madrid, as well as more in China.
One of its bigger headwinds domestically, though, is the company’s own industry-defining history. There are 55% more entertainment venues competing for consumer spending than there were in 2000, including a series of those adapting the existing model to become the “Topgolf of baseball” or the “Topgolf of basketball.”
Still, with venue types of all sizes — from Swing Suites to sprawling three-deck Topgolfs — McKillips still sees room to double its inventory.
“In terms of the domestic white space, we think we can build up to 200 different Topgolfs, so we’ll be rightsizing the venue for different markets,” he said. “Each Topgolf looks very similar, but each one has its own personality as well.”
