Basically, it’s not all that different from a lot of major sporting events. Main sources of income include: * TV and media rights. One or more major networks and numerous smaller media channels pay to carry all or some of the content. The biggest within this would be the TV rights, that would be purchas... Is owning a golf course profitable?
A golf course business’ primary product or service is course fees, which golfers pay to play the course. These fees account for a significant portion of a business’ revenue, but they are far from the only source of revenue. Some other things golf courses sell are:
They are the most essential element of any course, but because of labor and equipment they are also the most expensive things to maintain — even if some of our demands are a costly waste. Firm and fast is the golf standard for greens. That’s achieved by mowing, rolling and hand-watering the greens to prevent them from burning out.
At least not right now. Those in the industry will tell you that a golf course that was purchased for $5 million in 2006 would be worth about $2.5 million today. From 2010 to 2014, there were a lot of distressed golf course assets put on the market by lenders, financial institutions, and bankruptcy companies.
According to the National Golf Foundation's 2010 Operating & Financial Performance Profiles of 18-hole golf facilities in the U.S., private 18-hole golf clubs had average total revenue of $3,277,000 in 2009, but with total expenses of $3,204,500.
Profitable golf courses are generally selling for six to eight times EBITDA, while courses that aren't profitable tend to sell at 0.8 to 1.4 times revenue.
Money for hosting an event ranges widely. If you're talking about a U.S. Open, the amount the USGA pays in facility fees is substantial — north of $2 million when it “rents” a club. But clubs also share in the event's revenue and receive additional funds to prepare and restore its course.
After all expenses, the best golf retailers rarely profit more than 2-3% of the total cost of a club. However, as a whole, we can say that around 33.33% of the cost of a golf club is the markup from the retailer.
How To Make Money Playing Golf (Top 5 Ways)Get a Job as a Golf Pro. ... Play in Golf Tournaments. ... Place Friendly Bets with Your Friends. ... Become a Mystery Shopper. ... Get Sponsorships/Become an Influencer.
Ways To Raise Money For Your Golf Course. The most common income streams are green fees, membership fees, pro shop sales, and food and beverage sales. While increasing membership fees or green fees might seem like a good way to increase revenue, it might put off more golfers than the additional income earned.
Each year, the Masters' total prize money is divided between the fewer than 100 golfers. Of the 91 players competing this year, only the top 50 will make the final cut. All of these players will receive a portion of the total purse.
Non-Member Rates at Augusta MunicipalWeekday Rates (Monday-Thursday)18 Holes Walking$219 Holes Walking$14Hero Card$27League Play$2715 more rows
How does the business arrangement typically work? Professionals' caddies, just like the golfers for whom they work, are self-employed, independent contractors responsible for paying their own expenses.
Green fee play, memberships, food & beverage, and pro shop sales are the four main levers that can lead to an increase in revenue at a golf course. Of course, within each revenue stream, many specific opportunities exist for golf courses to produce more revenue.
A new iron shaft and grip can range between $10 and $95 while a new driver shaft and grip can range between $18 and $440. The majority of the cost comes down to what type of shaft you want and what grips you like. The cheapest shafts you can get are somewhere around 10 bucks each.
New Equipment CategoryLow RangeHigh RangeDriver (w/ stock shaft)$400 +/-$650 +/-Fairway (w/ stock shaft)$250 +/-$350 +/-Hybrid (w/ stock shaft)$250 +/-$350 +/-**Irons (w/ stock steel shaft)$900 +/-$2,000 +/-2 more rows
If you have honest hard working people in charge and the right golf course for the population base you could do very well and have fun doing it.
Many golf clubs offer special packages for midweek, weekend, or senior golfers to boost their membership numbers. The purpose of these packages is to draw golfers to your course during slow times.
According to a 2013 National Golf Foundation Survey, the demographics of golf break down as follows: 11% of golfers are members of the Silent Generation (born before 1946), 27% of golfers are Boomers (born 1946-1964), 27% of golfers are members of Generation X (born 1965-1979), 29% of golfers are members of Generation Y (1980-1999) and 6% of golfers are members of Generation Z (born after 1999).
As Mark Twain said when reading his obituary, “rumors of my death have been greatly exaggerated.” So too with the death of golf. Golf is one of the few sports that people can pick up in childhood and play well past the time their bodies have failed them in the sports of their youth. I can’t tell you how many golfers with repaired rotator cuffs, replaced knees and artificial hips I play golf with.
Looking at a well-manicured golf course creates a peaceful feeling until you play some challenging golf. Being an owner of a golf course can fill you with loads of pride but can lead to financial difficulties.
Many a golf course has been abandoned during economic downturns due to the high cost of keeping it alive and prospering.
The most common income streams are green fees, membership fees, pro shop sales, and food and beverage sales.
The $3.8 million Doyle paid for the course, in Florida’s third-biggest market, is slightly more than the average purchase price ($3.1 million) for the 114 golf course sales tracked by Leisure Investment Properties Group last year. And the majority of transactions in the current environment involve first-time buyers, like Doyle.
Once a potential property is identified, this starts the buyer down the road of due diligence, for both the facility itself and the market.
Hidden Lakes is an 18-hole, par-69 course that winds through pine and oak trees along the Turnbull estuary and around lakes and meandering creeks. The club also features a grass driving range and a short game practice area with chipping and putting greens. The 10,700-square-foot clubhouse has a snack bar, 150-seat banquet room, and fully stocked pro shop.
E very day for almost 20 years, Dan Doyle Jr. passed the same public golf course near Tampa, Fla., while driving his kids to school or heading to the office. The town-owned Belleview Biltmore Golf Club in Bellaire was the venue at which Doyle learned to play the game as a youngster and he’d frequently feel pangs of disappointment ...
PGA National Resort & Spa and its five golf courses previously changed hands in 2006 for $170 million and the property is now up for sale again. Beyond the golf courses, one of which hosts the PGA Tour’s Honda Classic, the luxury resort features 339 hotel rooms, a 40,000-square-foot spa, 42,000 square feet of meeting space, restaurants, and has invested $89 million in renovations since the 2006 sale.
D o profitable opportunities exist? Yes , but th e reality is that the golf course market is oversupplied, the byproduct of more than 4,000 courses being built from 1986–2005. It’s why course closures have outweighed new course construction for the past decade. While some closures are attributable to mismanagement, too few golfers, or too much competition, this trend has been largely driven by residential and commercial real estate, and the demand for land.
The cost to achieve the condition players expect — or will tolerate — ranges from about $500,000 a year for a daily-fee course to $1,000,000 a year for a private club, estimates Bob Randquist, chief operating officer of the Golf Course Superintendent’s Association of America. But of course, it’s also about location, location, location. Hawaii is, on average, the most expensive state in which to maintain a course, at $1.44 million a year. That’s followed by tracks in the southwestern U.S., where the average yearly maintenance cost is $1.05 million. Because they have such a short season, courses in the north central states come in, on average, at a bargain $556,000.
How do private clubs, which carry a bigger tab, spend their money differently? More people and equipment. They might, for example, hire a horticulturist to handle the landscaping or a fleet of grounds-crew workers whose lone job is to fill fairway divots. Grooming the course of your dreams? That’s a dream-team scenario.
Lest this seem pedestrian, Moeller says that even the USGA slows its roll at championship venues. “Because of pace-of-play issues we have at our championships, we’ll sometimes slow the greens down,” he says. “We have so many golfers to get through, and we want to use challenging hole locations.”
As golfers, we complain about the course. Miss a putt and we instinctively touch the green, tamping down a raised ball mark that only our eye can see. Hit it wide off the fairway and we’re likely to comment on the consistency of the rough. Patchy. Burned out. Trampled down. Even if we get to play a U.S. Open–level course like Winged Foot, where the rough is thick and pristine, we’re likely to complain that it’s too thick! And then there are bunkers, where golfers are apt to note that the sand is different from hole to hole. Send it flying over the green? Not a bad swing — no sand in the bunker!
Every foot of green speed on a stimpmeter slows play by seven minutes per group .
The greens. They are the most essential element of any course, but because of labor and equipment they are also the most expensive things to maintain — even if some of our demands are a costly waste. Firm and fast is the golf standard for greens.
That’s a question owners ask all the time,” says a weary Bryan Bielecki, vice president of agronomy at Billy Casper Golf, which manages nearly 150 golf courses in the U.S. “You can’t spend less and expect the same exact product. You have to sacrifice something.”.
In the last years, many golf courses are selling based on multiples of revenue (<1) because there aren’t any profits to calculate any type of return on investment. A 10% return might seem reasonable for buying a golf course, but the reality is that the return of many of these courses at the time of sale might be -10%.
If any of these courses went up for sale, major golf management companies (Troon, Trump, ClubCorp) and investments funds would be lined up to get a piece of these very profitable enterprises. However, most golf courses that go up for sale aren’t in great locations and may not even be profitable at all.
Or a normal course could be converted into a par 3 executive course.
Other income sources might include selling mineral rights, selling billboard or cell phone tower easements, or leasing the land for hunting or fishing purposes.
Golf course properties sell at less of a premium when fewer and fewer buyers play golf on a regular basis. Many golf courses have been shuttered with some being converted to other uses and some just being fenced off or just sitting as vacant land.
Many Golf Courses are Struggling. The golf industry has been in decline for over 10 years (pre-Covid). The number of rounds being played is going down, the number of courses open in the U.S. has decreased, and the average age of golfers has gone up.
In some areas, you have to offer to sell it to the neighborhood association first, before you sell it to developers. Adding greenbelt, open space or a walking path for those homeowners, in place of the golf course, is one thing that can be done to help mitigate their anger.
Golf course businesses can add additional revenue streams and increase profits by hiring golf pros who offer lessons, putting in a pro shop that sells equipment, installing a driving range adjacent to the course, or having a restaurant on site.
Golf Course Industry reports that the average course’s maintenance staff consists of 17 employees, which includes six year-round employees, ten seasonal employees, and one part-time employee and / or independent contractor for odd jobs. This doesn’t take into account additional employees that are needed to collect course fees, operate restaurants or provide lessons.
Golf courses can set themselves apart from other courses in their area by having more challenging holes. Because existing courses usually aren’t able to change their course layouts, this is an opportunity that business owners who do open new courses -- and, therefore, get to design their courses’ holes -- can take advantage of.
Golf course businesses can be effectively marketed through social media and online advertisements directed at area residents. Pur chasing advertisements on local sports radio stations is another effective way to raise awareness of a course.
In 2015, 69 percent of golf courses broke even (24 percent) or earned a profit (45 percent). The profitability of these courses varies greatly, depending on their location, prestige, fees and amenities. Some just barely broke even on the year, while others brought in sizable profits.
The costs associated with opening a golf course are significant. The largest upfront expense is usually land, as courses can require 200 acres of land or more. Other major expenses include:
A golf course’s ideal customer is an affluent golfer. Such a person enjoys the sport, and they have the money necessary to go golfing regularly.
Opinions expressed by Forbes Contributors are their own.
Golf courses and country clubs, long symbols of wealth and status, aren’ t doing so well themselves, financially speaking.
On an encouraging note, Sageworks’ data show that even though golf courses have negative margins, they have strengthened steadily since 2008, when the average net profit margin was about -9%. Weaver said golf courses and country clubs have reined in overhead costs nicely, cutting them since 2010 by about 3 percentage points. “Those overhead costs are ongoing costs that aren’t direct labor or materials, so it’s showing these country clubs and golf courses are able to carefully manage spending.”
Another benefit of buying a home on a golf course is that the majority of the surroundings will be well manicured and maintained. Since most golf courses pride themselves on the condition of their grounds, the chances of having well manicured surroundings is higher.
Before buying a home on a golf course, buyers need to realize that this they may potentially see this type of behavior. If a buyer is planning on having summer picnics with their family in their backyard, they should expect to see similar types of behavior at one point or another when buying a home on a golf course.
One of the biggest fears of homeowners who live on a golf course are those wayward golf shots from the golfers. Imagine, you’re sitting in your kitchen enjoying your morning cup of coffee and next thing you know, you hear a loud crash through your beautiful picture window from a wayward golf shot. Doesn’t sound like much fun does it?
If a home is located along a fairway on a long par-5, the chance of wayward golf shots hitting them are much higher.
As a real estate professional is determining the market value of a home, one of the factors they take into consideration is location. Homes that are situated on a golf course are not for everyone, so this reduces the potential number of buyers.
The Greater Rochester NY area is known as one of the best golf cities in the United States. As a Rochester NY real estate agent , anytime a buyer is considering the purchase of a home that’s located on a golf course, I recommend they evaluate and weigh all the PROs and CONs.
In addition to the increased probability of well manicured surroundings, many golf courses are simply beautiful. Whether it’s a golf course with a pond and fountain or mature, tree-lined fairways, the surroundings of a golf course homes can be breathtaking.
Finally, I can tell you that it’s not unusual for a club to make a profit of $5–10 million from a Golf Major. This obviously can go a long way in offsetting member assessments, and in funding improvements to the course and the club facilities.
If you have honest hard working people in charge and the right golf course for the population base you could do very well and have fun doing it.
The host club sells tickets to spectators for attending the events, they charge for parking, and of course they charge for food and beverages including alcohol during the events.
For a mid-tier course, it’s tough to go below $750k annually. Most often, if you plan on offering higher quality and good service, you might be looking at $1.5 Million annually.
Depends on the level of detail you want to include. From my experience a usga spec green can cost upwards of 70K each. So that cost Alone is over a half million.
Location, location, location, design, amenities, value to customers, and customers who have the means to afford the lifestyle. These are the elements that may afford a course’s success. Not just green fees.
Golf courses are either exclusive or accessible. The accessible courses must compete with other accessible courses for playership, and they must rely on auxiliary income sources (golf car and pull cart fees, food and beverage, leagues and special events, and apparel/equipment sales and services) to offset costs. without these profit systems operating healthily and a ready audience of regular players—players who play that course regularly without paying discounted rates, which means the course is worth their money to play—golf properties can struggle.