what are the fixed operating expenses of a golf course

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.

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What happened to the maintenance budget for golf courses?

Out of necessity, maintenance budgets were frozen or cut at many golf courses while the cost of many inputs – e.g., plant protectants, water, equipment – continued to rise.

What are the most expensive things to maintain on a golf course?

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 achieved by mowing, rolling and hand-watering the greens to prevent them from burning out.

Why are golf facilities so expensive?

Many facilities now are exposed to high costs caused by failure to replace old equipment or upgrade inadequate facilities, including higher equipment repair costs, reduced efficiency, increased labor requirements, playability issues and many others. Failing to invest in improvements and upgrades may also affect how golfers perceive a facility.

How much does it cost to run a professional golf course?

Alas, this isn’t a column about fantasy but about money and golf. 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.

What is the operating cost of a golf course?

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.

How much revenue does a golf course bring in?

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.

How much does the PGA pay to use a golf course?

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.

How do you maintain a golf course?

Tips for Maintaining Your Golf CoursePrioritize Sustainability. It takes a lot of water, electricity and fertilizer to maintain all that vibrant green turf. ... Be Specific with Maintenance. ... Eliminate Ball Marks. ... Repair Divots. ... Rake Sand Bunkers. ... Rough It Up. ... Course Design. ... Lightning Safety.More items...

How do golf courses make money?

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.

What is the profit margin on golf clubs?

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.

Who is the richest caddy in golf?

1. Jimmy Johnson. What is this? Jimmy Johnson is currently caddying for Justin Thomas, but he has a successful history on tour.

Do caddies pay their own expenses?

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.

How much does it cost to be a member at Augusta?

Membership is believed to cost between $100,000 and $300,000 and annual dues were estimated in 2020 to be less than $30,000 per year. Club members are sometimes referred to as "green jackets."

How hard is it to maintain a golf course?

Maintaining an average 18-hole golf course – which is larger than 70 football fields – takes work and lots of it. The average 18-hole course may also have dozens of bunkers, a few miles of cart paths and many other course features. As you can imagine, it takes a lot of work to maintain all the different components.

How many employees does it take to maintain a golf course?

As a result, private facilities employ on average 10 full-time and 12 seasonal maintenance workers, while public courses have an average of six full-time and a dozen seasonal workers.

How many employees does it take to run a golf course on average?

How many people does the average business in the Golf Courses & Country Clubs industry in the US employ? The average Golf Courses & Country Clubs business in the US has 28.9 employees.

What is the most important thing in a golf course?

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.

Who is the vice president of Billy Casper Golf?

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.”.

Buzzkill

Don't have midwest info but when I worked in Florida our budget for two 18 hole courses with 2 mechanics and 15 greenskeepers was $750K which I believe is low by most standards. This was a private country club too.

Pepperturbo

In my experience - some numbers quoted here are low. Maybe they are low end courses (not meant as an insult anyone), can't say. On average, courses in AZ and CA cost about 6M-15M, depending on course turf, turf equipment and facilities. An acquaintance bought a tournament level course years back.

HenryBall

If you are running an 18 hole facility with food and beverage ops here are some of the numbers you can expect Food and Bev operation: 150,000 Golf related expense (flags, event signs, handicapping, pos software, staff, range balls, etc): 100,000 Maintenance: 200,000 Marketing: 75,000 Misc repairs/expenses: 100,000 These numbers may be slighlty skewed.

8orBetter

I'm sure the cost of gas is a budget buster for a lot of courses out there, especially with a weak economy where membership is cutting back either due to being laid off from work or just cutting back on expenses.

KennyLee

Way too broad of a question to get a good answer to without a ton more information. I've seen budgets that were $300k per year (goat track) and places where the greenskeeper made that much or more.

Tstiles

How much could one expect to spend on operating expenses for an above average golf course in the Midwest? I don't have much information to offer but would like some info on this. Thanks guys.

SFbaybum

Are you guys including other op expenses if you have more than a golf course (pool, tennis, etc)?

What was the effect of the recession on golf courses?

The good news is that the recession caused golf facilities to re-evaluate maintenance practices, presentation options and course amenities. Many golf courses were forced to differentiate between essential and nonessential maintenance programs so they could focus on what matters most.

Why are golf courses removed from the Southwest?

Out of necessity, many courses in the Southwest removed maintained rough in peripheral areas to cut down on water usage and save money. For years, golf courses have also replaced mown rough with naturalized or unmown rough.

What is the most frequently mowed area of golf courses?

Putting greens are the most frequently mowed area of golf courses and the associated costs are significant. Mower technology has improved to the point where triplex units can produce a quality of cut equivalent to that of walk-behind mowers.

How does failing to invest affect golf?

Failing to invest in improvements and upgrades may also affect how golfers perceive a facility. Golf is a competitive business, and golfers are more likely to play at golf courses that demonstrate a commitment to quality by making improvements.

How did the recession affect golf?

These effects are not surprising given the challenges created by an oversupply of golf courses that is partially the product of the aging golfer demographic and declining participation rates among younger generations. Furthermore, extended periods of severe drought have increased the price of water and limited its availability for golf courses.

Does fertilizer save money?

Fertilizer and Plant Protectants. Carefully analyzing fertilizer costs can reveal some significant opportunities to save money even though fertilizer does not represent a major percentage of a typical golf course maintenance budget.

Is golf course maintenance competitive?

Golf course maintenance work is demanding and the labor market is very competitive. Recruiting and retaining reliable maintenance staff is currently one of the biggest challenges at golf facilities across the country. Additionally, there are many hidden costs associated with hiring and training new maintenance employees.

How much did golf courses spend on iron in 2016?

Equipment suppliers should be primed for a solid 2016. The biggest budgetary rise will be in mowing/cultivating equipment, with the average course spending $42,800 on iron in 2016 compared to $31,300 in 2015.

What was the average maintenance budget in 2012?

For those wondering, the average maintenance budgets in 2012 and 2013 were $651,392 and $622,500, respectively. More than half of superintendents (52 percent) will see their maintenance budgets increase in 2016 while only 16 percent will be forced to trim expenses.

7.1 Important Assumptions

History has proven there are two types of businesses that thrive in depressed economic times. These two categories of businesses are alcohol and family entertainment. As far back as the depression of the early 30s, the family entertainment industry has performed well in prosperous times and in economic downturns.

7.2 Break-even Analysis

We see an extremely low variable cost in the Break-even table. While some would consider this an error, we know it to be the beauty of the business. The variable costs are limited to a scorecard (1 cent), a stubby pencil that is used several times, and the replacement of balls (which are used hundreds of times).

7.3 Projected Cash Flow

With a first reading, the projected cash flow numbers appear unrealistic. Allow us to reinforce information given in the notes to the sales forecast.

7.4 Projected Profit and Loss

Estimates for financial projections are prepared with a conservative look at all aspects of the business. We have relied on three external sources for input and validation. We are in contact with two helpful course owners in similar demographic areas. One business has been operating for one year and the other for four years.

7.6 Business Ratios

As noted earlier, this family entertainment business has no inventory and does not do sales on credit. Therefore several ratios normally deemed important by the reader will not show reasonable numbers. The high value for Profit Before Interest and Taxes is not an error.

What is rough in golf?

ROUGHS. Roughs are generally uneven areas covered with high grass, brush, and stones bordering golf course fairways. When examining these parts of a golf course, examiners will generally conclude the land preparation costs of creating the roughs are not depreciable.

Is land preparation depreciable?

In these cases, the land preparation costs are inextricably associated with the land and, therefore, are added to the cost basis of the land and are not depreciable. A basic tenet in tax law is that land is not depreciable.

Is golf course land depreciable?

In addition, the costs of general earthmoving, grading, and shaping of all golf course land improvements are also not depreciable. These costs are attributable to land preparation that is inextricably associated with the land and are, thus, added to the taxpayer's cost basis in the land and not depreciable. BUNKERS.

Do tees have to be depreciated?

However, some tees may be constructed with drain tiles or pipes to control drainage onto other portions of the course. The only element of this type of tee subject to depreciation would be the drain tiles or pipes and associated land preparation lying directly above the pipes.