Kalen,
The hard part is, its all over the board. As I mentioned, a high end course that can get $200 fees certainly stands a better chance of doing better. But, using the high end of the numbers I posted above, the breakeven point of a course is going to typically be about $1.5 Mil and with good profit, maybe $3.1 Mil.
For a higher end course, costs go up to at least $4.7M:
Construction and Land Cost Debt - $80 per $1000 on $15M - $1,200,000
Maintenance Costs ($1,200,000)
Pro Shop, etc. ($800K)
Profit at 20% (on $15Mill) $3,000,000
Revenues would need to be $6.2M for the same ROI. I do know of some courses in the south grossing more than that (40,000 rounds X $165 per head ) even now.
The problem is, too many of those were built. If you build a $15 Mil facility and CAN'T draw that many players at that price then the second and third owner scenario comes into play......I guess the good news is that you can only go so broke. But the most likely Rosy Scemario (I think I dated her once.....
) is that your revenue numbers come in a little below those which most do, you might struggle to break even at $4.7 Mil.
So the question is, is a high end course breaking even at $4.7 Mil in revenues less or more successful than a $30 course breaking even with $2 Mil in revenues?
BTW, in some markets, private clubs were actually doing better than publics. I suspect this economy has that being changed, but still, those high end second clubs up in Montana, etc. are probably still doing quite well, at least the successful ones.
Lastly, its amazing how elastic operation costs can be. I know a lot of courses who have clipped maintenance budgets to that $400K range from much higher a few years ago. Thanks to some great efforts by the supers, the places are still pretty decent if not almost equal in condition to a few years ago, save some little details. In other cases, it shows and the facility goes into that long death spiral.
Construction debt is a killer, but basically static, although I am sure most refinanced when rates were low to reduce it, much like we all did with home mortgages. Over time, ops costs go up, but raising construction costs from a mid level to a high level facility by $6 Mil adds a half a mil a year to the cost structure. Raising maintenance and service levels adds just as much. Small increases in construction cost (esp if for drainage, sod, cart paths and irrigation) may also reduce operations cost long term and are sometimes justified.
So, its basically first a question of market and demographics to support the business plan. Then, marketing your product can help. Its surprising how ineffective most golf courses market themselves. Lastly, its how much you spend and just as importantly, how you spend it.