How many "GD Best NEW" are profitable?

[Mike_Young]

If you take all of the "Best New Courses" from GD over the last 20 years......how many are profitable?  that is w/o being subsidized by Real Estate......and if you feel they are not profitable......what is the reason?   50%....75%....25%?

And up front...yes some may be but I feel most are not......

[Phil_the_Author]

Mike,

Why do you feel that most are not? Especially if you are limiting the list to courses that are not "real estate subsidized" wouldn't that actually increase the likelihood that courses that have been in business on their own for 5, 10 and as long as 20 years have to be profitable?

[Mike_Young]

Phillip,
How are you? Hope you and family are doing well.

I should have said "not private 501-3c clubs....who can assess etc....I mean to say public .....

Mike

[John Moore II]

I have to agree with Philip, especially on the public side. I find it hard to believe that any public course still in existance would not be profitable, at least a little bit. I mean, maybe every so often they have one year where there is not a profit, but if courses are consistently in the red year after year, those courses WILL close or sell. If the unprofitable course is sold, we have the same cycle: its profitable or sold.

I too would really like to know why you feel these courses are not profitable?

[Mike_Young]

I have to agree with Philip, especially on the public side. I find it hard to believe that any public course still in existance would not be profitable, at least a little bit. I mean, maybe every so often they have one year where there is not a profit, but if courses are consistently in the red year after year, those courses WILL close or sell. If the unprofitable course is sold, we have the same cycle: its profitable or sold.

I too would really like to know why you feel these courses are not profitable?

John,
You both may be correct but I know several that have a very large loss each year and have owners that can cover....and continue to do so.....some of these places with 15 million or more debt are just not making it and there are more than a few.....IMHO

[John Moore II]

I have to agree with Philip, especially on the public side. I find it hard to believe that any public course still in existance would not be profitable, at least a little bit. I mean, maybe every so often they have one year where there is not a profit, but if courses are consistently in the red year after year, those courses WILL close or sell. If the unprofitable course is sold, we have the same cycle: its profitable or sold.

I too would really like to know why you feel these courses are not profitable?

John,
You both may be correct but I know several that have a very large loss each year and have owners that can cover....and continue to do so.....some of these places with 15 million or more debt are just not making it and there are more than a few.....IMHO

Stand alone golf courses, no real estate? Public courses posting these huge losses? I would say it is happening, yes, but I just don't see it continuing for long.

[Jeff_Brauer]

I know that the winners Quarry (2004) and Wilderness (2005) do make a profit.  In 1998, when the Legend opened, it was wildly profitable.  Rounds are somewhat down at all three, but within the explanation of weather from season to season.  And, they probably haven't raised rates as fast as their expenses, but they report to me that they make money.

And none are real estate driven, although the Wilderness is casino driven.

[Mike_Young]

I know that the winners Quarry (2004) and Wilderness (2005) do make a profit.  In 1998, when the Legend opened, it was wildly profitable.  Rounds are somewhat down at all three, but within the explanation of weather from season to season.  And, they probably haven't raised rates as fast as their expenses, but they report to me that they make money.

And none are real estate driven, although the Wilderness is casino driven.

Jeff,
Sounds good...I say a lot of them don't.....   is that before EBIT   .......

[Jeff_Brauer]

Mike,

I know that Giants Ridge payed the debt and then some, but I don't have last years results. It might have gone down, but they did pretty well and kept steady play over the years they have been open.

[Phil_the_Author]

HI MIke,

We're doing well. Hope everything is going good for you & yours also.

I can understand that there may be a number of public courses that are suffering. For example, from the 1950's until the late 1990's the revenues generated by the golf courses at Bethpage State Park pretty much funded the rest of the New York State park system itself. That was the maon reason that the courses became so downtrodden as the money was never put back into them.

Many municipalities budget money for the running and maintenance of their golf courses without designating that the revenues produced be enough to cover the costs and so the numbers get blurred into the larger overall budgets.

Still, I thought most new (last 20 years) public courses were built with the "carry their own weight" principle strictly in place...

[Jim_Kennedy]

Mike,
GD's top ten affordable courses for the year 2000 were: Paa Ko, Hawktree, Gray Plantation, Thousand Oaks, the Warren Course, Red Hawk, the Tennesseean, Monticello, Capitol hill and Summer Grove.

I don't know if they're profitable, but they're all still  in operation after nine years, so someone must think they are. 

[Mike_Young]

Mike,
GD's top ten affordable courses for the year 2000 were: Paa Ko, Hawktree, Gray Plantation, Thousand Oaks, the Warren Course, Red Hawk, the Tennesseean, Monticello, Capitol hill and Summer Grove.

I don't know if they're profitable, but they're all still  in operation after nine years, so someone must think they are. 

Jim,
I agree with all that many are still in operation but out of the ones you mention above...I know of three that are not and have had infusions etc....
All I'm basically saying is the same as in the thread "build/own" a golf course"  10 million or more in debt and somebody is subsidizing.....that's all....hell I want them to be as prfitable as anyone......

[Tom_Doak]

There is a difference between "profitable" and "successfully paying down what it cost to build them".

Many of these courses were funded by wealthy individuals and/or limited partnerships ... very few were funded more than 25% to 50% by banks.  I agree with Mike that there would be a lot of courses (Best New winners or not) which have not returned much of anything to their investors, but which break even on operating and debt so they stay in business.

[Jim_Kennedy]

...."a lot of courses...Best New winners or not,(just) break even".....

Well, if that's the case we should all be thankful that golf was invented before stor-it-all's.

[Mike_Young]

...."a lot of courses...Best New winners or not,(just) break even".....

Well, if that's the case we should all be thankful that golf was invented before stor-it-all's.

Jim,
What I am trying to say is that a very small segment of golf courses get the hype ad promo in the national mags....yet of the 16500 courses in the country there are many that have made it for a long time and they are golf in this country.  Greens may be push up...irrigation may be quick couplers, equipment may be used but they know how to make t work.....so much of the new I see just has zero chance with the plan that is laid out before them.....and yes there are some that do well.....

[Garland Bayley]

Borrowing from HS graduation, mayby GD should publish a most likely to succeed list.

[Lynn_Shackelford]

A most likely to succeed list would be a good idea.  It would show people wanting to own a golf course a successful model.  Until you understand that most golf courses lose money, you don't know the business well.

[Mike_Young]

Garland and Lynn,
I think you guys have a great idea.....

Face it...the next few years...anything that opens makes a list.....rest assured the mags are trying to figure what type of list to do as we sit here.....I think you may have it.....

[Jim_Kennedy]

Mike,
I guess my perspective is a bit slanted. Around here we don't see a lot of new courses getting built and we don't see many being closed, either. Heck, the average 'age' of a golf course in Litchfield County, Ct. is probably around 80 years.
The two 'new' courses we have were opened in 2000 and 2002. One is a 9 hole exec and is a low key, family built & managed affair. The other is an 18 hole public, built by an owner who also owns a profitable 9 hole course(built in the early '60s) in the county. Both are successful because they filled a need and were built on small budgets.