Golf is no longer sustainable as we know it...

[Tom_Doak]

BTW,

the gca's I know working in China all say they are trying their hardest to keep the Chinese from making the same mistakes we did, like putting money into square mile clubhouses, but to no avail.  In some ways, I think there is just a learning curve where a country new to golf just needs to find out for themselves what works and what doesn't.  But it is true that China and most of the rest of the world has adopted the CCFAD model of the USA.

Jeff:

From what I've seen in China so far, the golf course architects may be trying to tell their clients to downsize the clubhouses [to no avail -- the average Chinese clubhouse is the biggest in the world, because they think there should be 50 private dining rooms in them].  However, many of those same architects are specifying that the ENTIRE COURSE be sand-capped and irrigated from wall to wall, at unbelievable expense.

[Matt Day]

I've asked before but was is the barrier to nine hole golf in the US? 65% of my play is nine hole golf, and that would be the same for the other public tracks in Perth. We have a twilight rate of $9 for as many holes as you can play from around 75 minutes before it gets dark and do 3-4,000 of them per annum. it gets bums on seats so to speak and people spending in the pro shop and tavern.

[Jim_Kennedy]

Matt,
No barriers to nine hole golf, not where I live. We have quite a few in our area, and even the 18 hole clubs all have afternoon leagues that only play nine.

If more haven't been built it's because no one wanted to go through all the hoops for half-a-pie. A well run/used nine hole course might have twice the profit margin, in percentages, of an eighteen hole facility, but not the volume.

[Matt Day]

Matt,
No barriers to nine hole golf, not where I live. We have quite a few in our area, and even the 18 hole clubs all have afternoon leagues that only play nine.

If more haven't been built it's because no one wanted to go through all the hoops for half-a-pie. A well run/used nine hole course might have twice the profit margin, in percentages, of an eighteen hole facility, but not the volume.

Jim
I was interested why 18 hole tracks don't get more 9 hole golf. As an example was talking to staff at Torrey Pines and they did very little 9 hole golf out of the 180,000 rounds, its like the mindset is 18 holes or nothing? We do around 175,000 rounds for 36 holes, of which 65% is 9 Holes.

more 9 hole rounds was brought up by a couple of speakers at the golf course owners sessions at the GIS as a way to increase participation, but didn't seem to garner much enthusiasm

[Joe Hancock]

Not to sidetrack too much, but....

How many here are members at/ or frequently patronize the "sustainable" golf courses that we all long for?

Or, is it all just good discussion?

Joe

[Jim_Kennedy]

Matt,
If I made the trip from CT. to TP I would not play nine holes, not unless the nine holes were #37 through #45.  

The TP or Pebble Beach or etc., etc., type of golf course is never going to see many 9 hole rounds, even from players who live nearby.


Joe,
You can count me into the number that frequently patronizes the sustainable.  
 

[Joe Hancock]

Not to sidetrack too much, but....

How many here are members at/ or frequently patronize the "sustainable" golf courses that we all long for?

Or, is it all just good discussion?

Joe

What is a sustainable golf course? Are we talking economics or site conditions, or a combination of both?

Kelly,

The more I try to get a grasp of what sustainable is, the more I believe it to be a personal perspective. So the answer to your question is "yes".

Jim K.,

Golf needs you!

Joe

[Tim Nugent]

Matt,
No barriers to nine hole golf, not where I live. We have quite a few in our area, and even the 18 hole clubs all have afternoon leagues that only play nine.

If more haven't been built it's because no one wanted to go through all the hoops for half-a-pie. A well run/used nine hole course might have twice the profit margin, in percentages, of an eighteen hole facility, but not the volume.

From personal experience, here's the deal.  Our 9-holer got MORE volume than nearby 18's but could only charge about 1/3 of those 18 rates.  Built a huge, all-grass tee range as price is equal no matter how many holes.  Still had much the same overhead as an 18 (CH the same, maint 2/3) and only being at the course for 2 - 2.5 hrs, didn't do much in way of F&B.  Plus more walkers than 18's = less cart rev.  The demographic was the value customer so Pro Shop margins had to compete w/discount golf superstores.

So, why not more 9-holers?  Do the math.  Now, 18's don't like 9-hole rounds unless they are at the end of the day because every 9-hole rnd going off the 1st tee is one 18 rnd that can't.  When the tee sheet is full, this drops right to the bottom line.

Joe, as you can see, I put my money where my mouth is.

Kelly, one would like to think that there is a symbiotic relationship.  Because we did sustanable within a advantageous market, we made money and all our investors got their principal back by yr 11 and were all bought out by one partner for the Present Value of the Income over the the remaining term of the land lease.  It will be interesting to see how it proceeds now that a Mgmt. Co. has been brought in.

[Jason Connor]

Perhaps the answer lies in one of my favorite quotes from a December 1999 article about John H. Newman, Jr. then president of First National Bank in Scottsboro, Alabama.  Newman said "There are three ways to run a bank.  You can let your customers run it. You can let your competitors run it. Or, you can run it."  The survivors will figure out, or have already figured out, how to run their golf courses.  

Great quote, but I think he forgot an option:  let the government run it!

Seriously, golf isn't going anywhere.  Some courses are.

Just like most of us agree that it isn't a company's primary responsibility to keep a full staff of workers employed, it isn't fair to say that the 'golf industry' (or whatever the ride term would be) is obligated to keep every course from 2002 up & running, all  supers employed, all architects busy, and maintenance workers full time and in addition to keep adding 100 new courses a year.

Sectors expand and contract.  Good people adapt.  Golf over built largely because of housing being overbuilt.

Golf is sustainable -- because markets in the free market tend to be sustainable.  But parts of the business will shrink.  Some people in it will exit.  It's a shame that some golf people have to make changes they'd rather not.  But it happens.

[archie_struthers]

 


Golf is not going to go away , though some courses willl, 

Good operators will find a way to make the bottom line better, and players may have to get used to a little Pittsburg Medium....The core is going to be good but the edges will be a little burnt.

This will be true with maintenance and amenities and the best operators will give good service ...but maybe not a lot of it...and clubhouses will be less grandeur and more functional....clubs in the best locations will survive and perhaps a few will become even stronger financially as their competitiors fail.   The problem for the average course with marginal revenue is that and I'm sure this will get me in the soup again LOL  is the municipals , who will hold out til the end with taxpayers  assistance.

In our area the municipals are all losing ventures , all of them .   To the extent that they compete with private enterprise and put them in jeopardy , I am already on the record.   

[Brent Hutto]

...and clubhouses will be less grandeur and more functional....

An interesting issue over the coming decade or so is whether there's any flexibility available to somehow shutter or downsize some of the clubhouse monstrosities that are out there sucking down the red ink.

I have no clue about golf-course finance, even less regarding of private clubs. Is it possible that courses/clubs with clubhouses 5x-10x what they can support will be forced to go NLE because of the clubhouse? Even when the course as a standalone is possibly "sustainable"? I can just imagine a scenario where the entity which took on debt for both course and clubhouse is forced out of business rather than being able to shed the money pit and keep the course...

If so that would be the final irony, wouldn't it?

[Jud_T]

Not to sidetrack too much, but....

How many here are members at/ or frequently patronize the "sustainable" golf courses that we all long for?

Or, is it all just good discussion?

Joe

I'm currently considering a national membership at a club that I think most here would consider sustainable...Both because of the F&F playing conditions as well as the fact that the "sustainable" cost structure flows down to membership...

[Rick Sides]

It is ironic that this thread is right next next to the thread on Old Mac and Bandon Dunes.  I say it's ironic because I know that Bandon rates for a round go up to almost $300.00.  Do you think in the economic crunch we have been encountering and given the fact that the economy is probably going to get worse, that people will continue to pay $300.00 for rounds of golf?  I know that Bandon is a special place, but will these type of high end resorts be able to continue with these rates in the upcoming years?

[archie_struthers]

 
Jud   great point again the clubhouses and upkeep of saem are the weak link of most of the high end public and private facilities . the cost of maintaining these mausoleums to excess is unreal

[Tim Nugent]

Brent - very astute observation.  Dad used to tell developers/owners that clubhouses were like boats, something you had to throw money at just to keep afloat.  It's funny/sad how often the size of the maint. staff is put under a microscope (the guys who are maintaining "the reason for being") while the clubhouse operation is taken for granted.  I've sat in on many meetings where ther clubhouse just grows and grows from the rational of "well, since we have a grill, we could expandit to a kitchen and serve dinner, and if we had a kitchen, we could do outings, and if were doing outings we could do banquets - so we need seating for 200.  And weddings - but wedding are in the afternoon so we need more parking and a place for the golfers, so we need a separate grill..."

[Brent Hutto]

Rick,

I think before Bandon lowers its rates significantly things would have gotten so bad that 80% of the members of this forum would be unemployed. Sure it could happen but it ain't going to be this year or next, absent some calamity that shuts down tourist travel over long distances (I hate to bring that up but it is alas no longer unthinkable).

[Jud_T]

Rick,

Can you name any other more economical way to play 4 of the best courses in the world?

[Tim Nugent]

Rick, yes and no.  Places like Bandon wll continue to draw because they've just scratched the surface and have been adding on as a means to entice one-timers to come back.  They also have a varied selection of options.  Since it is a destination, the cost is not as great a factor as, say, the CCFD vs local muni.  Those rely on repeat local play whereas the Bandon's, PB's, PH's, St. A's etc. have a much vaster pool so they only need 1/1000 of the 25m golfing market to survive.  But as places like Cabo come online with enough critical mass, they also will be vying for that same market segment.  And, down the line, there will be a fall off as the Been-There, Done-That segment has been satisfied.  Much like the Kohler set-up, Started with Black Wolf Run, one great course, added a second.  Then coupled on the Whistling Straits Dual of Straits and Irish for variety and critical mass - 4 courses 2 days, one night if driving, longer if flying.  

Granted, the pool has shruck considerably and peoples general mindset has been altered to the frugle side, but that just shifts priorities, they don't go away.  You may see lon playing 10 less $100 rnds to treat himself to a grand trip.  Or dropping the CC membership and using a portion of that for trips instead.  

Jud, sure, join the PGA Tour - look, they're playing ANGC today and didn't have to pay a dime.

Personally, I do think things aren't going to get worse but the spend then tax mentality we have here in the US will hurt, and hurt those who can currently afford such trips.

[Brent Hutto]

Personally, I do think things aren't going to get worse but the spend then tax mentality we have here in the US will hurt, and hurt those who can currently afford such trips.

For the past decade or so that's been supplanted with "spend but don't tax". It's the fiscal equivalent to the old Internet paradigm where revenues don't matter because you could just spend your capital indefinitely...until you couldn't.

[Jim_Kennedy]

Tim,

I didn't mean volume of play, just volume of dollars. Three of us were considering a purchase in 2000 and every 9 hole course we looked at was between 15 to 20 % 'return' while the 18s were 7 to 12%, but the volume of money generated at the 18s was well more than twice the volume of the nines.
As it panned out we all stayed working at out respective clubs.


By the way, several 18s I know of sell an hour, maybe an hour and a half of 9 hole rounds first thing in the morning. They send 'em off the back. Must work well for them, and let them grab a little extra revenue.

[Rick Sides]

I can't argue that getting to play Bandon's 4 courses is probably one of the best group of courses in the world, I just wonder with the economic crisis that were in the middle of, and based on many intelligent market analyzers prognostications that the market is going to get much worse, will places with these high price tags be able to sustain the same play, or could it drop off significantly?

[Ken Moum]

...and clubhouses will be less grandeur and more functional....

An interesting issue over the coming decade or so is whether there's any flexibility available to somehow shutter or downsize some of the clubhouse monstrosities that are out there sucking down the red ink.

I have no clue about golf-course finance, even less regarding of private clubs. Is it possible that courses/clubs with clubhouses 5x-10x what they can support will be forced to go NLE because of the clubhouse? Even when the course as a standalone is possibly "sustainable"? I can just imagine a scenario where the entity which took on debt for both course and clubhouse is forced out of business rather than being able to shed the money pit and keep the course...

If so that would be the final irony, wouldn't it?

I would argue that all three of the courses I have been a long-time member were sunk because of a clubhouse, and it didn't require them to 5-10 times the size needed.

I grew up at a nine holer that spent $160,000 on a clubhouse and nearly went under until it was "saved" by an influx of cash from a couple of local millionaires

Then I played a muni in South Dakota that had been a private club, until it found the clubhouse AND golf course unsustainable on the amount members could pay. As a muni, it did fine, although with a very low maintenance budget--actually a "sustainable" maintenance budget.

Now, my country club is in receivership thanks to a $1 milion clubhouse loan made more than 20 years ago. The bank's receivers have done what no board of directors ever had the guts to do. Shortened the menu to grillroom items and cut the staff to the minimum needed to suport that service. They also closed the pool because it required lots of repairs--repairs that our board probably would have made if we weren't already sunk.

Dues are now $99 a month for everyone in the club, instead of having as many as 15 categories of membership, and the

There's anothe course in town that is now owned by a multi-course operation, but 15-20 years ago it was a private club. Then they built a fancy clubhouse. For at least a decade, it was owned and operated as a semi-private club with a new, smaller clubbhouse, while the fancy clubhouse was leased to a public restaurant.  A couple of years ago even that restaurant closed , and the owners sold to the mulit-course operators.

BTW, that company offers family memberhip for $30 a month that includes unliimited golf at seven courses, and unlimited fitness at five fitness centers.

They are in the process of getting two more nine-hole courses for that operation, and two 18-hole courses that would cost $99 a month.  I suspect they a re a leading contender to end up owning my club, which would fit the "new" $99 model.

My point is that once these courses got recapitialized at a lower cost, and once the operators gave up on trying to run a restaurant, they are able to be operated on a sustainable basis--provided you spend very little money maintaining them.

And there's a market for that kind of golf, proven by how busy $30/month the courses are.

K

[Bradley Anderson]

Back in the 90's I talked to quite a few people about building a $25.00/round golf course that was walking only.

I had all the maintenance programs figured out. It was going to be push up greens and kentucky bluegrass fairways with a simple manual irrigation system.

The clubhouse was basically a trailer in a gravel parking lot where you pay a green fee and maybe get a hot dog and a coke afterwards.

But aside from all the simplicity, I thought you could genuinely build a great golf course from an architectural standpoint. You could design good drainage and plenty of bunkering (that you could rake just enough to control the weeds). And the bunkering would be grassed with fescue so that you don't have to edge it constantly to keep it from growing in. Pure simple maintenence, and F&F conditions. And with no carts you could let it really dry out.

Basically I believed you could build a great golf experience for $25.00 a round. Actually I still believe it is possible.

But back then everyone told me that you couldn't do that because in any metropolitan area where you could draw the volume of rounds to make that business model work you wouldn't be able to afford the land to build it. In other words, the acerage was too valuable as development land, to be used for that business model. You might be able to find land for something like that somewhere, but it would be too far from humanity to draw the volume of rounds needed to make it work.

But maybe now that development has slowed down - maybe now that business model might have traction?

[Jason Connor]

Bradley, would you mind building that on the east side of Orlando!?

Just curious:  not counting land/regulatory fees, what is your estimate for the initial amount of money needed to open this course?  And how many rounds a year do you need at $25.

[Tim Nugent]

Jim, that makes more sense.
Re: sending nines off the back early - must make the Super real happy - not.

Bradely, It can be done, just need to find a closed landfill.

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