The "Affordable" $150 green fee

[Tom_Doak]

This is an offshoot of the recent GOLF Magazine ranking of affordable public courses, and the questions from Peter P. and Sean A. (among others) about price and value.


When I got into the business of designing golf courses, I was very much an idealist about what it should cost to build a really good course and how that would enable the price to be reasonable.


The crude rule of thumb in the golf business was always that the green fee should be $10 per every million dollars spent to develop the course.  Obviously, the ratio is worse at the low end of the scale:  it still costs money to staff and maintain a course even if I somehow built it for free.


For my first course, High Pointe, we set out to build a very good course that could subsist on a $45 green fee.  The construction budget for the course itself was $1.3 million; with my fee, a maintenance building and equipment, a clubhouse, and something to account for the cost of the land [which the client had owned for years], the client had between $4 million and $5 million sunk into the course at opening day.


By then, everyone was excited about the course we'd built, and the price of the big-name course down the road was much higher, and the consultants whispered in the client's ear that he should try to get $80 for the green fee, because a higher price would make everyone assume the course was better.  But the maintenance level and the staffing of the place had been done for a $45 course, and the deficiencies in service were pretty obvious.  They lowered the green fee back to $50 or $60, but still, should have been in a position to make money.


Except there were too many golf courses in Traverse City.  The big resort down the road went into bankruptcy without ever paying a penny of principal on the $40 million they had borrowed to expand in the 1980's, and suddenly the new guys owned a big, highly publicized Jack Nicklaus course for 10 cents on the dollar for what it had cost to build.  [Plus, they could treat the golf operation as a loss leader to fill rooms at their hotel.]  There was tremendous downward pressure on the green fees for other area courses as a result, and all of them struggled, until two [including High Pointe] failed in the financial crisis.


So, lesson number one:  the truth is that no matter what the green fee SHOULD be, after opening day the price WILL be whatever the market will bear.  If you spent $20 million on the course but nobody thinks it's all that great, or there's a better course down the road that charges less, you are not getting $200 per round.  But if you're in a location where people WILL pay $200 a round, you're going to charge that, even if you only spent half that much to build it.




My dilemma has always been that the better a course I build, and the better the client does financially, the less affordable my courses are going to be.




Now, back to the economics of golf in America.  Short of philanthropy, no developer is going to start building a project with plans to charge less than the break-even price, unless the course is a loss leader for real estate.   And, these days, it usually costs north of $10 million to develop a new course, when you include all the costs.  I might be able to "build it" for $3 million if it's on sand and the contours are perfect, but it's more likely to cost $5m or $7m, if it has modern conveniences like cart paths and bunker liners and state of the art irrigation.  And then with the maintenance building and equipment and grow-in and clubhouse and land costs, you are easily over $10m all in, and maybe pushing $15 million.


Or, consider that Merion and Oakland Hills recently spent $15 million just to rebuild what they already have.


In which case, that unaffordable $150 green fee is the reasonable expectation of what it will cost to play a modern course.  The only places that are charging less than that are places where the market won't bear that kind of green fee for even the best course in the area . . . which is why the GOLF Magazine list is skewed toward older courses that weren't subject to the new math, courses in rural areas where people can't afford more, and public facilities where there is some outside pressure to keep the price down.  [If Bethpage Black was owned by a private individual, I guarantee you the out-of-state rate would be $250 or more.]




Does that suck?  Yeah, it kind of sucks if you're paying for the green fee; it sucks in a different way if you're paying for the golf course to be built.  I'm now fully a party to the system because I am a part owner in the new St. Patrick's course, and I have a fiduciary duty to the investors to pay them back.  After that, maybe I will actually make some money for having designed it. 

[Kevin_Reilly]

Anyone who skis, or has taken kids to Disneyland or Disneyworld has seen significant inflation on daily costs over the last 10+ years.  Lift ticket and daily admission prices are hard to believe.


I'm surprised some public courses have not introduced "season" prices like Disney and Squaw Valley etc have done.  There is a price level for a course that hits the target of 1) appealing for the player who dreams he or she will play X times over a season and 2) appealing for the course who know that like at a casino, in general the customer will lose $.

[Carl Rogers]

Tom,
I guess you ñeed to build and own a course yourself.

[Jeff Schley]

Good insights from Tom and appreciated to share with us here who are connoisseurs of design. I grew up playing nothing but muni golf until I got our of college. I didn't know anything about design, only appreciated good conditions. Then the 90's and 00's grew the number of new courses to what we now know to an unsustainable level, with some good and some not good designs.

Knowing that any investor or developer is in it as a business and must make a profit, which is a given and inherent to survive. This puts pressure on the consumer as we have inflation (more coming btw) and operating expenses that must be paid for. I feel the key to making golf affordable is municipal golf and I'm not talking about new builds where land must be purchased. There are hundreds of courses owned locally and operated for the citizens where pricing is determined by residency and breaking even (hopefully). As mentioned, even if you aren't local you aren't gouged (a la Torrey Pines), but you pay a nominal premium. Muni's are typically the cheapest and most welcoming facilities in our areas. You can start as a kid, use the range and grow up there. This is where most Americans can afford to play.

I believe the average income in the US is about $51-52k, however the median is significantly lower at around $40k. We know income inequality is a gravely consequential issue and this phenomenon continues to ascend the country into a dangerous disparity. Think about it from that perspective, $150 bucks to play a good course is what is needed now out of my pay? Our UK brethren are laughing at how screwed up that notion is, as they are blessed with a much more affordable model for the working proletariat. Regrettably that model isn't going to be exported anytime soon (let's blame Brexit while we're at it  ).


I don't fault, nor discourage any developer for doing a private course or high end public, etc. It isn't something to lament as golf isn't a zero sum game where it takes away from the public courses. What is needed is to make the public, and I believe muni's specifically, improved while also keeping the price reasonable for those average Americans. Is there an easy way? No, not in the irreconcilable political climate we exist in presently. We can't count on our government to value, much less implement this, for the benefit of the game and recreation of the public.


So what is left are herculean efforts such as the National Links Trust, which I commend wholeheartedly for their "if it is to be it is up to me attitude". They have a congruent mission to what is needed, which is improve/restore the architecture of the muni, create opportunities for all to afford the game, while also creating outlets for the youth and caddies. They aren't relying on millions from public coffers or waiting for politicians to be convinced of their mission, they took matters into their own hands. "There is nothing stronger than the hear of a volunteer", and kudos to the architects (Tom, Gil, Beau & Mike K) for donating their time and talent for this virtuous cause. Many hands make light work.


To me, this is the future of what is needed. Champions of golf not waiting for government to prioritize what they prioritize, or lament private course developments, but putting their efforts towards tangible change within their circle of influence. There is an agency problem for developers making golf affordable, as it is just too expensive to develop a course (as Tom notes above), while we certainly don't expect them to give a subsidy to the public at their own cost. However, municipals have the land now and present a much more realistic synergy to improve what is there already as you have the land. Then getting an operator (which operates the non-profit course, as Troon is doing for NLT) that creates sustainability for the public, not just profit.
I was behind the efforts to improve the Jackson Park / South Shore course in Chicago as that would have added to the muni golf experience for thousands. However, the price tag was so huge for the taxpayer I understand why it hasn't been shepherded through. The NLT model I hope can be implemented in Chicago and other cities around the country which doesn't put the burden on the taxpayer.


I don't think we need more new courses, let's polish the ones that are there and the NLT is piloting what seems to me a viable and benevolent model.

[Sean_A]

Tom

I understand that courses charge what the market will bear. No issue with that. People take risks and if successful are rewarded. I don't like it as a consumer, but I have choices. Luckily I am past the age of wanting to get on my bike and see every shiny new course whose drone footage makes it look wonderful. My issue is the idea of $150 being good value. What percentage of golfers ever pay that for a round more than a handful of times in their life? Sometimes I think these rater operations are completely out of touch with the reality of most golfers. I don't buy into most of the No Laying Up stuff, but their Strapped videos are far more in touch with reality than anything which is produced by a rater crowd.

Ciao

[Craig Sweet]

Old Works in Montana is on the list. Under new management (Course Co.) the course is in the worse shape I have ever seen it.  OW has bled money ever since it was built. Because the season is short, and fewer than 18,000 rounds are played, it simply does not generate the revenue necessary to maintain a "championship" course.  A final settlement with Deer Lodge County means ARCO is now being faded out of the picture.  My guess is the new management company is trying to live within a more realistic budget based on the amount of play...I'm not sure how maintenance and course quality will be sustainable.

[SB]

The challenge for golf courses is that, while inflation has been low, there HAS been some inflation. 


If a mid level course was charging $60 a round in the year 2000, then with annual inflation, that same course needs to charge $100 just to keep from going backwards.  But golfers still think that $60 is the price they should be paying.  Tom said that $150 is unaffordable, but that translates into an $90 course in 2000.  Certainly high at the time, but not crazy high. 


This is why the last 20 years have been so difficult in the golf business.  You have expenses slowly rising, while revenue slowly drops or stays flat due to competition, GolfNow, and golfers thinking that $40 is a reasonable price to pay for a high quality round of golf.  But $40 now would have translated into a $24 green fee in 2000, which was a lot less than a typical municipal course was charging at the time.  Throw in some outsized increases in water costs and equipment costs, and it's a miracle there are any golf courses left.


The course I own is just now beginning to raise rates ($1-3) after 15 years without a price increase (and actually some discounting), and you would think we were engaging in armed robbery based on the feedback, despite the fact that we are investing the course and improving conditions. 

[Tommy Williamsen]

The challenge for golf courses is that, while inflation has been low, there HAS been some inflation. 


If a mid level course was charging $60 a round in the year 2000, then with annual inflation, that same course needs to charge $100 just to keep from going backwards.  But golfers still think that $60 is the price they should be paying.  Tom said that $150 is unaffordable, but that translates into an $90 course in 2000.  Certainly high at the time, but not crazy high. 

There's the rub. Unless I am at a course I really want to to play $150 is a lot. You're right $60 feels like the price I should pay for public golf. Ballyhack almost doubled the price of the accompanied rate. I invite fewer folks as a result. I normally pick up the green fee.

[John Emerson]

Put me down as one who wouldn’t be mad if some courses closed.

[Thomas Dai]

Expectations haven’t half upped over the decades for an essentially pretty simple ball-stick-hole game.
Atb

[John Emerson]

I also think that traditional business structure of clubs is extremely wasteful.  Private clubs really don’t count because if they have the money to pay for 9 GM’s and 24 golf pros, who cares…it’s the clubs money to do as they wish.  BUT, the public clubs trying to find their way have it all wrong.  They think the private club model can work for them as well.  News flash….they are doing wrong. Most cases there is no need for a GM.  There’s 100k+++ in salary right there that could go towards long term bunker renovation or whatever.  Many golf pros and competent superintendents could seamlessly fill those shoes.  Where superintendents are GMs as well, in my experience, the clubs excel and stand out.

[Peter Pallotta]

Tom - thanks for that post: it was detailed and nuanced, and I learned from it.
Best
Peter

[Tom_Doak]

Good insights from Tom and appreciated to share with us here who are connoisseurs of design. I grew up playing nothing but muni golf until I got our of college. I didn't know anything about design, only appreciated good conditions. Then the 90's and 00's grew the number of new courses to what we now know to an unsustainable level, with some good and some not good designs.

Knowing that any investor or developer is in it as a business and must make a profit, which is a given and inherent to survive. This puts pressure on the consumer as we have inflation (more coming btw) and operating expenses that must be paid for. I feel the key to making golf affordable is municipal golf and I'm not talking about new builds where land must be purchased. There are hundreds of courses owned locally and operated for the citizens where pricing is determined by residency and breaking even (hopefully). As mentioned, even if you aren't local you aren't gouged (a la Torrey Pines), but you pay a nominal premium. Muni's are typically the cheapest and most welcoming facilities in our areas. You can start as a kid, use the range and grow up there. This is where most Americans can afford to play.

I believe the average income in the US is about $51-52k, however the median is significantly lower at around $40k. We know income inequality is a gravely consequential issue and this phenomenon continues to ascend the country into a dangerous disparity. Think about it from that perspective, $150 bucks to play a good course is what is needed now out of my pay? Our UK brethren are laughing at how screwed up that notion is, as they are blessed with a much more affordable model for the working proletariat. Regrettably that model isn't going to be exported anytime soon (let's blame Brexit while we're at it  ).


I don't fault, nor discourage any developer for doing a private course or high end public, etc. It isn't something to lament as golf isn't a zero sum game where it takes away from the public courses. What is needed is to make the public, and I believe muni's specifically, improved while also keeping the price reasonable for those average Americans. Is there an easy way? No, not in the irreconcilable political climate we exist in presently. We can't count on our government to value, much less implement this, for the benefit of the game and recreation of the public.


So what is left are herculean efforts such as the National Links Trust, which I commend wholeheartedly for their "if it is to be it is up to me attitude". They have a congruent mission to what is needed, which is improve/restore the architecture of the muni, create opportunities for all to afford the game, while also creating outlets for the youth and caddies. They aren't relying on millions from public coffers or waiting for politicians to be convinced of their mission, they took matters into their own hands. "There is nothing stronger than the hear of a volunteer", and kudos to the architects (Tom, Gil, Beau & Mike K) for donating their time and talent for this virtuous cause. Many hands make light work.

Jeff S:


I am rooting hard for the National Links Trust, which is led by two guys who once worked for me, Will Smith and Mike McCartin.  [Mike's college thesis was all about restoring East Potomac Park.]  But let's maybe wait until they have actually done some of the work in D.C. before declaring them a model for others?  Their model is dependent on raising a lot of funds and also negotiating a lot of red tape, and it is yet to be proven.


Until then, by far the best model I've been involved with for public golf is Common Ground, which we built for the Colorado Golf Association(s).  Their mission statement was to take the $4 million they had saved through years of events and handicap fees, and transform their $40 golf course into the best it could be with that money, WITHOUT RAISING THE PRICE post renovation.  They didn't want to try and compete with other area courses to try to make more money there.*  That's something no capitalist would do, and few communities would have the guts to take on, even if they thought it would benefit the community.


It helped immensely that Common Ground was gifted the golf course, at the closing of the Lowry AFB -- but I feel like there are plenty of other opportunities in America to acquire a suburban golf course on the cheap.  There just aren't many organizations like the CGA that would take it on and only try to break even, because golf is their mission.




* When they interviewed architects for the job, one local designer suggested they needed to double the budget, borrow the rest, and raise the green fee to pay it off quickly.  He was out the door pretty fast!

[Steve Sayre]

Supporting National Links Trust here in DC; affordability a no-compromise objective. Sub $40 green fees always and often lower depending on time/day, specials, the Youth on Course $5 fee, etc.


On the $150 price point, I thought some of these numbers were interesting:


Green Monster seats at Fenway: $225 average
Nosebleed seats ATT Stadium, Cowboys versus Broncos this fall: $246
Average cost of a Lakers ticket 2021: $261 (Skewed up by courtside, etc.)
Daily Lift Ticket Vail resort: $150
And the aforementioned Disney: adult daily pass $109 --159.


I guess these experiences are rare rather than recurring for most people, but are they in any way relevant comparisons for a day's entertainment?

[SB]

I also think that traditional business structure of clubs is extremely wasteful.  Private clubs really don’t count because if they have the money to pay for 9 GM’s and 24 golf pros, who cares…it’s the clubs money to do as they wish.  BUT, the public clubs trying to find their way have it all wrong.  They think the private club model can work for them as well.  News flash….they are doing wrong. Most cases there is no need for a GM.  There’s 100k+++ in salary right there that could go towards long term bunker renovation or whatever.  Many golf pros and competent superintendents could seamlessly fill those shoes.  Where superintendents are GMs as well, in my experience, the clubs excel and stand out.

No doubt, private clubs are a different deal altogether. 


I have looked at the finances of hundreds of public golf courses, and I find that most times there is very little waste.  I see very few public courses paying a GM $100K, and those are usually big operations with big restaurants.  As for eliminating the GM position altogether, some of it can be done, but then you will need to have (and pay for) an IT guy, a F&B manager, an accountant, someone to do marketing, handle Facebook and Yelp and Google reviews, deal with GolfNow or online booking engines, deal with groups, etc.  Those things cannot be done by a superintendent.  Many of those things can be done by a golf pro, but then their business card says "General Manager".  The days of putting cash in a box on the first tee are long behind us.

[Sean_A]

The challenge for golf courses is that, while inflation has been low, there HAS been some inflation. 

If a mid level course was charging $60 a round in the year 2000, then with annual inflation, that same course needs to charge $100 just to keep from going backwards.  But golfers still think that $60 is the price they should be paying.  Tom said that $150 is unaffordable, but that translates into an $90 course in 2000.  Certainly high at the time, but not crazy high. 

This is why the last 20 years have been so difficult in the golf business.  You have expenses slowly rising, while revenue slowly drops or stays flat due to competition, GolfNow, and golfers thinking that $40 is a reasonable price to pay for a high quality round of golf.  But $40 now would have translated into a $24 green fee in 2000, which was a lot less than a typical municipal course was charging at the time.  Throw in some outsized increases in water costs and equipment costs, and it's a miracle there are any golf courses left.

The course I own is just now beginning to raise rates ($1-3) after 15 years without a price increase (and actually some discounting), and you would think we were engaging in armed robbery based on the feedback, despite the fact that we are investing the course and improving conditions.

Now we are in my territory when talking about $24 green fees. I left Michigan in 1998 and we always looked to pay $20 - 30 walking for public golf. Hell no we didn't expect high quality golf, but we did get good golf for that.

Here's the thing, once a list is called good value than one shouldn't expect high quality golf because value is the optimal aspect. I simply don't believe that a list of 100 interesting and good courses at a $50 price point couldn't be identified. The issue isn't the courses, it's the lack of experience with the panel or a disbelief of the magazine that it can sell a list of $50 courses. Either way, it's not good enough.

Ciao

[Duncan Cheslett]

I’m a member of two clubs which both regularly rate highly for  “value for money”. Both also provide high quality golf.


The model for 100 year old member owned courses is entirely different from the model for new builds. Construction costs are irrelevant and the land is generally long paid for. The costs that need to be covered are routine maintenance and renovation projects. Everything else was paid for decades ago.


There is no reason why any long established club NEEDS to charge more than £75 a round. They do it because they can and because it subsides low membership subscriptions.

[mike_malone]

Beechtree was always a good day. Sometimes it was combined with Bulle Rock which wasn’t as good a value and ended with crabs in Havre de Grace.

[Tom_Doak]

Here's the thing, once a list is called good value than one shouldn't expect high quality golf because value is the optimal aspect. I simply don't believe that a list of 100 interesting and good courses at a $50 price point couldn't be identified. The issue isn't the courses, it's the lack of experience with the panel or a disbelief of the magazine that it can sell a list of $50 courses. Either way, it's not good enough.

The bigger golf magazines are funded by upscale advertisers, so most of them have no interest in finding $40 courses.


And, honestly, I don’t think a lot of the panelists would know a good $40 course if they saw it.  The majority of lower-priced golf courses on this ranking are just all the courses the panelists know at that price point that were designed by name-brand architects.  It’s not like they’ve identified a bunch of sleepers we haven’t heard of.

[Joe_Tucholski]

Now we are in my territory when talking about $24 green fees. I left Michigan in 1998 and we always looked to pay $20 - 30 walking for public golf. Hell no we didn't expect high quality golf, but we did get good golf for that.

Sean when you go back to Michigan are you playing the same lower cost places?  As previously mentioned when most folks travel they aren't looking for $40 rounds.  When people are near home they know they price they are looking to pay and usually go to the nearest course that meets that price.


Quality places at the budget level are tough times to get.  My last round was at Common Ground.  I was up at 530 booking the first day times were available to the general public and couldn't get a time until 4pm (that was for a Monday as I couldn't get a Saturday time).  If I was leading the Colorado Golf Association I'd really have a hard time keeping the price as it is given the demand.

[Mike Sweeney]

Here's the thing, once a list is called good value than one shouldn't expect high quality golf because value is the optimal aspect. I simply don't believe that a list of 100 interesting and good courses at a $50 price point couldn't be identified. The issue isn't the courses, it's the lack of experience with the panel or a disbelief of the magazine that it can sell a list of $50 courses. Either way, it's not good enough.

The bigger golf magazines are funded by upscale advertisers, so most of them have no interest in finding $40 courses.


And, honestly, I don’t think a lot of the panelists would know a good $40 course if they saw it.  The majority of lower-priced golf courses on this ranking are just all the courses the panelists know at that price point that were designed by name-brand architects.  It’s not like they’ve identified a bunch of sleepers we haven’t heard of.

Tom.

You need to get out and see a few courses!! 

I have a trip this week to my beloved Maine, and I will be playing Springbrook GC with a fancy Golf Magazine Rater -https://www.angelfire.com/me2/springbrook/. We be paying $32 to play the "National Golf Links of Maine".


I wanted to finally take the plunge and play Belgrade Lakes GC for $160 to knock it off my "Maine Peg Board". I am playing alone as none of my Maine friends would play with me at that rate.


Then there is Mike Young's The Fields GC 70 miles from Atlanta:



And then there are 160+ Military courses that fancy guys like you never visit:

[Brad Lawrence]

There are a lot of courses I’ll play $150 for once.  Almost none I’d pay 150 twice.


As far as people being fooled by price, I could’ve paid eight bucks to play Merion and I would’ve known it was the best course I’ve played by hole five.

[Peter Pallotta]

I appreciate the many measured and well-informed posts.
I suppose what saddens me is not so much the floor (ie the 'affordable' $150 course) as the dizzying heights of the ceilings, ie the now routine $300 and $450 green fees for high quality courses -- almost as routine as the massive & sprawling sites of a thousand+ acres to encompass a mere one or two courses.
And this saddens me not only because those green fees and sites sizes seem excessive, but because they seem proudly and intentionally excessive -- as if what is being honoured & celebrated is the excess itself: the sheer amount of disposable income at hand, and the sheer wastefulness of all that land underfoot.
It is all so very strikingly and profoundly different than the ethos and approach that guided the earliest founders of the game, the Scots and the out-and-back routings of linksland golf.
I'm a romantic at heart, and so something feels deeply amiss when any semblance of spiritual continuity with the past is so thoroughly wiped away, leaving instead only a superficial aesthetic connection in its place.

[Kyle Harris]

After a quick, hardly exhaustive, internet search I am curious if anyone on here knows if some think tank has attempted to determine price points for golf courses as compared to whatever is the local median household income.

A common thread I am seeing in many of these posts is that the race to the bottom in price point rarely works long term.

[Tom_Doak]

And, honestly, I don’t think a lot of the panelists would know a good $40 course if they saw it.  The majority of lower-priced golf courses on this ranking are just all the courses the panelists know at that price point that were designed by name-brand architects.  It’s not like they’ve identified a bunch of sleepers we haven’t heard of.

Tom.

You need to get out and see a few courses!! 

I have a trip this week to my beloved Maine, and I will be playing Springbrook GC with a fancy Golf Magazine Rater -https://www.angelfire.com/me2/springbrook/. We be paying $32 to play the "National Golf Links of Maine".


I wanted to finally take the plunge and play Belgrade Lakes GC for $160 to knock it off my "Maine Peg Board". I am playing alone as none of my Maine friends would play with me at that rate.


Then there is Mike Young's The Fields GC 70 miles from Atlanta:


And then there are 160+ Military courses that fancy guys like you never visit:





Hey Mike:


Actually, I've been to all three of the courses you named, and covered two of them in The Confidential Guide.  [I didn't get to The Fields until after that.]  I was more impressed with Springbrook than with Belgrade Lakes.


As for military courses, the only one I have on my list to see is Eglin AFB, and from looking at their web site I am not sure outsiders are welcome . . . though maybe a letter would work?  I have heard very little about any of the others.