A question about greens fees these days

[Matt_Cohn]

These courses with greens fees at $400, $500, and above—are they just raking in massive amounts of money, or is it actually that expensive to maintain a golf course at the expected level these days?


I know about supply and demand and that greens fees aren't simply reflective of maintenance costs. I also realize that for many of these places, the courses themselves don't have to make a ton of money because they drive spending on hotel, restaurant, merchandise, etc.


But I'm just curious how it works out for places like PGA West (up to $490/round in high season), Troon North (up to $409/round), Doral (up to $730/round for the blue and $250+ for the other courses), etc.

[Tim_Weiman]

Matt,


It would be great if some superintendents would chime in on this subject.


Anyway, without citing the exact details, a couple years ago I was really surprised to hear how much Ballybunion was spending on course maintenance. I think if one went back to the 1980s, the amount of money being spent was much less and back then I don’t recall feeling anything was lacking. Things were just fine, IMO.


Tim

[Matt Schoolfield]

I know about supply and demand and that greens fees aren't simply reflective of maintenance costs. I also realize that for many of these places, the courses themselves don't have to make a ton of money because they drive spending on hotel, restaurant, merchandise, etc.

I think financing costs are likely a big part of it for new clubs. I know that collateralized development loans are still at 8-ish% borrowing rates. That's going to be non-trivially reflected in the green fees by necessity, which basically sets a price floor for comparables.

[Rob Marshall]

These courses with greens fees at $400, $500, and above—are they just raking in massive amounts of money, or is it actually that expensive to maintain a golf course at the expected level these days?


I know about supply and demand and that greens fees aren't simply reflective of maintenance costs. I also realize that for many of these places, the courses themselves don't have to make a ton of money because they drive spending on hotel, restaurant, merchandise, etc.


But I'm just curious how it works out for places like PGA West (up to $490/round in high season), Troon North (up to $409/round), Doral (up to $730/round for the blue and $250+ for the other courses), etc.

Matt
Down here in Naples, Lely has one private course and two semi private sister courses. They are charging over $300 a round for the semi privates and you can get a tee time anytime you want. I don't get it. At $200 they would be full. I've got a two year wait to get into the club I'm joining so we drive 50 minutes to Ave Maria to play there and pay now $150 to $200. Much cheaper in the off season.

[Thomas Dai]

Worth considering is how the desire for greater conditioning of golf courses has contributed to the cost of operating a golf course, costs that have to be recovered. Cha ching higher subs and greenfees.
And how the modern era golf ball goes so damn far that money has been spent extending courses and then having to maintain the extra land involved
Plus amongst other factors there could well also be an element Veblen pricing.
Atb

[Tom_Doak]

It would be great if some superintendents would chime in on this subject.

Yes, it would, but I bet we don't hear much.  Many superintendents are happy to spend the $$$.  And if you ask them if they couldn't do with a bit less, they just point at the clubhouse, and say that's where the money is wasted.

[Tom_Doak]

I think financing costs are likely a big part of it for new clubs. I know that collateralized development loans are still at 8-ish% borrowing rates. That's going to be non-trivially reflected in the green fees by necessity, which basically sets a price floor for comparables.

I don't know who is financing their maintenance costs, but that is the first sign of impending bankruptcy.


The problem at a lot of clubs is that they aren't doing that many rounds at the posted rate.  The rule of thumb in the golf business used to be that the AVERAGE green fee collected was about 66% of the POSTED top rate, and I doubt that's changed much.  At St. Patrick's it is even less than that, for now.  But the maintenance costs at St. Patrick's are 20-30% that of an American club.

[Matt Schoolfield]

I don't know who is financing their maintenance costs, but that is the first sign of impending bankruptcy.

Sorry, I meant financing and/or amortizing the overall development costs.

[Tom_Doak]

I don't know who is financing their maintenance costs, but that is the first sign of impending bankruptcy.

Sorry, I meant financing and/or amortizing the overall development costs.

I don't think that happens much, either.  Borrowing at 8% to build a golf course would be suicide in most situations, and banks know that!  They might do a loan for the last 25-35% of the development cost if it's agreed everyone else is wiped out and they take over in a bankruptcy.


For the most part, golf courses nowadays are financed with private money.  That is one main reason there aren't so many of them being built!

[Matt Schoolfield]

I don't know who is financing their maintenance costs, but that is the first sign of impending bankruptcy.

Sorry, I meant financing and/or amortizing the overall development costs.

I don't think that happens much, either.  Borrowing at 8% to build a golf course would be suicide in most situations, and banks know that!  They might do a loan for the last 25-35% of the development cost if it's agreed everyone else is wiped out and they take over in a bankruptcy.


For the most part, golf courses nowadays are financed with private money.  That is one main reason there aren't so many of them being built!

Interesting... good to know.

[Charlie Goerges]

I think we need to accept that the price of our golf is determined by things other than maintenance costs. I often justified my desire for more rustic conditions with the fact it could cost us less, I don’t think that’s true anymore. I still want more rustic conditions, but there are now other reasons. Environmental, for one. But also, those conditions make the game easier for me. Drier turf gives me more bounce and run, higher HOC gives me more cushion under the ball.

[Tom_Doak]

I think we need to accept that the price of our golf is determined by things other than maintenance costs. I often justified my desire for more rustic conditions with the fact it could cost us less, I don’t think that’s true anymore. I still want more rustic conditions, but there are now other reasons. Environmental, for one. But also, those conditions make the game easier for me. Drier turf gives me more bounce and run, higher HOC gives me more cushion under the ball.

Price, actually, is a function of demand [and perceived quality], which is why this topic is generally silly. 


As long as there are enough people willing to pay a high rate, that's what the rate is going to be.  As soon as there aren't enough people willing to pay, the rate will go down, and then it will be up to the golf course to decide if they can afford the level of maintenance they've been supporting.  It doesn't work the other way around . . . just because you spend a lot on maintenance doesn't mean golfers will pay whatever price you say.


The difference between now and fifty years ago is the profit motive.  Back in the day, courses used to be run by non-profit golf clubs that were trying to keep prices down.  Nowadays, even most of those clubs have a profit motive, and those that don't just charge the market price and put the proceeds into "improving" irrigation systems, doing big restorations, hiring more staff, and paying the managers a lot more.


P.S.  The only course I have built which does not operate by this system is CommonGround.  They are truly a non-profit and their goal is to keep the green fees low for Colorado Golf Association members.  As part of that mission, they have never re-built the clubhouse they planned, 16 years into their reopening.

[Mike Wagner]

I know about supply and demand and that greens fees aren't simply reflective of maintenance costs. I also realize that for many of these places, the courses themselves don't have to make a ton of money because they drive spending on hotel, restaurant, merchandise, etc.

I think financing costs are likely a big part of it for new clubs. I know that collateralized development loans are still at 8-ish% borrowing rates. That's going to be non-trivially reflected in the green fees by necessity, which basically sets a price floor for comparables.

Matt -


You'd be hard pressed to find a lending institution in the last few years that will touch a golf course. There are circumstances that can make it happen, but in general, they won't touch it.


It's been an incredible 4 year run for golf .. unprecedented. High green fees are a result of demand. Conditions followed. If they're not making $ now, they never will. It's a tough business. If I owned a golf course, I would have been a seller last year (probably early '23 actually

[Tim Martin]

I know about supply and demand and that greens fees aren't simply reflective of maintenance costs. I also realize that for many of these places, the courses themselves don't have to make a ton of money because they drive spending on hotel, restaurant, merchandise, etc.

I think financing costs are likely a big part of it for new clubs. I know that collateralized development loans are still at 8-ish% borrowing rates. That's going to be non-trivially reflected in the green fees by necessity, which basically sets a price floor for comparables.

Matt -


You'd be hard pressed to find a lending institution in the last few years that will touch a golf course. There are circumstances that can make it happen, but in general, they won't touch it.


It's been an incredible 4 year run for golf .. unprecedented. High green fees are a result of demand. Conditions followed. If they're not making $ now, they never will. It's a tough business. If I owned a golf course, I would have been a seller last year (probably early '23 actually

Mike-Are all the projects being funded by private money? There have to be some lenders that are providing financing.

[Kalen Braley]

As Tom alluded to it seems like fairly straight forward math:

Say you have 150 time slots in a given day that you can fill with a $100 green fee.  But if you increase the green fee to $200 only half are bought, 75. You'd still end up with the same daily revenue: 150 X $100 = 75 X $200 = $15,000

However the latter scenario results in half as much on course traffic (and theoretically half as much "damage") as well as you could space the tee times out and avoid waiting/congestion.

If you were a course operator which scenario would you prefer?

[Anthony_Nysse]

It would be great if some superintendents would chime in on this subject.

Yes, it would, but I bet we don't hear much.  Many superintendents are happy to spend the $$$.  And if you ask them if they couldn't do with a bit less, they just point at the clubhouse, and say that's where the money is wasted.

Its interesting that many think the entire green fee goes directly to the maintenance of the golf course....

[Charlie Goerges]

I think we need to accept that the price of our golf is determined by things other than maintenance costs. I often justified my desire for more rustic conditions with the fact it could cost us less, I don’t think that’s true anymore. I still want more rustic conditions, but there are now other reasons. Environmental, for one. But also, those conditions make the game easier for me. Drier turf gives me more bounce and run, higher HOC gives me more cushion under the ball.

Price, actually, is a function of demand [and perceived quality], which is why this topic is generally silly. 


As long as there are enough people willing to pay a high rate, that's what the rate is going to be.  As soon as there aren't enough people willing to pay, the rate will go down, and then it will be up to the golf course to decide if they can afford the level of maintenance they've been supporting.  It doesn't work the other way around . . . just because you spend a lot on maintenance doesn't mean golfers will pay whatever price you say.


The difference between now and fifty years ago is the profit motive.  Back in the day, courses used to be run by non-profit golf clubs that were trying to keep prices down.  Nowadays, even most of those clubs have a profit motive, and those that don't just charge the market price and put the proceeds into "improving" irrigation systems, doing big restorations, hiring more staff, and paying the managers a lot more.


P.S.  The only course I have built which does not operate by this system is CommonGround.  They are truly a non-profit and their goal is to keep the green fees low for Colorado Golf Association members.  As part of that mission, they have never re-built the clubhouse they planned, 16 years into their reopening.

It took me a longer than I'd like to admit to believe you on this, but it was more wishful thinking than anything else on my part.

[Mike Wagner]

I know about supply and demand and that greens fees aren't simply reflective of maintenance costs. I also realize that for many of these places, the courses themselves don't have to make a ton of money because they drive spending on hotel, restaurant, merchandise, etc.

I think financing costs are likely a big part of it for new clubs. I know that collateralized development loans are still at 8-ish% borrowing rates. That's going to be non-trivially reflected in the green fees by necessity, which basically sets a price floor for comparables.

Matt -


You'd be hard pressed to find a lending institution in the last few years that will touch a golf course. There are circumstances that can make it happen, but in general, they won't touch it.


It's been an incredible 4 year run for golf .. unprecedented. High green fees are a result of demand. Conditions followed. If they're not making $ now, they never will. It's a tough business. If I owned a golf course, I would have been a seller last year (probably early '23 actually

Mike-Are all the projects being funded by private money? There have to be some lenders that are providing financing.

Tim -


Every situation is going to be different and it depends. For the most part, institutional lenders won't touch golf. You might get them to look at a fully functioning course with history for repairs / upgrades .. and even then, the process is grueling. The majority are with private equity and / or debt. If they do happen to get some portion of bank debt, it's going to be EXTREMELY low LTV and most likely in a location that could ultimately be something other than a golf course (if they have to take it back).

[Tim Martin]

I know about supply and demand and that greens fees aren't simply reflective of maintenance costs. I also realize that for many of these places, the courses themselves don't have to make a ton of money because they drive spending on hotel, restaurant, merchandise, etc.

I think financing costs are likely a big part of it for new clubs. I know that collateralized development loans are still at 8-ish% borrowing rates. That's going to be non-trivially reflected in the green fees by necessity, which basically sets a price floor for comparables.

Matt -


You'd be hard pressed to find a lending institution in the last few years that will touch a golf course. There are circumstances that can make it happen, but in general, they won't touch it.


It's been an incredible 4 year run for golf .. unprecedented. High green fees are a result of demand. Conditions followed. If they're not making $ now, they never will. It's a tough business. If I owned a golf course, I would have been a seller last year (probably early '23 actually

Mike-Are all the projects being funded by private money? There have to be some lenders that are providing financing.

Tim -


Every situation is going to be different and it depends. For the most part, institutional lenders won't touch golf. You might get them to look at a fully functioning course with history for repairs / upgrades .. and even then, the process is grueling. The majority are with private equity and / or debt. If they do happen to get some portion of bank debt, it's going to be EXTREMELY low LTV and most likely in a location that could ultimately be something other than a golf course (if they have to take it back).

Mike-Thanks for clarifying.

[Padraig Dooley]

There is one other factor too, many travelling on golf packages don't know the individual cost of courses and when some don't know what they are paying it's easier to charge inflated prices and get them.

[DFarron]

Tom Doak hit the nail on the head...it's all supply and demand and how people want to spend their money.


For me it has gone crazy and is not worth it, the only course for me that's worth the high bucks is Pebble, I'd gladly play there for the going fee.


I'm wondering if the market isn't beginning to soften, privates in my area are coming down in initiation fees and in some cases there is no wait to join which wasn't the case when I moved here 4 years ago.

[Mike Nuzzo]

According to Golf Course Industrie's survey of superintendents the average non-capital maintenance budget has increased from $622k in 2013 to $1.34M in 2025. That is outpacing inflation significantly - my math is 60% above an inflation-adjusted amount.
Peace

[Matt Schoolfield]

According to Golf Course Industrie's survey of superintendents the average non-capital maintenance budget has increased from $622k in 2013 to $1.34M in 2025. That is outpacing inflation significantly - my math is 60% above an inflation-adjusted amount.
Peace

It's important, though, that people remember that many items "outpacing inflation" are often the ones that are creating the inflation. I'm not in the golf maintenance industry, but I follow the finance news, and the obvious item that sticks out is something like fertilizer. The cost of fertilizer has been wild in the last five years, and remains twice the price that it was in 2019, which is down from the after spiking to 440% increase from 2022. This is largely the result of the invasion of Ukraine, and the sanctions against Russian nat gas, and the subsequent US exports to Northern Europe.

[Chris Hughes]

I know about supply and demand and that greens fees aren't simply reflective of maintenance costs. I also realize that for many of these places, the courses themselves don't have to make a ton of money because they drive spending on hotel, restaurant, merchandise, etc.

I think financing costs are likely a big part of it for new clubs. I know that collateralized development loans are still at 8-ish% borrowing rates. That's going to be non-trivially reflected in the green fees by necessity, which basically sets a price floor for comparables.

Matt -


You'd be hard pressed to find a lending institution in the last few years that will touch a golf course. There are circumstances that can make it happen, but in general, they won't touch it.


It's been an incredible 4 year run for golf .. unprecedented. High green fees are a result of demand. Conditions followed. If they're not making $ now, they never will. It's a tough business. If I owned a golf course, I would have been a seller last year (probably early '23 actually

But they'll lend on a big ol' new clubhouse project in a heartbeat!! 

[jeffwarne]

As Tom alluded to it seems like fairly straight forward math:

Say you have 150 time slots in a given day that you can fill with a $100 green fee.  But if you increase the green fee to $200 only half are bought, 75. You'd still end up with the same daily revenue: 150 X $100 = 75 X $200 = $15,000

However the latter scenario results in half as much on course traffic (and theoretically half as much "damage") as well as you could space the tee times out and avoid waiting/congestion.

If you were a course operator which scenario would you prefer?

However, 1/2 the traffic is half the pro shop sales, 1/2 the food and BEVERAGE sales.
There are players that spend more on booze than green fees(easier to do when beers are $8)
Lots of revenue sources.
 that depend on high traffic.


As far as the original premise, maintenance is only one of many factors in covering costs.
The price of a new build, clubhouse, infrastructure, interest etc. can be substantial.
The numbers are very hard to make work unless one is the third owner paying pennies on the dollar for the course, infrastructure etc.
Here's hoping it's still possible.