[Tom_Doak]

There was a thread recently about the business model for Ballyneal (and also for Sand Hills and Sutton Bay and Dismal River and The Kingsley Club and Pete Dye Golf Club and others which weren't mentioned) -- the remote golf destinations -- and whether it's viable.  Certainly, there is a limit to how many people might put up $50,000 or more to join such a club, and since these clubs aren't basing their model on local play, they all essentially compete with each other.  I don't profess to know what the limit is but I am pretty sure we can't build 100 more of them.

But, how many other business models out there really make sense anymore?

The people building second-home golf destinations (which have been one of the biggest sources of work for many architects) are sweating bullets right now.

The high-end daily fee golf courses near major cities died out six years ago and haven't made a comeback.

The high-end public facilities (like Chambers Bay) tend to cost so much that, like the remote facilities, they have to hit a home run to succeed.  We'll have to look back in a couple of years and see how the cities of LaQuinta and Indian Wells and Carlsbad have done with their mega-investments.

The truth is that if you like risk/reward golf, you ought to quit playing so much and become a golf course developer.  All of us in the business are thankful for those who play the game, but most of all for those who put up their money to build new courses -- especially the ones who do it because they love the game and want to build something special, and trust that personal success will be followed by at least modest business success.

[Adrian_Stiff]

Tom- Cheap ones will always work I suppose, and clusters of good new ones where groups can holiday and play a few different courses could perhaps succeed. The £50,000 to join in the UK is a buisness model I think will struggle, I think Mr Trump's end result at Aberdeen might have been a godsend.

With our weather this year in the UK most courses are down on their rounds v. 2006. Its getting more competitive and run costs are rising as compliance charges with H & Safety issues are biting into the margins. Many UK golfers played little in May, June and July because it was so wet, when the fees are due I wonder if the drop out numbers will rise.

[Mark_Fine]

Alternative golf in one such model!  We have several exciting opportunities in the works and they won't be 7000+ yard golf courses.  Like any other business, you have to think outside the box.  

Homes will continue to be built.  At one of our projects, the housing development can NOT proceed without the golf course.  The reason being is that the golf course will act as a big filter for effluent water from the homes as well as from other development going on around it.  On its own it would likely lose money but it is invaluable for treating the effluent.  

[brad_miller]

One develpoment group, 3 courses, 3 great but out of the way locations (cheap land, sandy soil and wind) done by 3 different golf designers.

As an example take Cabot Links, Rock Creek and The Dormie Club (something further south might make more sense), membership cost and dues would approximate the same as joining any one of these. (I know the plan is for CL to be public) In this case the model calls for a much larger membership say something the size of PV's. Not easy to pull off but I would join something like this in a NY minute if done by the right developer.

[John Kavanaugh]

The Golf Corpse.  A combination golf course/cemetary was being promoted some time back.

[Rich Goodale]

My opinion, Tom, is that it must be virtually impossible for a high end "destination" golf course to be economically viable unless there is something more to to the destination (both golf wise and culturally) than the associated golf course(s), or the developer eats a lot of his or her investment for reasons of personal satisfcation and/or ego.

If I wanted to build a course I would focus much more on where I built it than the quality of the land.  Something on an OK site near Dornoch or Portrush or Boston is going to be much more financially robust than something on a "world class" site in the middle of nowhere.

[J_ Crisham]

Richard, I disagree with your position. How do you explain the explosion in popularity of Bandon Dunes for instance. It is quite remote 5-6hrs from Portland yet golfers flock here. I brought my wife here(nongolfer). Not much to do here versus a place like Carmel.Yet just walking the courses with me was very enjoyable. Rugged beauty and fabulous architecture. I think golfers will always travel to places like this. Just my thoughts.

[Kyle Harris]

The one with little to no overhead within 2-3 hours of a major metropolitan area.

The coal region of Pennsylvania is very much untapped in this regard.

[Adam Clayman]

I'm still shocked that Rustic Canyon's model has not been followed more.

At Wild Horse, which is a different can of fish due to remoteness, can finally state they are doing well. It took almost a decade and some compromises.

[Ian Andrew]

Tom,

Welcome to the early 1990's. The lead up has been identical so far - from the economics of the time to the excessive building right up to the very end. If this holds true to form - there will be periods without any new courses built in most local regions - and the ones that are built are strictly related to housing. In Toronto we had a period in the 1990’s where there was around a course a year constructed for around five years. It’s about to happen again. Everyone now is rushing to the pockets that are thriving like BC – but that’s just another overbuild under way. Sure, the occasional deep pocketed individual will still build - but there is a reason why all the big firms rushed into Europe - they have almost no domestic work any more.

Last time the shake down removed a lot of the small architects who couldn’t hang on – for example there are 10 people with a golf architect shingle in Toronto alone! Most depend on new construction exclusively – some will disappear without a big change in this cycle. We’ve had some examples of architects and contractors recently joining forces to offer a design build with cost assurances to get a project. That’s how I lost out on a new course recently - people are doing what they must to get work.

As for out of the box thinking - architects will take an active role in building and partially financing smaller budget public courses knowing their skills can bring a profit. They want the work and are willing to assume the risk.

That’s my perspective going forward – hope I’m wrong – but I doubt it.

[kconway]

Tom,

What is the model for the Renaissnace Club?

I was impressed with Archerfield and it seems that there is an advantage to having 2 courses rather 1?

Kelly

[Rich Goodale]

Richard, I disagree with your position. How do you explain the explosion in popularity of Bandon Dunes for instance. It is quite remote 5-6hrs from Portland yet golfers flock here. I brought my wife here(nongolfer). Not much to do here versus a place like Carmel.Yet just walking the courses with me was very enjoyable. Rugged beauty and fabulous architecture. I think golfers will always travel to places like this. Just my thoughts.

Jack

Bandon is a pay-to-play "home run" as Tom mentioned in his original post.  It's very hard to imagine replicating the combination of great land, a visionary owner with deep pockets, great PR--initially for Bandon Dunes, and then Pacific Dunes, and the others, excellent golf courses built on the land by great architects, and the fact that the town of Bandon itself, while a biut down at the heels, is a place to go to if and when you get cabin fever at the resort.  I can't imagine 4 high-end pay-to-play courses being a success in Mullen or Holyoke, nor can I imagine Mike Keiser succeeding if he had tried to sell $50K plus national memberships to fund Bandon.

But, it's all IMHO, of course.

Rich

[Anthony Butler]

The only business model that will enjoy sustained success is the "Top 100 model" either public or private. When you look at the relatively paltry entrance fees charged by places like The Country Club, Myopia and Essex County Club in the Boston area, you shake your head and say how can it be so?

Simply, there is a great deal of demand to say you have played the course (or even better yet say you are about to play the course) this leads to visitor fees and most important huge course leasing fees + catering and entertainment fees that contribute almost straight to the bottom line.

In Australia, where the three courses in the world's Top 100 average a $12,000 entrance fee and $2750 dues, a quick back of the envelope calculation and shows that if the course was not leased for a Corporate Day once a week and they did not take in 10 corporate members a year for $50,000, dues would be closer to $5000 a year and entrance fee would be north of $25,000 a year.

Resorts such as Pebble Beach, Bandon Dunes and Whistling Straights are exempt for the same "Top 100" rule. Every other golf course business model is subject to the viscitudes of the economy and demand and supply.

[Joel_Stewart]

Two answers in the day and age.

9 hole course with range.  The Dunes Club is a perfect example.  Short on land, long on great holes.  Good membership, fun and you can play it quick.

In Nor Cal we have a new course called Dublin Ranch which is a housing community.  18 holes, par 63, 4,820 yards although it doesn't have a range.  Quick and fun to play, good condition.  

[Jeff_Brauer]

Tom,

I like the model used by City of Newton, KS on Sand Creek Station.  They had some leftover land (slotted for dump expansion they would never need) and a developer had some land nearby.  

They merged the property and split costs equitably and built a $35-45 public course within housing that expands the city tax base and image while providing the developer both incentive to build in their town and lot premiums.  It also gave the city a use for its effluent water, produced just a few miles upstream.

I think we might have been smidge better off without the numerous railroad lines bordering the property, as the golf holes doubled as distance buffers from housing to tracks. On the other hand, a few holes "hard by the cinders" gives the course a chance to simulate some of the old Scottish experience.  

Being so close to Prairie Dunes and Cottonwood Hills might yield even a little more outside play if they market the course right. It helps that it found a spot on the GD Best New Affordable list this month, as well as Golf's list last year.

Rideview Ranch in Plano, TX was a similar public/private joint benture that leads the DFW mid market in rounds played.

[Tim Bert]

How about short courses?  Getting the kids engaged is key, and how many of them resent being only to practice on the putting green or hitting a few balls?  When you introduce a kid to football you don't do so my making them practice, practice, practice... OK, well some dads might.  Instead, you send them out in the back yard with the other kids and let them play a game.  Same with the other sports.  Sure, you might play throw and catch or shoot some hoops, but they aren't limited from playing until they are 7 or 8.

Let's get some par 3s out there with some nice design features going.  Let's get the kids on the course early and often, which will help ensure the need for more big courses.

Tom - you are welcome to come to the middle TN area and design a par 3 course.  My kids will appreciate it.

[Kalen Braley]

Tom,

How about the introduction of the UK model into the U.S.  For example, as many have flocked to Bandon to play the courses there, couldn't courses like Ballyneal, Sand Hills, etc and other privates get additional revenues by offering slots open to the public on certain days/time of the week?  While Ballyneal and Sand Hills may not need these additional revenues, as more and more courses are built they could tap into this.

I think this would also work for privates in populated areas as well.  Sure the established top 100 privates wouldn't need to do this, but there are how many thousands of 2nd tier privates that could benefit hugely from this.

[Mark_Fine]

Kyle,
Funny you should mention the coal region.  That is where our one project is that is in part driven by the need to manage effluent water!

Tim,
Short courses is one of the examples that I am talking about as far as alternative golf along with restricted flight balls, it helps with reduced set backs, less length, less real estate, lower costs,.....

[John Kavanaugh]

Tom,

How about the introduction of the UK model into the U.S.  For example, as many have flocked to Bandon to play the courses there, couldn't courses like Ballyneal, Sand Hills, etc and other privates get additional revenues by offering slots open to the public on certain days/time of the week?  While Ballyneal and Sand Hills may not need these additional revenues, as more and more courses are built they could tap into this.

I think this would also work for privates in populated areas as well.  Sure the established top 100 privates wouldn't need to do this, but there are how many thousands of 2nd tier privates that could benefit hugely from this.

Kalen,

What 2nd tier private is truly closed to the public?  I promise you that any foresome from Britain that writes a letter requesting a chance to play at 10 times the member rate will be allowed to play.  The key to the UK model is that we are suckers and overpay.

[Kalen Braley]

Tom,

How about the introduction of the UK model into the U.S.  For example, as many have flocked to Bandon to play the courses there, couldn't courses like Ballyneal, Sand Hills, etc and other privates get additional revenues by offering slots open to the public on certain days/time of the week?  While Ballyneal and Sand Hills may not need these additional revenues, as more and more courses are built they could tap into this.

I think this would also work for privates in populated areas as well.  Sure the established top 100 privates wouldn't need to do this, but there are how many thousands of 2nd tier privates that could benefit hugely from this.

Kalen,

What 2nd tier private is truly closed to the public?  I promise you that any foresome from Britain that writes a letter requesting a chance to play at 10 times the member rate will be allowed to play.  The key to the UK model is that we are suckers and overpay.

John,

So you are saying I need to move to the UK to play a neat 2nd tier private course that is 10 miles from where I currently live?

How about a response that reflects in at least some sort of remote way REALITY.

[Andy Troeger]

Two answers in the day and age.

9 hole course with range.  The Dunes Club is a perfect example.  Short on land, long on great holes.  Good membership, fun and you can play it quick.

How many people that go play The Dunes Club play it because its quick? How many only go around once? Most people I would guess still play at least 18 holes. Also with double-bag caddies its not by any means a quick round, at least when I was there. The fellow that hosted me warned me of that beforehand.

As Rich says also, Bandon is a home-run that IMO would be difficult to replicate again. The quality of the courses is so good that people will go anywhere to play them. It helps there that it can be open year round as well even if the winter weather can leave something to be desired. Could this really be replicated again? If the courses weren't top 100 level it wouldn't work.

[Ken Fry]

Could the "minimalistic" approach used at Erin Hills (as far as the course goes) be put in play that provides thought provoking architecture and land movement but costing 1/4 of what Erin Hills charges to play?

I've never been to Rustic Canyon but Adam did make reference to it earlier in this thread.  Would that be an example of this model?

Ken

[Bill Brightly]

Tom,

I've been thinking about this since another poster described a Ross course outside of Charlotte that is restoring the course, buiding a practice area, and going "golf only" with initiation fees less than half of other area clubs.
 
I wonder if that would work in a highly developed area such as Metro NYC. Let's say there was a non-descript private club (or public) without great architectual lineage. Let's say they were struggling to exist: unable to compete with the "full service" country clubs on the top end, and too expensive for others who play public courses.

What if they fiiled in the pool, blew up the tennis courts, downsized the restaurant to just good pub food, and brought in YOU or C & C to completely build a new course, something completely different, yet a course that would get national acclaim.

What if they made it "golf only" and charged half the initiation/bond that other clubs charge. I think there would be GREAT demand for it among younger guys who can't swing joining a club yet, junior members at ODG clubs who are sweating out what to do when they have to come up with the BIG check, and golf nuts who can afford to write two checks.

I think it would have to be an existing club, because the cost of land acquisition would be too high to make the economics work if you had to buy the land.

Does this make sense?

[Ulrich Mayring]

Business models of the future that can be successful on a smaller scale:

• The One-Man Show. Architect = developer = builder = manager, this guy knows how to do it right.
• The affordable and fun public course with two sets of tees and a "good enough" attitude towards maintenance.
• Respectable neighborhood pitch & putt and short course. This is uncharted territory for golf architects, it would be easy to blow the competition out of the water.
• Combined private/public course. Membership is affordable, green fees slightly more expensive, everyone has the same chance of securing a tee-time. This is actually the most successful model here in Germany. The members cover the base costs, the green fee paying guests provide the profits.

So there, this should get us started

Ulrich

[Mark Chaplin]

John and Kalen,

The average UK guest rae is around £40/$80 - 10 years ago it would have been $60 but that's not our fault!

Our truly world class venues TOC, Muirfield, Sunningdale, Birkdale, etc charge around $250-400 and they are accessible to all. The world class US venues that allow public play Pinehurst & PB I believe are nearer $400-500. I would imagine Sawgrass, harbour Town Doral & Kiawah Island are similar amounts? Is Bethpage the only world class venue that is accessible and reasonably priced?

Probably around 50 clubs in the UK and Northern Ireland have a sizable income from foreign visitors that's around 2% of our clubs, so Mr K who I believe is still yet to visit our shores is a little off the mark when he thinks high paying overseas guests prop up the British golf club model.

Chappers

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