Adam,
Although I will be classified as a GCA "Newbie" to the left of this post
, I recall running some similar math in a post earlier this year on this subject.....
Basically, if your revenues are $1.5 (about typical for a public course at moderate fees) this goes to (in order)
1) Course Maintenance ($500-800K),
2) Pro Shop/Cart Operations/Cost of Sales - F and B, Merchandise ($200-400K),
3) Debt Service ($400-640K, based on about $80/$1,000,000 annually and construction costs of $6-8 Million for the entire facility, and
4 (hopefully) profits, at a rate of 10-20%, depending on who spent the money! If a management comany has spent the money, they may also have to send a certain percentage to the home office, which they would claim is offset in national purchasing power and/or reduced manintenance/operations cost.
Total it up, and annual operations costs are $1.1/$1.3 M at the low end, and $1.8/$2.2 on the high end, with and without profit included. To paraphrase your comment, "Why build it without a profit?"
At $30,000 rounds, revenue must be $43-$73 per golfer. You get some help from average 60% cart rentals at $10/golfer,(average revenue $6 per round), F and B (national average $4-15/round) , range balls (national average $1-2/round) and merchandise sales,( really varies depending on golf experience and logo) of $3-10 per round. Thus, of the total revenue generated, you can expect about $14-53 per round in auxillary sales, which means the greens fee can be lower than the $43-73 per round, usually $30-43.
If you are doing the math
, I calculated the $43/30 using all the low figures and $73/43 using all the high ones. Of course, most courses are somewhere in between. The mathmatically astute among us will easily see that the per round figures drop 25% (or is that 33%?) if the course is of such quality that it produces $40,000 or more rounds! Building a course right now, at historically low interest rates has an obvious positive effect. And as Lou Duran mentioned on another post, buying one of the courses for sale right now at $.25-50 on the dollar will also make these courses pencil much, much better!
BTW, as courses are coming on line and not experiencing as much play as they expected, I am hearing of some nasty lawsuits against companies that produce feasibility studies estimating revenue. I should probably put a huge disclaimer in above that no one should build a golf course based on my post!
It is hard (on typical sites) to produce a $73 golf course for a low budget. Even when I do, it's the ambiance features (not important to this group, but it is to corporate outings, etc. that may pay $75 per head. For that you need higher maintenance, nicer clubhouse, etc. Clubhourses usually tend to be real money losers.
Cheers