Course revenues and rounds per year

[NGulhar]

for a school project

For my latest MBA project I am researching the revenues and costs associated with a public course. Does anyone have any idea what revenues are for A Market courses (ie. Arizona, Myrtle Beach, Orlando, San Diego), or perhaps the number of rounds per year. ANY KIND of insight would be well appreciated.

Thanks in advance and happy golfing!

[DemolitionMan]

Here are a couple for you.

 

Harding Park - San Francisco, site of the 2006 AMEX Championship, winner - Tiger Woods. Figures include the short 9 hole Fleming course.

 

FY 2005-06 FY

Rounds played Harding 60,464

Rounds Played Fleming 41,502

Total Rounds 101,966

 

REVENUES

Green Fees - Harding $3,419,325

Green Fees - Fleming $721,093

Total Green Fee Revenue $4,140,418

 

Cart Fees - Harding $222,195

Cart Fees - Fleming $19,311

Food & Beverage $737,743

Pro Shop $423,053

Range $270,762

G&A $150,671

Total Concession $1,823,735

 

Total Revenue $5,964,153

 

EXPENSES

Salaries $1,618,710

Fringes $433,517

Overhead $618,009

Professional & Special Serv. $2,890,610

Rent/Leases Equipment $284,024

Other Expenses $4,404

Materials & Supplies $203,782

Services of other Dept. $23,407

Capital Reserve $251,364

Debt payment $935,420

 

Expenditure Total $7,263,247

 

 

San Diego operates two other courses in addition to Torrey Pines (TP makes a lot of money, the other two courses lose money).

 

Rounds played 359,626 (Torrey North 91,394...South 64,589)

Gross Revenues $12,962,791

Total Expenses $8,232,333

Net Revenue $4,730,458

 

New York operates 12 courses including Bethpage Black (33,000 rounds per year).

 

Rounds played 600,000

Gross Revenues $6,230,000

Total Expense Negligible (reason being is that the courses are managed by an outside agency which absorbs all costs in exchange for a fee. Essentially, NY gets license fees for the 12 courses that nets them about $6M per year.

 

 

Hope that helps.

 

;-)

[DemolitionMan]

Another couple of pieces of information that might help you is how a course has an average revenue per round and how a course calculates the cost of production or cost per round of golf.

 

A golf course will typically have many different rates. Harding Park for example is: Standard, Standard-O/S, Aerate, Bay Area 9 County, Bay Area 9 County-O/S, Aerate, Resident, Senior, Junior, Tournament, Tournament-O/S Aerate, Club. So the 42,000+ rounds played are not a revenue of 42,000 x $85 or whatever a standard rate is....the average rate actually works out to more like $50 per round not counting cart and food revenue. So when you are estimating revenues, be sure to include all the discounted rounds.

 

The cost of production is a per round breakdown of all the above expenses...for example:

Salaries $12.70

Fringes $3.20

Overhead $3.23

Professional & Special Serv. $17.70

Rent/Leases Equipment $2.43

Workorders $0.04

Other Expenses $0.01

Materials & Supplies $1.76

Services of other Dept. $0.13

Facilities Maintenance $1.32

Capital Reserve $2.47

Debt $2.82

 

Total cost per round $47.81 or something like that. So at first glance, you make a healthy profit on standard rates, and possibly lose money on twilight tee times.

[Mikolar]

I came upon this thread and your information was quite good.....was this public or were you in a position to know line item breakdowns at different courses?

 

I would be interested in hearing thoughts on the range of maintenance expenses for golf courses, from a public running high rounds to a nice low-round club. I know its hard to offer 'typical' examples based on climate, basic course makeup and desired levels of conditioning, but I would be interested in hearing operational/labor costs associated with maintaining better courses. I would also be curious about costs associated with those courses that choose to overseed the entire course (well, including fairways) as opposed to just tees and greens.

Thanks in advance.

[SheriffBooth]

I'm on the Board at my club and responsible for Greens & Grounds. We had around 21k rounds last year, which was low, and a maintenance budget expenditure of between $750k and $800k, which is also low.

 

For a single course, semi-private club, I think good targets would 35,000 rounds and a $1M to $1.5M grounds budget. This will give you pretty regular play and revenue without overwhelming the course, and that budget will allow you to fully maintain all playing surfaces and give you an extra $500k or so other projects annually.

[DemolitionMan]

I came upon this thread and your information was quite good.....was this public or were you in a position to know line item breakdowns at different courses?

 

I would be interested in hearing thoughts on the range of maintenance expenses for golf courses, from a public running high rounds to a nice low-round club. I know its hard to offer 'typical' examples based on climate, basic course makeup and desired levels of conditioning, but I would be interested in hearing operational/labor costs associated with maintaining better courses. I would also be curious about costs associated with those courses that choose to overseed the entire course (well, including fairways) as opposed to just tees and greens.

Thanks in advance.

 

The information for a course owned by a municipality is public, however the bureaucracy one must go through to get details is probably not a lot of fun. I happen to have the info above because of another project I am getting involved in.

 

The post above regarding maintenance is fairly representative however I do not know of any course that sets aside $500,000 for capital improvements on an annual basis. Not to say it can't happen, but it would be extremely rare. Not even some of the most exclusive clubs in California do that. If a private club feels the need for an expensive capital improvement (new clubhouse) the board votes to assess the members and pay for it on an as needed basis. A muni course operated by an outside agency usually has some sort of requirement in the lease to set aside a percentage of revenues for capital improvements and a requirement to spend a certain dollar amount during a certain time period. It would not be unusual to see a requirement of 2% per month of gross set aside for improvements.

 

You can expect a course that is open year round, gets over 60,000 rounds of play and is kept in pretty good shape is going to need a budget of $800,000 - $1.2M depending on various challenges. Labor would account for a little over half of your maintenance budget. This does not include major projects like all new cart paths or a new maintenance facility, etc....

[Mikolar]

thanks again....I too sit on the board of an equity club and we'll average just under 30,000 rounds a year. The club is a mid level club in the market and has been in wonderfully great shape over the past four or five years....great greenskeeper and general membership.

That being said, we're in a competitive market and our annual maintenance budget is $850,00 with another $65 set aside for capital items. Low, we know but again that has been done without an assessment the past few years. Those numbers also do not count water, which we have had to purchase on occasion in the summer -- our three wells pull from an aquifer with water that has to be diluted at times.

[SheriffBooth]

thanks again....I too sit on the board of an equity club and we'll average just under 30,000 rounds a year. The club is a mid level club in the market and has been in wonderfully great shape over the past four or five years....great greenskeeper and general membership.

That being said, we're in a competitive market and our annual maintenance budget is $850,00 with another $65 set aside for capital items. Low, we know but again that has been done without an assessment the past few years. Those numbers also do not count water, which we have had to purchase on occasion in the summer -- our three wells pull from an aquifer with water that has to be diluted at times.

 

Yup, that 750-850 number is what's bare minimum to maintain a course. Much less than that and you start shorting on things like fertilizer and pesticide.

 

The extra $500k I was talking about was to improve the course on an annual basis. Things like bunker rehabs, or tee construction, landscaping, etc. Things that could be considered as part of a capital improvement but could also be viewed as routine and necessary course maintenance and beautification. Our current groundskeeper came to us from a Nicklaus Signature course with an annual maintenance budget in the $2M range and a staff of 30+ men. Here, we've got a staff of about 5 year round maintenance workers.

[DemolitionMan]

thanks again....I too sit on the board of an equity club and we'll average just under 30,000 rounds a year. The club is a mid level club in the market and has been in wonderfully great shape over the past four or five years....great greenskeeper and general membership.

That being said, we're in a competitive market and our annual maintenance budget is $850,00 with another $65 set aside for capital items. Low, we know but again that has been done without an assessment the past few years. Those numbers also do not count water, which we have had to purchase on occasion in the summer -- our three wells pull from an aquifer with water that has to be diluted at times.

 

Yup, that 750-850 number is what's bare minimum to maintain a course. Much less than that and you start shorting on things like fertilizer and pesticide.

 

The extra $500k I was talking about was to improve the course on an annual basis. Things like bunker rehabs, or tee construction, landscaping, etc. Things that could be considered as part of a capital improvement but could also be viewed as routine and necessary course maintenance and beautification. Our current groundskeeper came to us from a Nicklaus Signature course with an annual maintenance budget in the $2M range and a staff of 30+ men. Here, we've got a staff of about 5 year round maintenance workers.

 

Big difference between CCs an Munis.

[NGulhar]

WOw this is great information. The interesting thing I've learned over the past few days doing research is that a staggering percentage of courses are losing money. Of course their land may be appreciating, and perhaps they made money on real estate deals involving homes, but for the most part, their normal operations are usually resulting a net loss.

 

What gives?