Hosting Major Golf Events – Is it Worth it?

Recently, Adam Schupak penned a most informative piece for Links Magazine on the cost of hosting a USGA event.  What occurred to me was the question of whether it’s a good investment or not.  Does the notoriety gained by hosting a USGA, PGA Tour (including and Champions) and LPGA events provide a return on the investment to the host club?

Of course, this can be measured in many different ways.  To the for-profit club or resort, if hosting an event can be converted into higher fees or additional members or play, the hosting might be worth the investment.  If the club is a non-profit, the considerations focus more on club reputation and prestige and doing their part for the good of the game.  Some not-for-profit clubs seek to host events for the notoriety and potential shot in the arm to membership development.  What is the cost?

In order to host a major event (not just one of the 4 major championships), there is the control given to the event for golf course maintenance and setup leading to the event.  Along with that comes the loss of use to members and patrons for 2-3 weeks at the very least and the revenue that goes with that use.  At private clubs, members often volunteer for a variety of tasks, including player transportation, weather preparedness, scoring, statistics and a variety of other functions.  Not only do the members lose their golf course but they often forego work to make the event happen for the club.  Hosting a major event is a big commitment for the club, and there are often residual repairs required from turf damaged by vehicles, the placement of hospitality and merchandise tents and the wear caused by thousands of spectators and increased cart traffic.  Thus, the true cost of an event includes lost revenues, increased labor, residual damage and the potential loss of use by volunteers needing to catch up for lost time at work in the weeks following the event.

From our perspective at Golf Property Analysts, the ultimate question is the impact of the event on the value of the club economically.  A “snapshot” economic impact of hosting an event (direct costs offset by direct revenues) would not necessarily impact the value of the property, but could enhance its going concern value.  If, however any notoriety gained translates into long term benefits after the event, the value would be enhanced by the likely increase in play, rates or membership.  Some clubs annually host events and others regularly host traveling events like those sponsored by the USGA.

When clubs lose money on events (which is the case in most instances), the question of whether it’s worth it or not can only be answered by the members/owners.  Is any payback fast enough and substantial enough to cover the loss?  If not, is the presumed added prestige worth the cost of obtaining same?  The answers will be different depending on the club’s goals.  At a member-owned private club, the answers will be different from member to member.  There’s no one right answer.  To determine that requires first establishing priorities.