As a real estate professional dedicated to understanding value in golf course and club properties, one thing I’ve observed over 50 years in the real estate industry and 35+ years in golf is an under-utilization of real estate assets. As I did a few weeks back with the ski industry, (we do appraisals of mountain resorts as well) it’s often interesting to compare with and learn from other industries how to add value to our businesses and properties. What wasn’t addressed in that article is how some mountain resorts have discovered alternative uses that have expanded their opportunities during both the ski season and the “off”-season.
Many mountain resorts we’ve observed, limited by 100+/- day ski seasons have found a variety of ways to generate revenues during the rest of the year that have enhanced the value of their real estate assets and businesses. We recently had occasion to visit one mountain resort that has successfully identified several ways to broaden their reach and expand the use of their property to grow their business and add value. What can golf courses and clubs learn from this?
First, let’s look at what we’ve observed as alternative uses at mountain resorts. These include:
- Water Parks
- Zip Lines
- Hiking Trails
- Mountain Biking
- Concert Venues
- Weddings/Events
- Festivals (wine, beer, food)
Obviously, not all these activities are compatible with golf courses and clubs, but they do raise the question of what activities, that could use the golf or club property, land or buildings, during the off season or at night, and wouldn’t disrupt the golf operations. Are there additional revenue opportunities or member amenities to be realized?
As established in the earlier article linked above, golf courses are not efficient uses of real estate, with maximum usage limited by available tee times, whereas mountain resorts have considerably more flexibility relating to skiing activities and do a better job of serving more people. Like mountain resorts, golf courses use a considerable amount of land (often 150+ acres or more) and have buildings that are sometimes under-utilized (clubhouse, banquet facility, maintenance, cart storage, etc.).
Many golf courses, especially in colder climates are closed entirely for 3-5 months, while others stay open, only to see precipitous declines in not only golf activities but also food & beverage sales and other activities. Many private clubs (not too many daily-fee courses) offer activities like fitness rooms, paddle tennis and indoor golf simulators to spur activities in the colder months.
So, how can golf courses and clubs expand the use of their properties beyond the existing traditional uses to add revenues? Below are some suggestions, including some we’ve seen:
- Drive-In Movies (Practice Range)
- Dog Races
- Night Golf
- Concerts
- Retail Space (Convenience)
- Rental Office Space
- Landscaping Contractors
- Small Trade Shows and Conferences
- Winter sports (cross-country skiing, sledding, etc.)
- Disc Golf
- Solar Electricity Fields
- Camp Programs
- “Short” courses
- Putting courses
Of course, every property has different characteristics, available excess land and opportunities and I’m sure this isn’t a comprehensive list but hopefully it provides food for thought on how to use golf courses and clubs more efficiently, produce more revenue and provide more amenities. The dynamics between private clubs and daily-fee facilities will vary and goals and objectives between member-owned, investor-owned or municipal facilities will dictate which alternatives may be desirable. Some of the mountain resorts we’ve observed have become four-season entertainment and recreational venues that cater to the whole family.
The economics of each and every specific property and amenity package will be different, but given the challenges ahead for golf with expanding the game’s culture, dealing with environmental issues and water availability/usage/cost, making more efficient use of our real estate assets would seem to make sense. As always your thoughts are welcome at Larry@golfprop.com.