When most people think about how much it costs to play golf, they consider green fees, membership dues and other costs of playing the game. Few, if any golfers ever think about how much it costs the golf course or club to produce the round(s) of golf one might play.
I decided to explore our database and examine what golf courses and clubs spend to provide a round of golf to their members and customers. Our first focus will be on golf course maintenance. Since we often engage in conversation about the dollar volume of maintenance budgets, I though it’d be interesting to calculate how much golf maintenance costs in the following terms:
- Maintenance Cost per Round
- Maintenance Cost per Golf Member
- Maintenance Cost as % of Gross Revenue
Of additional interest were the following benchmarks:
- Rounds of golf per member
- Gross Revenues per Member
- Gross Revenues per Round
First, we looked at private clubs surveyed during 2016, 2017 and 2018, we’ve identified nearly 400 clubs that we’ve researched during that period. These clubs were located in 24 states, in a variety of climatic regions and range from small revenue clubs ($400,000) to multi-course facilities with $33 million + in revenues.
Below is a summary of what we learned:
With a sampling of nearly 400 clubs, some conclusions can be drawn from the data. As one might expect, the ranges are quite broad, however the data shows some results that would most likely be expected.
The typical private club generates between 19,000 and 20,000 rounds of golf per year per 18-holes. The typical club generates approximately 60 golf rounds per membership and spends between $1 and $1.2 million on golf course maintenance. These expenditures show a typical cost of approximately $54 to $62 per round or $3,300 to $3,400 per member for golf course maintenance, which hovers around 20% of gross revenues of the club. Obviously, there are extremes (as shown) but there can be a variety of reasons for departures from the norms, which can include limited membership/play, budget limitations, physical challenges of the property and other considerations.
Our sampling of daily-fee courses wasn’t quite as large at nearly 200 facilities, but still large enough to be telling. These facilities were located in 14 states, also in different climatic regions and range from smaller revenue facilities to one with $16 million+ in revenues. The results are summarized below:
Of particular interest, but not unexpected is that the typical daily fee facility hosts more rounds (30,000 to 31,000) per 18-holes, have lower maintenance budgets ($425,000 to $570,000) and spend less per round ($13.00 to $17.00) on maintenance than private clubs. However, they spend between 27.5% and 30% of their gross revenues on maintenance.
While there will always be variables to consider, such as climate, size of maintained areas, cost of water and labor and physical characteristics of the property, looking at the cost to “produce” a round of golf sheds light on the resulting cost of membership and green fees. As reflected in the data, it costs more to produce a round of private golf than daily-fee, whether looking at it per round or as a percentage of the club’s gross revenues. To those operating or considering purchasing a golf facility, this analysis illustrates a metric not often considered in the competitive market environments we inhabit. To the golfer lamenting the cost of playing golf, this analysis adds perspective and might shape demands.
Golf course maintenance is usually the largest cost of any golf operation. The cost only goes down when sacrifices in conditions are made for budget constraints. The question we all have to ask is whether these costs are economically justified both from the operator’s and consumer’s viewpoint.
We appraised one private club this year which uses heat and drought resistant fescue throughout the golf course. The result was excellent playing surfaces for costs way below that of typical private clubs, enabling them to limit membership and create a less crowded, more exclusive experience while maintaining economic feasibility. The agronomists tell me that a variety of turfgrass varieties can be employed, if only consumers would modify expectations, especially as it relates to the emerald green visual effects we’ve all become used to. We spend thousands of dollars to travel to Scotland and elsewhere to play on hard, BROWN and dry golf courses and love it. But we eschew any brown spots at our home course or club and often hear talk about firing the superintendent, regardless of the challenges he or she may encounter.
I’m as guilty as anyone for enjoying the pristine conditions we’ve become used to, and of supporting same by membership at manicured clubs. However, our game is shrinking and cost is always near the top of the reasons given for not playing, either by former golfers or potential new golfers. Does it really have to be so green? Maybe “green” (as in brown and more environmentally friendly) is also more economical.
It costs a lot to provide a round of golf, and either the golf industry has to find ways to do it more efficiently, sell that to new golfers or convince the existing golfers to pay for it. Next time you tee it up, think about your share of the cost of that round.