The single most significant obstacle to growth in the golf course industry remains a lack of debt financing for acquisition and improvement. I’ve maintained this stance for sometime, and I remain thoroughly convinced —based on my extensive observations of private clubs and daily fee facilities that have invested in this manner (and those that have not) — that properties which invest in a thoughtful and considered manner will prosper in the months and years to come. Being progressive in this manner has proved advantageous, full stop. There is no debating this point. Those properties that have simply treaded water are suffering the consequences, i.e. closing, in many cases, or selling in distress.
However, for clubs looking to make improvements (or hoping to sell and move on), the biggest obstacle has been a lack of debt financing.
To assist our clients, we at Golf Property Analysts have successfully worked to identify sources of debt capital. By no means are these sources cheap — or easy to qualify for. But there are opportunities out there for golf properties in a variety of economic “situations”. If you seek mortgage financing, call us and let’s see if we can help.
While 2012 was a positive year for most golf courses — i.e. increased rounds and memberships at private clubs that have that have invested in/improved their infrastructures — a major concern remains: course maintenance budgets continue to decline. Many superintendents have worked miracles with smaller budgets, but I remain concerned about the things that may not get done. They will cause long-term problems with demand.
Players across the board still demand premium conditions, and it will be interesting to see if the economic recovery creates a willingness to pay for those conditions, because increased frequency of fairway and rough mowing costs money, bunker maintenance, tree care and other non-essential practices still require labor, cost money and make the small differences that some consumers demand.
Another key factor: Whether golfers will embrace “brown” golf courses in the interest of keeping fees down. With increased pressure on water resources, this will be something to watch.