Golf Courses Suffer as Recession Deals a Bogey
Hundreds of courses have closed, and once-exclusive country clubs have slashed fees or let in the public. Often linked to housing tracts, the greens and fairways have slumped along with real estate.
Palm Coast, FL – November 25, 2009 – An excellent article found in the Los Angeles Times hits the nail on the head. Too many golf courses were built for the purpose of selling real estate. Now that the real estate market has died, golf course operators face high fixed costs and declining revenue. The landscape of the golf industry has changed.
By: Roger Vincent – LA Times – November 22
The recession has dealt a mean bogey to golf. Hundreds of courses have closed in the last two years and many formerly exclusive country clubs have slashed fees or opened their greens to the public.
Sales of golf balls, clubs and apparel — a multibillion-dollar industry — have dipped 10% this year as players trim spending, according to golf researcher Pellucid Corp.
But perhaps the most dramatic examples of golf’s woes can be seen in the string of barren fairways and locked gates. Through September of this year, at least 114 of the nation’s 16,000 or so golf courses had closed, according to the National Golf Foundation, a number that was offset only partly by the opening of 44 new courses.
Toby’s Commentary: The LA Times article echoes my thoughts. Developers enjoy the increased prices a golf course brings to their projects but do not anticipate what they will do when sales stop. Golf courses are just too expensive to operate for many developers. Flagging sales revenue can quickly create a huge cash deficit, just when additional financing is unavailable.
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Palm Harbor Golf Club Test study?
The bottom line to a profitable golf course is the cash flow. The highest and best use of the land a golf course is using, is a way to determine weither to keep it open, or give it up for sale to a developer. That’s a business logical analysis many are making all over the world. It will be interesting if Kemper, stays with the redone Palm Harbor Golf Course, as the industry goes through a contraction of interested players.The option still is present to operate it with city employees, if Kemper walks away. If it indeed does not prove to be profitable for them, we probably will not see other courses reopen, and perhaps more close in the Palm Coast area. I noticed the city manager hiding in the background at the grand opening, does he know it’s in trouble?
On George’s comment
If the city can’t keep Palm Harbor open, it’s a sad commentary on the state of the golf industry indeed. They have no land cost to carry.
Reply to BB
They have no land cost? We the tax payers own it and have about $6,500,000 in it already. It should be kicking off $50,000 a month gross to justiy the investment. Just putting that ammount in a 3% money market account would return $16,250 a month in interest. At $35 a round of golf they need 465 rounds each month to equal the interest we are loosing.That’s 15 rounds a day 7 days a week, that is $0 profit. They won’t make money until they have 50 rounds a day every day to make just over $50,000 gross a month. We shall see what happens, but it does not look good.
On Georges’ comment: ‘hiding/trouble’
We didn’t see that; we were not invited to this re-opening. We were however invited to the unofficial Opening just after the very first 9 holes were completed since that was the very first Palm Coasters purchasers unofficial Opening. Dr. J. Norman Young personally extended this Invitation to us. Later, we attended the official ‘Grand Opening’ when the first concrete, block, and stucco Clubhouse was finished with all 18 holes finally completed, and we also attended the subsequent Herb Bratloff rehab/Nancy Lopez re-design ‘re-Opening’. Al Smolen personally invited all of us to that also with personal Invitations.
George Edward Chuddy
https://palmcoastcorehomes.tripod.com
https://palmcoasthistoricresources.tripod.com.
GREEN FEES
AM A SNOWBIRD SPENDING 3 MONTHS IN PALM COAST. PLAY GOLF 3 TIMES A WEEK WITH MY WIFE. WITH THE GREEN FEES NOW SET FOR PALM HARBOR GOLF COURSE ESPECIALLY OUT OF STATERS I DEFINITELY WON’T BE PLAYING THERE. OTHER COURSES CLOSE TO PALM HARBOR ARE MORE REASONABLE. WOULD HAVE LIKED TO PLAY PALM HARBOR BUT IT WILL NEVER HAPPEN. YOU NEED THE REVNUE FROM THE SNOWBIRDS. WILL SEE HOW LONG YOU WILL STAY OPEN—–
Golf Play
I agree the name of the game is Revenue. Pricing reconstituted former private clubs too high for public play so former private members can have a sembalence of exclusivity is not facing
reality. A number of marginal private equity clubs in SW Floida have chosen
the semi-bundled plan where now all members have to pay an annual fee equivilent to a sports membership
around 3700/year just to cover operatioal costs. Golf membership is on top of that and the courses are now open to the public. The clubs that have done this are getting by. Others where members can live in a gated golf community and not have to have some type of membership are seeing their homes equity go down the drain and the developments go into receivership.
There will be less choice over the next few years
Brian D Anderson
Reply to GREEN FEES
Good point, you should be given a resident rating for being a more than few day visitor. Send a request for status as a winter resident to the city manager Jim Landon, he may listen to your point of being charged too much, as non resident. He’s at http://www.ci.palm-coast.fl.us
"Seasonal Rates" at Palm Harbor
There is a ‘Seasonal Player’s Club Card’ which brings the rate to $45 per round for players who are Seasonal Players.