What are the ongoing operating expenses of a golf course? How do you reduce your expenses in a golf course business? Here is everything you need to know.
According to Golf Digest, over 20 million people in the United States play golf. Golf courses provide these people a comfortable place to play the sport. Most courses are 9 to 18 holes, and they may have other amenities such as clubhouses and pro shops.
A golf course’s ideal customer is an affluent golfer. Such a person enjoys the sport, and they have the money necessary to go golfing regularly.
According to reports, most privately owned golf courses charge an average of $40 per round with a cart on the weekend. Weekday prices tend to be slightly lower. Some courses, however, charge significantly more. For instance, courses built since 1990 charge $60.55 per weekend round on average.
Some well-known courses, such as ones where PGA championships have been played, charge hundreds of dollars per round – up to $495.
In 2015, 69 percent of golf courses broke even (24 percent) or earned a profit (45 percent). The profitability of these courses varies greatly, depending on their location, prestige, fees, and amenities. Some just barely broke even on the year, while others brought in sizable profits.
However, for golf courses to be economically viable and agronomically sustainable, certain criteria are quite relevant. Affordability and accessibility to those in the community is one very crucial criterion. Golf courses cannot rely on visitors and tourists alone, nor for that matter can they be used as a means of selling properties.
Also note that drainage is a key requirement since a good turf cannot be produced if the turf suffers from poor root development. In recent times, it is becoming increasingly important for golf courses to ‘sit’ within their natural environment.
Have it in mind that both design and layout will play a major part in determining inputs of labor, equipment, and materials. The ongoing expenses of a golf course business largely consist of maintenance fees for the course and any buildings on the property. In 2016, the average course budgeted $750,000 for these expenses.
According to reports, this figure doesn’t include employees’ salaries, which could be an additional several hundred thousand. The cost to achieve the condition players expect — or will tolerate — ranges from about $500,000 a year for a daily-fee course, to $1,000,000 a year for a private club.
Because building and running a golf course is so expensive, many business owners opt to purchase and let someone else manage it.
Note that many golf courses were forced to differentiate between essential and nonessential maintenance programs so they can focus on what matters most. Numerous strategies have recently been utilized to reduce golf course maintenance costs; however, here are major ongoing operating expenses for golf courses.
Ongoing Operating Expenses of a Golf Course
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Not surprisingly, reducing staff size is a very common cost-cutting strategy because labour often represents between 50 and 60 percent of a typical golf course maintenance budget.
Recruiting and retaining reliable maintenance staff is currently one of the biggest challenges at golf facilities across the country. Attracting and retaining the right talent for your course may mean paying your people more than that which is offered by competitors.
Even highly-skilled individuals need some reinforcement to maintain their craft. To stay on the cutting edge of new technology and trends, most golf courses promote a culture that values safety and prevents accidents; a robust, formalized training program for your people is a very necessary expense.
It’s also important for superintendents to seek training to become better people managers so daily operations run smoothly and more efficiently.
Fertilizer and Plant Protectants
Natural courses on links, heath and down land require the least input, therefore the lowest costs. Poor, wet, stone filled or hungry soils require the most input therefore costs more to maintain.
Many courses have adjusted fertility, pest control, and wetting agent and plant growth regulator (PGR) programs in an effort to cut costs. However, overzealous reductions to these programs are a double-edged sword. For instance, timely applications of wetting agents can reduce the need for labour-intensive hand watering.
Abandoning preventive insect- or disease-control programs can yield initial savings, but the cost of controlling major pest outbreaks can far exceed the cost of preventing the problems from occurring.
Note that the choice is either to gang mow (not so popular nowadays) or to cut with ride-on units containing five or seven units. Options for presentation include block mowing (dark and light), stripe or cross mowing and contour striping the length of the fairway.
The latter is probably the least popular method. Note that the difference in total mowing time using the other two versions can vary between one to two hours. Over a year, this would equate to 60 to 120 hours more labour. This would add at least $2,300 per annum to maintenance costs.
Sands, soils and top-dressings
Have it in mind that the use of various sands, top-dressings and gravels will vary greatly from course to course depending on the size of greens and tees, drainage, number and size of bunkers, winter play and extent of paths.
Modern sand-based greens of average size will require at least 100 tonnes of dressing per year in order to prevent thatch build-up: this is also in conjunction with aerifying and scarifying. Notably, a typical 18-hole golf club will require between 300 and 390 tonnes of material per annum, half of which will be required on greens and for tee divot filling.
Golf course accessories – e.g. ball washers, benches, tee caddies, cleat brushes, divot mix containers and ornamental plantings – have become commonplace at many golf facilities. While course accessories are meant to add convenience or decoration, purchasing, installing and maintaining them requires considerable expense and labour.
Notably, courses are removing some or all of their course accessories and ornamental plantings in an effort to focus more time and money on tasks that improve playing conditions.
The job is labour intensive. It’s hard. It’s exhausting. Your people will be operating in the fringe hours with sophisticated maintenance equipment in tow. All these things put you, your people and your customers at a safety risk.
Accidents do happen, even to well- trained employees. A course culture that promotes safety will reduce the number of incidents by a significant amount. Have monthly check-ins with your team to reinforce the importance of safety at every level of operations.
The mowing of this area is also open to options; namely the amount of rough to cut, both as semi-rough and as main rough and how much should be left as out-of play areas to benefit the environment.
In times past, the tendency has been to cut as much of the course as possible in order to speed up play by reducing the risk of ball searches. Note that using a tractor drawn set of rotary gangs’ mowers may prove a cheaper alternative but this style of mowing is unsuitable on courses with large undulations or where there are numerous trees to negotiate.
With ever increasing costs in petrol and diesel, the mowing requirements of the entire golf course should be regularly evaluated and balanced against the playability of the course. Key aspects are:
- Review areas of rough and fairway to be mowed and look at opportunities to reduce such areas of the course without affecting play, for example around the sides of tees
- Consider the use of electric greens’ mowers and ride-on vehicles
- Can the rough be mown with rotary gang mowers instead of expensive ride-on units? Undulating courses or those with numerous trees are probably unsuitable to be cut with towed gang mowers
- Consider the use of PGRs (plant growth regulators) versus regular mowing
- Maintain a balance between fertilizer usage, growth, and fuel costs
- Every hour less mowing equates to a saving of four liters of fuel.
Golfing is a challenging business and most courses are constantly evaluating options to reduce inputs without negatively impacting the golf experience. Optimizing maintenance costs is not just about cutting costs but managing expenditure in a planned and organized manner and fully evaluating all aspects of the course and the way it is managed.