As I was flipping through the July issue of Golf magazine looking for the 1,456th tip to cure the slice I’ve had since the day I picked up a club, I came across something interesting. Apparently, the average mid-scale public course is raking in pretty good money and the high-end guys are clearing mid-six-figure profits annually.
I’ll pause for a moment to wait for you to stop laughing uproariously.
This fascinating bit of info appears on page 32 of the July issue of Golf (it’s apparently not online), but let me summarize the NGF data they cite:
· The average mid-range public course with $30 to $59 green fees has total revenues of $1.31 million and expenses of $1.06 million. The magazine notes that this is a “reinvestment rate” of 81 percent. Conversely, it’s a profit margin of 19 percent.
· The average premium daily fee ($60+ green fees) earned $2.54 million on expenses of $1.95 million. So, expenses were 76 percent of revenue and the margin is 24 percent.
OK, try again to stop laughing.
OK, I obviously have a few questions and observations about this stunning little pile of “data” from our friends at Golf and the NGF:
1. What the hell are they thinking publishing this? Now every golfer that reads this will assume the facilities they play are raking a nice profit off of every round at a time when probably less than half of the courses in those two categories are even profitable.
2. How old is this data? Smells like 2005 or so to me. Not very relevant to today’s market. Kind of irresponsible to put it out there now.
3. I seriously doubt this includes taxes, debt service, capital investment and all of the other “real world” stuff that tangles up this overly simplstic view of our finances.
4. Even if it is an accurate representation, the notion that average profit margins are around 20 percent is really fun if you consider that you have to have some percentage of those courses that were losing money. That suggests that some facilities were making 40 percent or 50 percent margin. Yeah, right.
5. To add insult to injury, the graphics show that both food and bev and pro shop operations were very profitable. They pulled a little shenanigan with the research and rolled in ALL payroll into the category of “course maintenance.” So, apparently, the bartenders, servers, cart boys and rangers are all now part of your budget. Hell, even I could run a profitable food/bev operation if somebody else was paying the labor cost.
6. To repeat…what the hell were they thinking?
As Benjamin Disraeli, the great British statesmen, once said, “There are three kinds of lies: lies, damned lies and statistics.” Amazingly, Golf and the NGF managed to hit the trifecta here by putting all three kinds into one short article.