Making a golf course profitable is tricky and takes a lot of smart work. To be upfront with you, the best you can expect is a 10% net income if you’re planning to invest and operate one.
So if you are wondering whether golf courses are profitable, the answer is yes, but don’t expect to be making a ton of profits.
The way golf courses make most of their money is not what you may think. Yes, golf courses do profit from green fees and membership costs, but the truth is, they would not be able to survive if golf was the only stream of revenue they depend on.
Taxes, water bill, maintenance bill, and high cost of labor make it even harder for golf courses to make money and be profitable.
Therefore, golf courses must turn to different revenue streams outside of golf in order to cover their expenses and still be profitable. Let’s take a look at some of these revenue streams:
Table of Contents
Top 10 Revenue Streams Of Profitable Golf Courses
1. Green fees
The most common and consistent revenue stream for golf courses are green fees. Green fee is the amount it cost golfers to play on the golf course. These fees are paid to the pro shop or club house in order to gain access on the greens. You can expect to pay an average green fee of $35 for 18 hole round of golf or $26 for 9 holes.
Most green fees covers the cost of golf cart ride, but if they don’t, you will have to pay extra on top of the initial green fee.
When it comes to green fees, some golf courses profit more on weekends when compared to weekdays as the cost of fees increases on Friday through to Sunday.
So instead of the regular $35 you’ll be paying for 18 hole round of golf, you can expect to pay more like $49 on a Saturday to access the public golf course.
Nevertheless, the green fees make up a small portion of the total net profit a golf course is able to generate. Besides, this money typically goes towards covering the general expenses of the golf course facility such as maintenance, water supply and the cost of labor.
It would be a rare case for a golf course to be left with any substantial net profit if green fees was their only revenue stream.
A golf membership grants you unlimited access not only to the golf course but to other amenitites like dining room, practice facilities, bar, swimming pool etc.
These membership fees are far from cheap as you could be spending anywhere between $1,000 – $5,000 per year or $100-$400 per month.
As a result, most golf courses see bigger profits when golfers opt for a membership plan as the cost for membership is far greater when compared to your regular green fees. It also works out more affordable for the golfer if they pay an annual membership instead of the green fees every time they play.
On the other hand, most membership plan include the cost of food and beverage in their package as well as gym fees, so expect to pay more for these services.
A good way to save money is to go for a family membership instead of individual. Family, Individual, Corporate and Out-of-State are usually the 4 types of membership offered by golf courses.
Now that we’ve looked at the 2 most common revenue streams, here are some of the other streams that are most profitable…
3. Food & Beverage
The clubhouse is the main building where players go to when arriving at the course. Not only does it contain a pro shop where golfers check in and pay, but you will always find some kind of food and drink service.
Snacks, alcohol, soft drinks, hamburgers, pizza are some of the food and beverages sold at the clubhouse of the golf course. The total revenue from food and beverages really begins to stack up on days where there is a lot of traffic, resulting in more profits.
As a golf course owner, you should be aware of the challenges that comes with running a food and beverage service. The main challenge will come from outside competition such as local restaurants, sports bars, and dining establishments.
You’d also have find and hire a well renowned chef from a local prestigious restaurant as your food and beverage director. And for any profits to be made, the Food and Beverage director must be well versed in point-of-sale systems, customer wants and needs, marketing initiatives, and other technologies.
Moreover, challenges like shrinkage and spoilage need to be evaluated for any food and beverage operation to have a chance at profitability.
4. Night Golf
Night golf as the word suggests takes place in the night usually between the hours of 7pm and 11:30. Night golf is not a regular event as most golf courses close before 6pm. Remember, golf courses have to pay staff to run the facility, so adding more hours could be detrimental to the golf course profits. These events happen once a while.
The reason for night golf is usually to raise money for charity, get more people involved in the sport, or in this case to increase revenue for the golf course. Because night golf takes place in the evening, it can result in significant increase in food and beverage sales which makes the golf course more profitable.
During this period of nighttime golfing, staff is usually cut short in order to curve expenses while maintaining profits.
Night golf is very enjoyable as the games are much shorter (9 holes instead). Moreover, the course is more beautiful as it is lit with LED lights which reflects from the pond and lake.
The lush green turf, wide open skies, brightly lit LED lights, and stunning sea views make a golf course one of the ideal places to host a wedding.
Renting out a golf course for a wedding could cost a couple between $10,000 to $20,000 with the inclusion of food, drinks and incidentals like tables, chairs and linens.
More and more couples are deciding to host their wedding at a golf course because it is classy, upscale, and elegant. As a result, weddings are becoming a big revenue stream for many golf courses.
People tend to rent venues at golf courses not only for its luxurious hotel-like atmosphere, but for the fact that clubs do their best to make their users feel exclusive.
If golf courses are to capitalize on their profits, then they should put more of their time and energy into ensuring that the course is kept clean and beautiful in the event couples want a venue to rent.
6. 4th Of July Show
4th of July is a very special day for Americans as it marks their independence. In celebration, golf courses will host 4th of july shows involving fireworks, parades, barbecues, carnivals, fairs, picnics, concerts and games.
This event brings in a lot of visitors to the golf course and that means more revenue.
Making sales around this time of year is also much easier and not just on the golf course.
For example in my area, there are a couple different fireworks shows between June 29 – July 6. To capitalize off the festivities, I sell glow bracelets, necklaces, and glasses at the shows! I can usually get the glow sticks in bulk at around $0.05/stick. I then sell them at:
$0.50/bracelet (One glow stick with a bracelet connector),
$2.00/necklace (four glow sticks connected together),
and $1.50/pair of glasses (2 glow sticks with special glasses connector pieces)
I carry them around on a display made out of PVC pipe, and usually recruit a cousin or sibling to help me sell.
I spent about $15 in product and had my younger brother help (I held the display, while he made the change and helped people get the bracelets off).
I kid you not, as soon as we took the display out of our vehicle, people started running up to us demanding our products. We had a window of around an hour to sell before the show, and during that time, they sold like crazy.
All we had to do was slowly walk around and people would either come running up to us or yell for us to come to where they were sitting.
We covered maybe half of the viewing area, and made around $120 during that time. Had I gotten more people to help me sell, I could’ve easily made double that amount.
7. Valentines Day Event Rental
Hosting a valentines day event for a couple is similar to hosting a wedding as we previously decribed earlier. Golf course will make money from couples renting the venue, as well as make money from food, drinks and incidentals like tables, chairs and linens.
8. Pool Parties
Golf courses host and profit from pool parties especially during the summer when it is hot and people want to go out with their friends to have a good time.
It is a celebration in and around a swimming pool that features dancing, drinking, music and fun rides. The revenue that golf courses generate during this event comes from food and beverage and the cost of renting the venue.
A golf course is a perfectly suited for hosting a pool party due to it’s amazing views and luxurious scenery.
Fitness facilities are emerging as a popular feature of golf clubs as there is a need for golfers to stay physically fit and healthy. Golf clubs would be losing out big time if they fail to develop fitness centers for their club members.
Furthermore, if a club doesn’t offer the level of fitness members want, they’ll look at other fitness facilities that offer a total physical fitness experience.
Therefore, it’s important that clubs give their members the type of fitness center they’re looking for so they won’t need memberships for both gym and country club.
In this case, both the club and golf member will benefit as the golfer would save money and the clubhouse will make profit from the gym.
The golf course will also make money from non-golfers, and furthermore member attendance will increase as they think of the club as their year-round gym.
Developing a proper fitness facility that provide incredible value will begin to attract new members because people would see that your country club offers amenities that others don’t.
Hosting a tennis event on a golf course will attract both non golfers and spectators all over the country. Revenue may even increase significantly if there is a match between two popular tennis stars as the demand will increase among fans.
A golf course will profit from the sales of tickets to enter the venue and the cost to rent the venue itself. Not to mention, they will make profits from the food and beverage sold to the audience as they sit and watch in the stands.