It’s no secret that managing and maintaining a golf course is an expensive endeavor. There’s just so much to take care of, from course maintenance to fixed charges like property tax, insurance, interest, and the like. This makes one wonder: do golf courses make money?
There’s no straightforward answer to this question. Running a golf course is among the most difficult in the world, as you can never guarantee its success even with a lot of effort put into it.
But don’t let that fact dissuade you; golf courses do make money—a ludicrous amount, at that—if done right. Some earn hundreds of thousands of dollars a year, while others exceed the million-dollar mark. It really all depends on how the business is run.
In this article, we’ll discuss everything you need to know about running a golf course as a business. How do golf courses make money? How much does it cost to run a golf course? And, most importantly, how much money do golf courses make on average? Let’s find out!
Table of Contents
Do Golf Courses Make Money?
With proper management and maintenance, a golf course can make quite a bit of money at the end of every year. Some earn several hundred thousand a year, while others exceed the million-dollar mark. It can be a ludicrous business venture when done right.
That said, not all golf courses experience the same success. Some courses go bankrupt due to the high cost of keeping them alive and prospering. Keeping a golf course in pristine condition doesn’t come cheaply, and it almost always requires external help. It takes a lot of juggling to find the correct balance of income and expenditure.
How Do Golf Courses Make Money?
With so much space to take advantage of, there’s no limit as to how you can make money on a golf course.
The most common income stream of golf courses comes in the form of membership fees. Membership fees differ from location to location, but it usually costs between $1,000 to $5,000 a year on average per person. This might not seem like much, but this amount can stack up quickly the more memberships a course has.
Golf courses can also make money through more “creative” ways, such as branded merchandise, food and beverage sales, sponsorships and advertisements, and golf-related services, such as club fitting, coaching, and the like.
Why Do Golf Courses Go Bankrupt?
According to the National Golf Foundation, nearly 1,200 golf courses have permanently shut down in the past 10 years. As you might expect, these shutdowns are caused by the fact that golf courses are extremely expensive to run.
Golf courses are known for their picturesque views and near-perfect grass conditions. Avid golfers won’t settle for less, especially if they’re willing to pay membership fees.
Unfortunately, this picture-perfect landscape takes quite a bit of money to maintain; in fact, course maintenance is arguably the biggest expense of a golf course.
Golf course utilities can also be quite expensive. Most of the time, lights, water, and air conditioning are on. Utility bills can cost thousands of dollars a month, which are especially difficult to pay off during the off-season.
There’s also staff to take care of, as well as lease/loan fees to keep up with. Without a steady flow of customers, owners will have a hard time paying off all these fees to keep their courses running, which is why most settle for bankruptcy instead of continuing in the business.
What Are Some Strategies to Boost Golf Course Revenue?
The best way to earn the most money in your golf course is by maximizing your revenue per customer.
The best and simplest strategy to earn more money in a golf course is maximizing your revenue per customer. This doesn’t mean increasing membership fees or green fees; it simply means giving customers more opportunities to spend their money during their time in the course.
Dozens of opportunities exist to produce more revenue. This includes:
- Custom memberships
- Loyalty rewards programs
- Branded merchandise
- Online booking and reservations
- Upselling and cross-selling
- Food and beverage sales
- Equipment sales
- Outings and special events
- Rent-per-day
- Golf cart rentals
- Golf lessons
- Club fitting
- Advertisements and sponsorships
How Much Does It Cost to Run a Golf Course?
We’ve discussed how expensive it is to run a golf course, how much expensive are we talking about, exactly?
According to GCSAA Chief Operating Officer Bob Rundquist, a public golf course can cost anywhere between $200,000 to $500,000 to run on a yearly basis.
Higher-end courses and private golf courses can cost over $1,000,000 to run. For this reason, only wealthy owners can feasibly run a golf course for several years before earning half of what they spend on a yearly basis.
How Much Money Do Golf Courses Make on Average?
The golf course industry is among the most volatile out there, so there’s no guarantee that money will be made. Some owners make $30,000 per year but spend over triple the amount for maintenance alone.
Others make several hundred thousand annually but lost several million the years prior to reaching a stable income.
According to National Golf Foundation, private 18-hole golf courses have an average revenue of $3 million, but with total expenses of about the same amount.
Income and expenditures always seem to come hand-in-hand with golf courses; you can’t have one with the other. Unless you run a successful golf course, expect to spend about the same amount of money you receive at the end of the year.
Conclusion
Golf courses with multiple business strategies earn thousands, if not millions, of dollars annually. These golf courses have hundreds of paying members, allowing them to keep the business running even during the off-season.
Alongside membership fees, these golf courses can make money through food and beverage stands, sponsorships, advertisements, lessons, equipment sales, and the like.
