Par 3 Golf Course Entertainment
A business look at the commercialization and opportunity of Par 3 Golf Courses.
Every Monday, I write a newsletter breaking down the business in golf. Welcome to the 20 new Perfect Putt members who have joined us since last Monday. Join 5,096 intelligent and curious golfers by subscribing below.
Pictured above is Hiwan Golf Club in Evergreen, Colorado — recently acquired by Concert Golf Partners.
Concert Golf Partners is the leading boutique owner-operator of upscale, private clubs nationwide. Since its founding in 2011, Concert Golf has developed a reputation as the buyer of choice for private club owners seeking to pass the torch to a high-quality operator.
Concert Golf Partners has a three-step commitment when acquiring a golf club.
Never assess the members
Continuously re-invest in amenities
Preserve the unique traditions and culture of the club
Concert Golf is actively seeking to add to its boutique 28 club portfolio. For more information on the acquisition process, reach out to the Concert Golf Team below.
Hey Golfers —
8AM Golf has entered the golf entertainment space with its recent investment in 3’s, a twelve-hole Par 3 lighted Golf Course in Greenville, South Carolina.
The holding company has several brands under its umbrella, including:
True Spec
GolfLogix
Chirp Golf
GOLF Magazine and GOLF.com
One of the more interesting aspects of the investment? Justin Timberlake partnered with 8AM Golf in the 3’s venture.
Before we dive into detail on the short course entertainment space — let’s provide some context on the golf entertainment industry.
It’s hot.
Topgolf has opened six venues through the first three quarters of this year. Five of the six are owned by Topgolf, requiring an aggregate estimated development cost of $150 million. On average — a Topgolf venue brings in $17.5 million in revenue.
Puttery has opened three venues through the first three quarters of 2022. Drive Shack has spent between $21 and $33 million on development costs for the three venues. Drive Shack has recognized $18.7 million in Puttery revenue this year from its five locations.
Puttshack has four locations in the United States and four in the United Kingdom, with twelve planned venues in the pipeline. Puttshack recently received $150 million from BlackRock to ignite its growth.
These three examples are just scratching the surface of the investment in golf entertainment — several hundreds of millions of dollars have been invested into the golf entertainment industry this year.
And there is a common theme. Disrupt traditional spaces, and use that blueprint for multiple locations.
Topgolf has disrupted the traditional driving range model with its focus on entertainment, technology, and customer experience.
Puttery and Puttshack aim to disrupt the mini golf model with technology and entertainment.
Five Iron Golf and Intown Golf are commercializing the indoor golf space by creating communities of engagement.
Driving ranges, mini-golf, and indoor golf are all being disrupted by technology and entertainment.
What about Par 3 Golf Courses?
Google Trends tells us an interesting story. People are looking for Par 3 Golf Courses.
Since 2013 the words “Par 3 Near Me” have exploded in Google searches. The chart below shows the peak relevancy in each year — a value of 100 is the peak popularity for the term.
The most popular areas in the United States?
South Carolina
North Carolina
Wisconsin
Minnesota
Colorado
According to NGF — there are around 700 Par 3 Golf Courses in the United States, 523 are accessible to the public, and 67% are standalone golf courses not attached to a traditional golf course.
There was a net gain of Par 3 Golf Courses in 2021 for the first time since 2000.
With this information — it is easier to understand 8AM’s strategy to invest in 3’s.
3’s currently has one location and plans for several more in the Southeast.
Nashville
Charleston
Tallahassee
The disadvantage of outdoor golf entertainment versus indoor golf entertainment is the weather and daylight.
3’s strategy to build venues in the Southeast will mostly mitigate the weather risk. And to circumvent the daylight issue, they will have lights at their facilities to maximize revenue.
3’s charges $26 per round and has three membership options.
The Unlimited — $1,500
Corporate — $1,000 - $1,500
The Short Game — $1,000
Par 3 Golf Course green fees have a huge revenue opportunity. 8AM CEO Hoyt McGarity referenced annual rounds at The Hay at Pebble Beach in a Forbes piece. He estimated that it is between 60,000 - 70,000 per year.
The Hay charges $65 per round with the exception of juniors under 12 and $5 for Youth on Course members. At the high end — The Hay is bringing in north of $4 million per year in green fees.
While The Hay comp is most definitely on the high end of Par 3 Golf Course revenue — it provides an interesting benchmark looking at the industry.
But in golf entertainment, it is much more than green fee revenue. Food and Beverage are as equally important.
Food and Beverage revenue from Puttery is 48% of total revenue. And that number lines up with what golf entertainment industry executives have communicated with me.
From a business perspective — the footprint of a Par 3 Golf course is certainly attractive. Most Par 3 Golf courses can be built on 25 acres, unlike a traditional course built on 150 acres. Resulting in less overall costs, including maintenance.
A round at a Par 3 Golf Course takes less than an hour on average — Increasing the number of rounds possible.
The commercialization of Par 3 Golf Courses and creating a national or international brand in the golf entertainment niche is a fascinating business opportunity.
I am confident that more Par 3 Golf Course venues focusing on golf entertainment will be announced in the future. And it very well could be the next big business in golf.
I am optimistic about golf entertainment as a whole — in my opinion, and backed by data — it introduces new golfers to the game of golf.
Have yourself a great Monday. Talk to you next week!
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Golf and entertainment are smashing together at a record rate...traditionalists can't be too happy about all of this?