The Business of Municipal Golf
A look at the important role municipal golf courses play.
Every Monday, I write a newsletter breaking down the business in golf. Welcome to the 135 new Perfect Putt members who have joined us since last Monday. Join 1,684 intelligent and curious golfers by subscribing below.
Hey Golfers -
Spring is bringing warmer temperatures to cold climate areas of the world - and golf season is right around the corner. It is a great time to look at the business side of municipal golf.
Municipal golf courses gained popularity in the 1950s through the 1970s. Cities and counties were happy to finance the development of golf courses. Municipal golf courses were considered as important as parks, libraries, and swimming pools.
According to the National Golf Foundation, there are 16,000 golf courses in the United States. Those golf courses are broken down into three different buckets.
Private
Public - Daily Fee
Public - Municipal
Over 2,500 golf courses in the United States are municipal golf courses. Nearly 8,500 are daily fee golf courses, and the remainder are private golf courses.
Some of the most famous golf courses in the United States are municipal golf courses.
Bethpage Black
Torrey Pines
Chambers Bay
While nearly 65% of golf courses are considered public in the United States - that doesn’t mean they are municipal tracks. The distinct difference between public - municipal and public - daily fee is the ownership and business behind it.
Let’s look at Whistling Straits and Bethpage Black, two public golf courses. Whistling Straits is owned by the Kohler Company and charges $485 per round at the peak rate and an additional caddie fee of around $100. Bethpage is owned by the State of New York and charges $85 on the weekend if you are a New York State resident.
Here is a breakdown of how much it costs to play a more popular municipal golf course as a resident.
As a whole, municipal golf courses have an issue. In 2019, it was estimated that 67% of municipal facilities broke even or made a profit from a financial perspective. That means that over 30% lost money.
Municipal golf courses often get lumped into the city or county Parks & Recreation budget. Frequently, this leads to budget and labor constraints, as golf courses are an easy target for budget cuts in local government.
To overcome the financial difficulties municipal golf courses face, they either close or raise capital from donors. It is estimated that 7% of municipal golf courses have closed since the 2008 recession.
Memorial Park in Houston was fortunate to take the latter option. Houston Astros owner, Jim Crane, helped fund a $34 million renovation. But not every municipal golf course in rural America has this option available to them, so they need to get creative.
Let’s look at Winter Park golf course, a nine-hole municipal golf course - located in Winter Park, Florida.
In 2015, the golf course made $406,000 in revenue. Winter Park had an estimated loss of $150,000 that same fiscal year. The city needed to subsidize operations using local government money, leading to a negative economic impact. Understanding that the golf course was at a critical point, the city created a task force on how to make the golf course profitable. One of the essential items is that the city was pro-golf.
Winter Park was committed to making the golf course profitable and realized they needed to renovate it. They hired Keith Rhebb and Riley Johns. They had a budget of $1.2 million to renovate Winter Park.
Changes included:
Re-shaping fairways, greens, and bunkers
The addition of an 18 hole putting course
Removal of 100 trees
Irrigation system
The investment in the renovation worked.
2018 revenue: $775,000
2019 revenue: 875,000
Winter Park increased its revenue by 90% in the three years from 2015 to 2018 after the renovation, and more importantly, Winter Park was profitable.
Winter Park has a weekend rate of $18 for nine holes for a resident. They average 50,000 rounds per year.
Even better? The city of Winter Park recently announced the purchase of Winter Pines, an 18 hole golf course, for $7.4 million. Winter Pines had over 60,000 rounds in 2020. The Mayor of Winter Park stated it would likely contribute as a pure business investment.
Municipal golf courses are important for the game of golf. They provide accessibility and cost-effective rates. To revitalize some municipal golf courses around the country, we should look at the success stories and learn from their experiences.
Have yourself a great Monday. Talk to you next week!
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A very important read for municipal golf operators & players. So much potential here in Portland, Oregon. City golf courses can be tremendous attractions and needed green space for native habitat. Glad you are helping to tell this story, Jared!!!
Nice article!