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Golf Courses

We have years of experience in this industry for the valuation of the business, equipment and real estate. Let us help you with our valuation consultation in all areas of the valuation of golf related businesses. We have valued golf course businesses for private individuals and the Internal Revenue Service. Below is a brief synopsis of the industry.

Description of Business

Large areas of land landscaped for playing golf. Golf course facilities may also include pro shops, cafés, bars and equipment centers.

General Industry Information

The 12,000 golf courses in the US generate combined annual revenue of about $18 billion. Large companies include ClubCorp and American Golf Corp. About 3,000 courses, with $7 billion of revenue, are owned by non-profit entities such as municipalities and private clubs. The industry is highly fragmented: within the commercial segment, the 50 largest companies account for only about 25 percent of the market. Most companies operate just one or two courses. The average commercial course has annual revenue of about $1 million.

Golf courses receive revenue from membership dues, activity fees, sales of food and drinks, and sales of merchandise. Membership dues account for a third of industry revenue; activity fees (‘greens fees’) for 25 percent; food and drinks for 25 percent.

Golf courses can be classified as private or open to the public. Private courses may be associated with country clubs, golf clubs, or real estate developments. Courses open to the public may be associated with resorts or operated as local ‘daily fee’ courses, including commercial and municipal courses.

Red Flags and Risks

Demand is driven by demographics and population growth. The profitability of individual companies depends on efficient operations and good marketing, because many costs are fixed. Large companies can have advantages in management experience. Small companies can compete successfully by operating in favorable locations or through superior marketing. The industry is very labor-intensive: annual revenue per employee is just $55,000. When looking at financials, check to see if grounds maintenance is sufficient. Many courses have fungus and problems with grass which may need to be replaced. Water is always an issue and should be looked at closely.

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