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Is Golf Getting Too Expensive?

The only way to value what is too expensive for a golf course is to look at what is the cost of the green fee. Then that also comes down to each individual golfer's experience they had at a particular golf course, the course conditions, and the amenities. However, when you see a post on Instagram from Golf.com that TPC Sawgrass has increased their rate to $900 (screenshot below) you have to ask the question.



Is Golf Getting Too Expensive?


On one side of the coin, the answer is an absolute Yes! I have been to Sawgrass and it is the most overrated golf course I have ever played. The staff was horrible and their rates do not include a caddy fee. I've played other courses that included complimentary lockers with a robe, spike changes on your shoes, all non-alcoholic beverages, complimentary valet parking, and a caddy for less than $350. And those are courses that have hosted PGA Tour events.



The key to valuing a golf course is based on your experience. Would you pay $400 to play a golf course that was in pristine condition and they give you the VIP treatment? I have and I would again. For example one of the best courses I have played, and maybe my all-time favorite, is Solmar Golf Links in Cabo San Lucas, MX. The rate was around $350 and it included everything. When I say everything I mean it. If you wanted a Filet at the turn with a whiskey, or just a coke and a hot dog it was all-inclusive. Full practice facilities, a great staff, a perfectly manicured golf course, and a scenery that was amazing.


The point is what a golfer pays is what they decide a golf course is worth to them. I have played many golf courses I have thought were overpriced but that is based on the amenities they have, the number of employees, and the course conditions. I fa course is lacking the conditions, and you see very little staff around, or they don't have a full clubhouse with locker rooms but still want to charge $90 or more then that is an overpriced golf course. On the other hand, if there are two beverage carts, lockers, full practice facilities, bag drop, and a restaurant charging $150 you could almost argue that golf course is underpriced.



It takes anywhere from $1,250,000 to $6,000,000 to operate a golf course. The number of employees and the amenities offered make the biggest difference. The better conditioned a golf course is, it usually means they have more employees on the maintenance staff. Those courses that are in better condition also usually have better amenities.


Let's look at a golf course that has a full grass driving range, "tour" conditions, a full pro shop, a full-service grill, a bag drop, and a daily beverage cart. Let's say it takes $6,000,000 per year to operate. That golf course would have to do almost 40,000 rounds annually or nearly 110 rounds daily for an entire year at $150 per green fee. Although that doesn't seem like a lot but the average number of rounds at most golf courses is only around 35,000 annually. Depending on the weather it could be less.


For our example golf course, the maintenance budget would be $1,500,000 to maintain high-quality conditions. That covers equipment, seed, fertilizer, and a staff of about 18 - 24. If that was all a golf course needed then the green fees could be as low as $40 just to break even. However, when you add operating costs such as electricity for charging carts, employees to maintain and clean those carts, as well as other employees to clean the amenities, serve you, check you in etc... the cost goes up. That $40 that covers the maintenance just went up $10 for each additional service. $10 toward each utility, cart staff, golf staff, grill staff, beverage carts, cleaning staff, and office staff making the break-even green fee $150



Where golf gets borderline ridiculous is when golf courses start asking prices that far exceed their value. That is when golf is getting too expensive. Private clubs can do what they like as their exclusivity is another factor in their pricing. Public and resort courses on the other hand should in a sense have a limit. There are only so many amenities that can be offered to make the price go over a certain rate. I have yet to find a golf course that offers such an experience that would justify any price over $400.


Let's face it some golfers will consider a $500 nothing to play a famous golf course even if it is a bad experience while others wouldn't pay over $100 at any golf course. For me personally, I would probably pay over $500 to play golf if that course amenities were all-inclusive and the experience included a helicopter ride to and from the course. Then maybe that experience would be worth $800, $1,000, or even more.




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