Golf is generally considered a rich man’s sport. You pay hundreds of dollars every week that can add up to thousands at the end of the year. With such costs, most people think golf courses make tons of money. But do they make money?
A recent study shows that 75% of golf courses in America make profits, while the rest drown in debt and bankruptcy. Golf courses make money based on membership fees, pro shop sales, green fees, and food and beverage sales.
If you’re looking for a starting point to make money in the golf industry, consider having the best golf course in the USA. Golf courses become profitable by increasing these sales or reducing expenses. Read on if you’re interested in knowing how golf courses make money.
How Do Golf Courses Make Money?
Golf courses have a myriad of revenue streams that include the following.
Green fees are the price you have to pay to play golf at the course. This fee is based on playing nine or 18 holes of golf.
Green fees are also known as privilege fee as it grants you access to some resources at the course. It is the main source of revenue for golf courses and brings in thousands of dollars per year.
If you’re a die-hard golf enthusiast or a professional player who frequently visits the course, you’ve probably thought of membership fees. Membership fees are charged monthly, and give players unlimited access to the golf course and other benefits.
While membership fees do not bring in as much profit as green fees, it offers a consistent cash flow for the course.
Another area that generates sales is the food and beverage section. Golf courses have spike clubs and clubhouses with amenities at a cost. The food and beverages are sold at a slightly higher price to attract high-end golfers.
Sometimes non-members hire the venue for functions and events at a fee. The golf course earns extra money from this and a supply of food as well.
Sponsorships are a major way for increasing a golf course’s visibility. Plus, it adds revenue to the course from the payments made by the big corporations. A sponsorship deal may enable me to create a golf tournament with a cash prize for the top three.
The sponsor goes ahead to pay the prize money and the golf course in exchange for brand awareness and positioning. That’s why it is easy to assume the success of a course when it has major sponsors in an event.
Golf courses have large tracts of land that are perhaps not fully utilized. Though the land acts as a playing field, it can also be used as a platform for advertisement.
First off, instead of having banners during events alone, some golf courses negotiate deals to have billboards on some parts of the land as a lasting advertisement platform. This is an ideal way to make a company’s brand stick.
They can also use branded merchandise for the members and the community. It is a good idea to have branded merchandise such as pitch repairers, towels, caps, and many more.
A pro shop on a golf course is as common as the green grass on the course. You can barely find a golf course without one of these because they make money.
A golf pro shop sells merchandise, golf accessories, and equipment. You can find golf bags, balls, caps, golf clubs, and other accessories.
Another ideal way golf courses make money is through major tournaments. Hosting tournaments definitely makes money for the golf course since it attracts more people.
A golf course can host local tournaments or international cups like the Masters, PGA, and LPGA tours.
Golf tournaments make money because the golf courses get paid to host these events.
After the lockdown period, e-commerce has never been more relevant to businesses like golf courses. An e-commerce platform increases the value of interaction for golfers.
With an online display of your items, it is easier for golfers to add more to their cart for quick purchases.
E-commerce allows golf courses to understand their customers and increase sales and income. It also provides courses with a valuable database for customers, which could be useful in advertising.
The idea of having an online golf shop is to offer multiple delivery options and allow the golfer to pick up the item in the pro shop.
That sort of convenience is almost guaranteed to increase engagement and revenue for the business.
Finally, some high-end golf clubs have golf simulators that people can use for a fee. We know that golf simulators are very expensive and cannot be available in every household.
So, golf courses have them in the field to provide a surreal experience at a fee.
How Much Do Golf Courses Make?
The average golf course makes about several hundred thousand to more than a million dollars per year. These figures are so far apart because no golf course is the same as another.
You can find golf courses from as low as 9 holes to big ones with up to 54 holes. That’s not because there are local, private, and semi-private golf courses.
Amenities also play a role in revenues as spike clubs, driving range, and others will increase the annual sales.
Also, remember some golf clubs are nonprofit organizations which means they care less about the money. So, you’ll find private clubs making as much as two million dollars in a year and spending the same two million dollars.
Such clubs are more focused on the experience rather than profits.
Conclusion: Do Golf Courses Make Money?
We hope you know how golf courses make money and why people are willing to pay top dollar to play.
The profits in courses come from various avenues like green fees, membership fees, advertisements, hospitality, and more.
In most situations, they will make profits depending on how tight the expenses are.
Luckily, the courses have multiple income streams and ensure they are generating enough revenue to make a profit or provide service to customers.