The Ten Key Rules For Golf Developers

Many golf developments fail financially. There is absolutely no reason for these failures to happen. Golf courses have been built in large numbers for well over a hundred hears. More than 32,000 golf courses have been built world wide. The formula for getting it right is there to be seen, golf developers just need to follow the rules that work.

Anyone thinking of building a golf course should have a little tick sheet. If they can honestly tick “yes” to the following ten rules their new course will work

1. Location.

The thing about a golf course is, once it’s built, you can’t move it. The course must be near it’s customers. Good location is very simple – a lot of customers living nearby. Time and again when looking at an up and running course one sees that 80% of customers live within 20 minutes drive time of the course. Many developers pulled either by cheap land prices, or the lure of a property that just seems outstanding for golf, build an hour, or even two hours from their market. These courses will always struggle. The single most common reason for a golf course to fail is poor location.

2. Site.

Some sites just seem meant to be a golf course, other sites flat as a pancake, on the side of a mountain, or covered in rocks, will cost far more to transform into golf. If possible pick that site that lends itself to golf. The ideal situation is to have a golf architect on board from the outset. Pick the region, city, or quadrant of a city, where the development should be and let the golf architect loose to see the different sites.

3. Land Cost.

Pay too much for the land and you shoot yourself in the foot at the very outset. Many land owners, when selling for golf development, get the idea that they have won the lottery, they imagine a big sale price. The truth is that a golf development can really only afford to pay a little over agricultural value for land. There are creative ways of doing a land deal that can make it better for both parties.

4. Use A Golf Architect.

Unbelievably 48% of golf courses built in Europe over the past decade used no golf course architect. The developer either tried to design a course themselves or used a local golf pro with no training or experience as a golf architect. You hear the phrase again and again “I’ve been playing golf for twenty years. I know how to design a golf course.” The statement has about as much sense as saying “I’ve been I been driving over that bridge for twenty years, I know how to design a suspension bridge.” No developer, planner, or bank should ever get involved in a golf development that does not use an architect. A Golf Research Group study comparing the economics of courses that used golf architects, versus courses that did not use an architect found that the courses that used golf architects brought in almost three times the revenue. Golf architects are worth every penny. A few of the high profile architects can charge a million dollars but there are many highly talented architects that charge a fraction of this. Never get involved with building a golf course if a golf architect is not doing the design.

5. Over investment.

Another great way to shoot your self in the foot before the course even opens is to spend too much constructing the course. Many developments spend far more than they have to. The thinking that throwing more money at the project will guarantee a great course is not correct. Van Gough did not use more yellow paint than other painters when he painted his famous sun flowers, he just put the yellow paint in the right place. The right budget in the hands of a skilled golf architect will give a great course.

6. Build Properly.

It often happens that huge sums are spent on big lakes, fancy bridges, vast clubhouses while budgets are cut on the fundamentals of green and tee construction and drainage. A danger with golf construction is that most of the money, most of the construction quality, disappears under the ground, under the grass. The course can look great but cutting corners comes back to bite later with eighteen greens that need rebuilding or a course that is out of action for long periods due to flooding.

7. Good Drainage.

Kind a of a repeat of the previous point but so important that it is worth pulling out on its own. A famous architect of the past once quipped that “golf architecture is 90% drainage and 10% inspiration. If one is short of inspiration just add more drainage.” A poorly drained course will never be a commercial success, partly this will be due to many days play lost due to wet conditions but also word gets around with the golfers that the course drains badly and they just don’t come. Who wants to play in mud? One constantly hears the landowners say “I’ve been farming this land for years, it’s free draining.” Golf needs a lot more drainage that farming. People don’t like spending money on drainage as its expensive, its boring, and you can’t see where your money went, but a well drained course is the foundation of commercial success in the golf business.

8. Cost Over Runs.

Amazingly a recent study showed that on average construction costs for the golf course ran 30% over budget. This really should not happen. Courses can be built to budget by having a golf architect who creates accurate working drawings. Pay the money for a high quality topographic survey. Build the course to the plan, don’t start changing your mind during construction.

9. Small Clubhouses.

Whenever you see a business plan that shows more money being spent on the clubhouse that on the course you are looking at a problem. Whenever you meet a developer who spends more time telling you about the clubhouse than the golf course you are meeting a problem. Clubhouses very seldom make money. They usually loose money. Large clubhouses loose a lot of money. Keep the clubhouse as small as you possibly can, 6,000 to 7,000 sq ft is about right.

10. Share In The Surrounding Value.

The big operators will tell you that making money out of golf is about chasing the pennies. The really big money that golf brings is the raised real estate values around the golf, either for houses, hotels or office parks. If you are going to build the course make absolutely certain that you share in the value that you have created around your course. Never be caught in a situation where you have spent all the money to build a great course but someone else makes all the money by selling the houses that look out over your great course.

This article first appeared in the Institute’s Yearbook for 2005-2006.