Last Update :4/10/2017

Pellucid Perspective - What's Next for Underperforming Golf Courses?


Volume 16 • Number 3


What's Next for Underperforming Golf Courses?

Following on the heels of our State of the Industry outlook of a short period of rounds stabilization (basically following weather), there remain a minority of US courses which aren't financially viable at the status quo but have resisted going under as they seek either a buyer or a great year to save them.  The $64,000 question is, "What happens to this group of courses in '17 as the golf economy crabs sideways, monetary policy shifts toward higher interest rates and all that's left in expense reduction is essential services?"

In this issue I'll take a look at potential outcomes for these underperforming courses as the immovable object (lack of rounds/revenue improvement) meets the irresistible force (paying the bills and covering debt): 

  • How do you determine if underperformance is operational-based or market-based?  You can fix or potentially sell against operational deficiencies but market-based maladies provide little relief or options (outside an emotional or uninformed (or both) buyer)
  • Operational self-preservation - This would involve significant reductions in expenses which would impact conditions and customer experience and riding the rounds/revenue decline downward hoping that a 20-30% budget reduction only produces a 10-15% reduction in rounds/revenue (existing examples in Canada as well as US Consumer Products, Fast Food and Alcoholic Beverages industries)
  • Resign yourself to the firesale transaction - My impression is that this hasn't been more prevalent because the banks/lenders have had the benefit of near 0% money vs. running a golf course.  When the cost of money rises to something above 0%, their interest in flexible financing will change and "extending the bet" as an option will diminish significantly
  • Walk away/foreclosure -  Absent even a firesale buyer (yes, some market situations or course locations are this dire), much like homeowners in the housing market meltdown post-'08, there will be some number of owners who will have no viable option but to walk away and/or some lenders will make the tough call to not extend their bet

The impact on the golf industry as a whole in the above will likely be minimal and long-term beneficial.  At the market level and for some number of owner/operator/lender entities however, there will be pain and "someone has to pay" for the intersection of too much, wrong type, wrong location supply and a return to more normal US monetary policy.  I wish I could tell you in advance where that was going to be and who's likely to be on the short-end of that stick but my crystal ball isn't that clear.  There are measures and tools that would help us better predict it than today and those would help both buyers and sellers make more-informed decisions but, absent any meaningful progress there in '17, we're pretty much all on our own to figure this out.

For our subscribers, read on for my take on the supporting fact and color commentary.  For our Executive Summary recipients, you can get the rest of the story one of three ways (all can be previewed and purchased at Pellucid's website (

  • Subscribe to the Pellucid Publications Membership for $495/yr.  Annual subscribers get access to all Pellucid publications (Outside the Ropes monthly digital newsletter, annual State of the Industry report portfolio (PowerPoint presentation, PDF commentary report, access to video of Orlando presentation), monthly Geographic Weather Impact Tracking (US, 45 regions, 61 markets), Top 25 US Golf Markets Ranking Scorecard (25+ dimensions and ranking for largest 25 markets) and the National Consumer Franchise Health Scorecard (expanded data and tables underlying this issue's summary figures)
  • Subscribe to OtR, 12 monthly issues for $130/yr with a money-back guarantee if you're not satisfied at any time during your subscription.  Subscribers also get access to the historical archive of past issues (50+) via the members-only section of the Pellucid website.
  • Purchase single issues (including this one) for $14.95 per issue; click here to view available issues by title and select those of interest to purchase and download.

Pellucid Corp |

unsubscribe from this list


[ More News ]

Join NGCOA Mid-Atlantic - Great Membership Benefits!

National Golf Day - 2023 - Outside the Box

Golf Course Acquisition Opportunity - Country Club of Otterkill (NY)

Debt - The (not so) Silent Club Killer

The Cost of Golf - Is it $ustainable?

National Golf Day Registration Open

​Private Club Governance & Management - Defining Roles

Virginia Golf Colleagues Mourn the Loss of Paul Michaelian

NCA Webinar on Your Club's Real Estate Tax Assessment

Golf Property Analysis & Valuation - 2nd Edition Now Available

Erik Larsen incorporates traditional elements into St. Johns (FL) Golf Course to Rave Reviews

Choosing the Best Management for Your Club or Golf Course

Measuring Performance, Selling Solutions, Clubs, Fraud & a Hotline, & The GPA Practice Tee

Fall Issue of Mid-Atlantic Golf Business Newsletter Joint with NC GCOA - Click Here to Read

Register for the 2022 NGCOA MA Annual Meeting, November 2

Selling in Uncertain Times - Develop a Strategy

Just Listed by Hilda W. Allen Real Estate, Inc.

Some Reponse to Why Clubs are Closed on Mondays

Save the Date NOW for Golf Business Conference 2023

Summer Issue of Mid-Atlantic Golf Business Newsletter Joint with North Carolina GCOA - Click Here to Read!

Golf Property Analysts - Private Club Planning, Golf as it was meant to be, Is It Time to Sell?

A Consumer/Culture Based Approach to Private Club Planning

Transparency at Private Clubs

The Golf Pro Crisis & Its Impact on Clubs

Golf Property Analysts - Your Club's Tax Assessment

Hilda Allen - the source for golf course sales and advising owners

NGCOA Mid-Atlantic Annual Meeting Set for Nov. 2 at Independence GC in Richmond

Fairfax County Park Authority seeks Golf Course General Manager

Announcing Facility BMP Virtual Workshop and Prize Contest

Another Beautiful Listing by Hilda Allen Real Estate!

Just Listed by Hilda Allen - The Frog GC in Georgia, a Fazio Design

National Golf Day 2022 - Information and Registration

Mattaponi Springs Golf Club in Ruther Glen, VA Seeks General Manager

Larry's Interview on TurfNet Renovation report Podcast

Golf Leagues - A Lightspeed Guide to Growing Business

Register your course for Women's Golf Day - June 7th

Download the Pellucid Presentation at the Annual Meeting

Golf Property Analysts - Time to Sell?

New Listings and Recent Sales from Hilda Allen Real Estate

Hanover Golf Club sold to unidentified local buyer

Club Master Planning - A Market Based Approach

January Abstract OtR: '21 Sol Scorecard is 6 birdies, 2 pars!

Damon DeVito Named the 2021 Mid-Atlantic Golf Leader

Golf Course Acquisition Opportunity - Maryland - For Sale By Auction

Sep Weather, Aug Util; steady, solid results against strong "20 comps"

Employee Retention Tax Credit May Save You Thousands $

Glenwood Golf Course redevelopment gets planning commission approval

Google's New "Local" Ads Provide Big Advantages to Golf Courses

The Appraisal Journal - Valuation of Private Clubs for Tax Assessments

Morning Read and Sports Illustrated Announce Editorial Partnership

Is it Time to Review Your Golf Property Tax Assessment?


Join Our Email List