This is not a new conversation by any means. It has been a misconception for a long time that golf courses make a lot of money. Many golfers believe that because golf is seen as an expensive sport all golf courses are raking in big money. The sad truth is that very few golf courses make a profit. Many barely cover expenses and salaries while some actually may lose money each year.
The average cost to operate a golf course annually is about $500,000 on the low end for public daily fee facilities to around $2 Million for exclusive private facilities. These numbers include salaries, hourly employees, utilities, equipment expenses, and the golf course maintenance budget. The maintenance budget itself covers the cost of everything in that department. The equipment, fertilizers, and employees' wages. On average a golf course maintenance budget is around 60% of the total budget for a golf course. The higher the budget, the more employees that can be hired and the better the conditions can be.
It is believed by many golfers that the green fees are where golf courses make profits. Golf courses almost lose money from the green fees. Where golf courses really make their money is from the food and beverage sales and events such as weddings. Tournament outings are also a big part of where golf courses make money as there is a minimal amount guaranteed but those events usually make up for days a golf course gets no play from things such as bad weather.
If a golf course charges $50 for a round of golf they probably operate on a $2 Million a year budget. About 75% of that covers everything except the maintenance budget. That leaves $500,000 for maintenance. That may seem like a lot but it actually isn’t. A typical “tour quality” private club has a maintenance budget of around $1.2 million annually. A good resort golf course is in the range of $800,000 annually. The higher the budget for golf course maintenance the better the quality of the conditions. This is usually achieved by the residual income of membership dues. A public fee golf course would have to do 40,000 rounds annually just to break even on a $2 Million budget. When you consider most courses average 30,000 rounds annually after you consider bad weather and other factors that lead to no play on a golf course for any given day most public golf courses are operating in the negative.
When we see prices at a golf course we can usually determine the conditions by the price. Under $40 you expect ok playable conditions, $50 - 80 we can usually expect good conditions with good greens, and over $100 we can expect near-perfect and well-maintained conditions. Many times those higher green fee courses also come with extra amenities such as a bag drop attendant, complimentary bottled water, and good practice facilities. You can also usually expect more in the food and beverage area such as full menus and a restaurant-like atmosphere. That is where the higher-end golf courses make up the biggest differences from the lower end. They offer more for golfers to pay for and it is those costs that sustain the golf course.
This is where the question, Should Golfers Spend More Money When Playing Golf?, comes to play.
Golfers should be more mindful and spend money in the pro shop or grill any chance they can. This means don’t bring your own food or drinks to a golf course but buy them there. This should especially be done when it comes to alcohol. Many golfers do not realize the biggest reason golf courses say no outside food and beverages. This is mainly meant for alcohol. If the State Board where the golf course is located came onto the property for an inspection and someone is caught with any type of alcohol not sold at that golf course, the golf course can lose its liquor license.
If we all spent an extra $10 each time we played golf, whether it is for a sleeve of golf balls or a few bottles of water, it would go a long way in helping those golf courses operate and maintain the playing conditions. When we have good quality playing conditions we enjoy our round of golf that much more.
Note: There are some exceptions to this. Such as golf courses that charge over what they are worth, or have rude staff that does not treat their guests well. Although there are not many, those golf courses do not deserve our business.
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