In the latest of our series looking at The Price of Club Golf, we consider the running costs of the thing that matters most – those fairways and greens
This article is part of GCMA Insights – topical content for golf industry professionals, discussing the things that matter to those who work in golf clubs.
There’s the clubhouse, the food and beverage, even the driving range. But for most of us, the main reason we join a golf club is for the course.
It’s by far the biggest asset and it won’t surprise you to learn it’s also the biggest cost. But what do the numbers look like? How much of a club’s income, and how much of its turnover, goes into making sure those precious fairways and greens are the best they can be?
Earlier in The Price of Club Golf series, industry consultant Kevin Fish revealed almost 50 pence in every pound generated by a club is spent on the course – with the vast majority of that on salaries.
“It’s pretty labour intensive out there!” he said.
But let’s try and break down those numbers even further. Richard Penley-Martin, general manager of private members’ club Denham, said it cost the Buckinghamshire facility a basic £1.3 million to open the doors – to prepare the golf course and get the clubhouse open.
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That’s before considering staffing, maintenance, and other costs. How do those figures break down for the golf course?
“The cost of materials for the golf course is about 10 per cent of our turnover and that’s without doing any special projects,” he explained.
“That’s just the day-to-day stuff – keeping the machinery going, putting new chemicals on the course, buying new course furniture and all those intangibles that you’ve got.
“Salaries are probably about 15 per cent, so 25 per cent of your cost is just providing the golf course.
“That’s without buying any machinery. Our 10-year rolling replacement programme for course machinery is £1.5 million. Effectively, you’ve got £150,000 worth of capital you are having to put aside, or spend, each year, just to keep your top-notch machinery fleet going.
“You can do it cheaper and, in the past, we did. You’d buy a machine and run it until it finally broke or became non-economic to run.
“But [with] member expectation and visitor expectation, if they’re paying top dollar for a green fee they want the course the best it can possibly be. You can’t do that if you’re not getting a clean cut from your machines or you’re not cutting frequently enough because one is broken and you’ve not got a replacement.”
Denham carry out their own grinding, but don’t have a specialist mechanic – shelling out anything up to £70 to £80 an hour when they are required. Penley-Martin estimates the cost of maintaining the fleet is around £30,000 a year.
With aggregates such as bunker sand and sand for topdressing surging in price in recent years, the club have also spent close on £1 million on a project to rebunker the course and to line those traps.
“We’ve lined the bunkers because we’re on a gravel soil. So to stop the gravel coming into the bunkers, causing inconsistency and contamination, we’ve lined the bunkers – which is why it’s cost us nigh on a million pounds.
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“But a great advantage for lining the bunkers is that we won’t need to replace the sand as frequently as we were before when it was getting contaminated.
“Hopefully we will see in the long term a cost benefit because we’re not having to pay a lot of money for aggregates.”
A further course cost which must be accounted for, Penley-Martin explained, is depreciation.
He said: “If you’re running along like we do, you’ve probably got somewhere between £150,000 and £250,000 of depreciation that you have to allow for each year.
“That’s reinvesting back I the club and it’s where a lot of clubs sometimes let themselves down because they’ve tried to save money by not doing that.
“Part of it can be on machinery but, equally, it could be the fabric of your buildings. You don’t reinvest in the buildings and then, suddenly further down the line, you have to invest a whole bunch of cash to get the fabric back to decent condition.
“You’ve got to spend a lot more than you would do if you’d just been drip feeding your maintenance in as you’ve gone along.”
This article is part of GCMA Insights – topical content for golf industry professionals, discussing the things that matter to those who work in golf clubs.
Get involved in the debate. To join the GCMA, click here, or to organise a call with a member of the GCMA team, just complete this form and we’ll be in touch!
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