The etiquette and unwritten rules that are followed from shaking hands after each round and staying clear of your playing partners putting lines teaches respect and manners.
Arguably, it all ultimately comes down to one’s opinion on the sport.
Golf Management Companies and Golf Course Financing
Hiring a golf management company is a debatable topic. While others would argue for hiring one, others will not. For a major hotel, with chain hotels and annual sales over $2 million, it can afford the luxury of hiring a golf management company, but if a hotel earns less than this it is bound to lose.
Management fees run monthly from $6000 to $12,000 and from $72,000 to $144,000 annually. These are added expenses coupled with paying the site manager and other ‘out-of-pocket’ expenses that golf management companies will bill.
Before Hiring a golf management company, there are key things to consider:
1. Identify the Problem
If the board members at equity clubs has struggled to find the right General Manager committed in self-managing the club; then hiring a management company like Kopplin and Kuebler is a logical step.
If the board is grappling with questions on whether to outsource the managerial function to third parties or continue to hire and supervise the GM position; then interviewing third party management companies is a logical step.
It saves the board in the purchasing realm. Those savings can then be used for some of the monthly management fees or in professionalizing the entire club operation.
2. Solve Debt Issues and Capital projects separately
Debt issues are not uncommon in the private club business in America. The golf course financing market had been stable for 15 years until the economic crash of 2008. The market had two lending reliable sources; the national golf-specialty lenders and the local banks.
After the 2008 economic crash, repercussions on the golf financing market were manifold. The golf-specialty lenders went away while the local banks curtailed privately owned golf clubs as they did not have the historical financials to support a loan.
Debt issues and capital projects are classic balance sheet funding matters. When detailing membership issues and clubhouse renovations; discussions on their ongoing interviews with their third party managers begin. If the debt is more than 50% of the revenues, the club needs equity support.
Current Situation
Following the recession and economic crash, banks have left the golfing sector. There remain less golf course financing options.
The private-club market is in a precarious position. Some clubs won’t make it on their own while some are suitable for non-equity conversion so long as a well capitalized owner-operator is willing to purchase and pay the debts.
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