Top-Tier Nonprofit Golf Clubs See 11% Increase in Revenue

By | April 18th, 2018

A report by The Business Journals found that nonprofit country clubs with at least $10 million in annual revenue saw combined revenue rising over the past three years, while membership dues were up 6% and cash on hand increased by 14%.

The Business Journals analyzed federal employment data for 449 U.S. counties and found that the golf sector’s challenges are national in scope, spanning from California to the Carolinas, the Greensboro, N.C., Triad Business Journal reported.

Between 2005 and 2015, the number of golf courses and country clubs tumbled by 5%, falling to 6,242 from 6,541 a decade earlier. Over the same span, the number of people employed by courses and country clubs in those 449 counties fell by 3% to just over 226,377 workers, the Business Journal reported.

But not everyone is suffering. The Business Journals also reviewed tax data for 55 nonprofit country clubs with at least $10 million in annual revenue—ranking them among the wealthiest 1% of golf courses in America—and found that despite the industry’s troubles, the rich are getting richer. According to tax filings, the group’s combined revenue was up 11% over their most recent three years of reporting. Membership dues were up 6%, while cash on hand had increased 14%, the Business Journal reported.

The nation’s largest nonprofit club by revenue, the Boca West Country Club in Boca Raton, Fla., maintained steady growth through 2015, growing its top line 5% over a three-year span to $47.1 million, according to its latest-available tax filings. Boca West also reported a 2% increase in headcount during that same period, ending 2015 with 1,095 employees, the Business Journal reported.

Greensboro (N.C.) Country Club, the largest nonprofit club in the Triad, saw its revenue climb 6% to $14 million in 2015, the most recent year reported on a 990 filing. Greensboro Country Club and others have gained traction largely by adding amenities and activities that appeal to entire families, rather than the traditional golfer alone, the Business Journal reported.

C&RB feature Greensboro CC in its October 2009 cover story.

Among the top 55 courses analyzed nationally, all but nine reported revenue increases over the course of their three most-recently published tax filings years. And all but 12 courses added employees during those same periods, the Business Journal reported.

Jeff Woolsen, managing director of CBRE’s golf and resort group said that with course participation slipping in recent years, the growth among wealthier clubs often is a zero sum game for the rest of the sector. “You’re not really creating new members. You’re stealing from other clubs.”

Among clubs that are growing, many have expanded membership through investments in new amenities such as recreational pools and exercise facilities. Woolsen cautioned that those efforts, which can require significant borrowing, can also force courses into a “death spiral” that makes them an easy target for a buyout, the Business Journal reported.

A primary stress for those clubs is often long term debt, which totaled around $491 million, or $9 million per club, among the 55 wealthiest courses analyzed by the Business Journals.

Combined with the industry’s demand challenges, the extra debt can prove unsustainable for some courses. “We usually get a call from a club looking to sell when revenue drops below $3 million,” Woolsen said. With fixed costs so high, it’s hard to make money if you’re below $3 million.”

Stuart Lindsay, principal of Edgehill Golf Advisors in Milwaukee, said one reason nonprofit clubs have avoided some of the challenges municipal and for-profit courses have faced is that member-owners are “playing with their own money,” the Business Journal reported.

“Members are willing to pay a general manager to ensure the club is well managed,” Lindsay said.

Member buy-in also helps to stave off the growing competition from entertainment-oriented options such as Topgolf, the Business Journal reported.

One Response to Top-Tier Nonprofit Golf Clubs See 11% Increase in Revenue

  1. david harrington says:

    It is quite confounding that clubs with high annual revenues are non profit! Wondering if you mean not for profit?

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