[Ken Moum]

That being the case, I'm going to go with my original thesis.
F&B and lodging are revenue centers, not profit centers

In my experience, all the people who think private club F&B is a profit center fail to include significant portions of the fixed cost in their calculations.

At my club there are a 10-12 people who have been involved with management or the board who firmly believe that, "Food and beverage subsidizes the golf course."  As a consequence, the place was taken by the bank and now belongs to a new owner.

Their calculations of F&B profits never included any of these costs:  The cost of owning and maintaining dining room and kitchen; Insurance; Real estate taxes; utilities, etc., etc.

I would imagine that any restaurant owner who was given a free building with no utility bill would find his bottom line enhanced considerably.

[Tim Martin]

Nope.  We don't allocate overhead (taxes, Insurance, energy, etc) over F&B and lodging so there is more than just the course left.

That being the case, I'm going to go with my original thesis.
F&B and lodging are revenue centers, not profit centers

Jeff,

Go with me sometime to Dismal and I can show you how Food and Beverage becomes a profit center. Now I consider this a good thing, but somebody ain't gonna make it home one of these days.  I thought we lost my Amish buddy earlier this year.

note:  When you are over 50 and on a buddy trip if there isn't a shot a dying you may as well stay home.

Can you see all the wives pulling out the life insurance policies making sure that the premiums are paid before their husbands get on the "Highway to Hell" bus to take them on the golf trip of a lifetime. The Last Straw With Kavanaugh buddy trip would of course have a betting line in Vegas with odds varying from how many return to how did they meet their maker. Kav-please send me the itinerary because I`m in my fifties and I`m sick of playing it safe.

[Morgan Clawson]

Simply brilliant Tim!

"Can you see all the wives pulling out the life insurance policies making sure that the premiums are paid before their husbands get on the "Highway to Hell" bus to take them on the golf trip of a lifetime. The Last Straw With Kavanaugh buddy trip would of course have a betting line in Vegas with odds varying from how many return to how did they meet their maker. Kav-please send me the itinerary because I`m in my fifties and I`m sick of playing it safe."

[jeffwarne]

Nope.  We don't allocate overhead (taxes, Insurance, energy, etc) over F&B and lodging so there is more than just the course left.

That being the case, I'm going to go with my original thesis.
F&B and lodging are revenue centers, not profit centers

Jeff,

Go with me sometime to Dismal and I can show you how Food and Beverage becomes a profit center. Now I consider this a good thing, but somebody ain't gonna make it home one of these days.  I thought we lost my Amish buddy earlier this year.

note:  When you are over 50 and on a buddy trip if there isn't a shot a dying you may as well stay home.

John,
That indeed is a scary thought....
But if the bar opens at 8 am,you're on.
Typically I come close to death on buddy trips, but usually closest about my third day home.....
but then I'm not quite "over" 50 yet.

[Tim Martin]

Nope.  We don't allocate overhead (taxes, Insurance, energy, etc) over F&B and lodging so there is more than just the course left.

That being the case, I'm going to go with my original thesis.
F&B and lodging are revenue centers, not profit centers

Jeff,

Go with me sometime to Dismal and I can show you how Food and Beverage becomes a profit center. Now I consider this a good thing, but somebody ain't gonna make it home one of these days.  I thought we lost my Amish buddy earlier this year.

note:  When you are over 50 and on a buddy trip if there isn't a shot a dying you may as well stay home.

John,
That indeed is a scary thought....
But if the bar opens at 8 am,you're on.
Typically I come close to death on buddy trips, but usually closest about my third day home.....
but then I'm not quite "over" 50 yet.

Jeff-It is tough to finesse when you get home. If you gush too much about what a great time you had you get dirty looks. If you grumble about things like weather, a bad flight connection or shaggy greens you not only get dirty looks but also "then why did you go?". I like to use the what happens in Vegas stays in Vegas approach hoping only having to disclose that "it was fun". If you think getting your spouse a gift in the airport as a down card is gonna stand up it won`t-they know. You will know all this shit when you turn 50.

[jeffwarne]

Tim,
I wasn't referring to my wife.
Anyone who's met her would agree that I overachieved on that one and that she's got the patience of a saint.
Besides, these are "business" trips .

Day three home is just when all the "business" catches up to me physically.

[Bill_McBride]

That being the case, I'm going to go with my original thesis.
F&B and lodging are revenue centers, not profit centers

In my experience, all the people who think private club F&B is a profit center fail to include significant portions of the fixed cost in their calculations.

At my club there are a 10-12 people who have been involved with management or the board who firmly believe that, "Food and beverage subsidizes the golf course."  As a consequence, the place was taken by the bank and now belongs to a new owner.

Their calculations of F&B profits never included any of these costs:  The cost of owning and maintaining dining room and kitchen; Insurance; Real estate taxes; utilities, etc., etc.

I would imagine that any restaurant owner who was given a free building with no utility bill would find his bottom line enhanced considerably.

Lots of clubs also don't include some full time staff - catering manager, receptionist, etc.   Anything to disguise the true cost (and losses!).

[Dan Byrnes]

Using a basis of 10,000 rounds per year with overnight stay income that offsets the loss on food service. 

I find it hard to believe the accommodation income combined with the F&B could break even with so few rounds.  I haven't seen the place but my understanding is its a first class operation.  Seems to me at 10,000 rounds it's pretty empty most of the time?

Is it open year round or seasonal, I would think that part of Colorado could be year round.

Not counting any return on capital and the assumption of no debt payments, I would find it hard to believe yet could operate the club operations,, maintain the accommodations, operate the F&B as well as operate the accommodations, maintain the golf course in top condition, provide capital for maintanence and upkeep of the entire place for less than 1.5 million?

While I am not familiar with the regional differences to i do have an idea of the cost to operate a run of e mill club in upstate NY not counting debt and return on capital some of the costs I could guess for Ballyneal would be:  these are educated guesses but without having seen it personally I may be off.

Property taxes $30,000. I certainly imagine Colorado is a fraction of that
Property and operational insurances $60,0000
Heat, AC and electric $80,0000
Greens budget including staff.  $500,000 not sure what the course type and regional differences are but that wasn't enough at my club doesn't include any capital improvements, new equipment ect.
Pro staff high quality Pro, at two assistants and bag help, range pickets ect.  $180000
F&B, maintenance staff, house keeping, admin GM $300,000
Walking club so no cart revenue or ownership costs.
Any caddy costs carried by the club?
 
I am over a million already and  haven't accounted for many other things like what seems to me as likely hospitality losses. 

I certainly am not an expert and would be very interested in hearing from other opinions but I can't fathom the break even round cost being less than $150 / round and that is with no debt service or return on capital or profit.

The place had to cost 5 million to build?  Maybe much higher?

Dan

I certainly want to pay the place a visit if it stays alive.

[John Kavanaugh]

Using a basis of 10,000 rounds per year with overnight stay income that offsets the loss on food service. 

I find it hard to believe the accommodation income combined with the F&B could break even with so few rounds.  I haven't seen the place but my understanding is its a first class operation.  Seems to me at 10,000 rounds it's pretty empty most of the time?

Is it open year round or seasonal, I would think that part of Colorado could be year round.

Not counting any return on capital and the assumption of no debt payments, I would find it hard to believe yet could operate the club operations,, maintain the accommodations, operate the F&B as well as operate the accommodations, maintain the golf course in top condition, provide capital for maintanence and upkeep of the entire place for less than 1.5 million?

While I am not familiar with the regional differences to i do have an idea of the cost to operate a run of e mill club in upstate NY not counting debt and return on capital some of the costs I could guess for Ballyneal would be:  these are educated guesses but without having seen it personally I may be off.

Property taxes $30,000. I certainly imagine Colorado is a fraction of that
Property and operational insurances $60,0000
Heat, AC and electric $80,0000
Greens budget including staff.  $500,000 not sure what the course type and regional differences are but that wasn't enough at my club doesn't include any capital improvements, new equipment ect.
Pro staff high quality Pro, at two assistants and bag help, range pickets ect.  $180000
F&B, maintenance staff, house keeping, admin GM $300,000
Walking club so no cart revenue or ownership costs.
Any caddy costs carried by the club?
 
I am over a million already and  haven't accounted for many other things like what seems to me as likely hospitality losses. 

I certainly am not an expert and would be very interested in hearing from other opinions but I can't fathom the break even round cost being less than $150 / round and that is with no debt service or return on capital or profit.

The place had to cost 5 million to build?  Maybe much higher?

Dan

I certainly want to pay the place a visit if it stays alive.

Dan,

Thank you for the amazing post. Just one correction. You will play when it stays alive.

[Dan Byrnes]

I hope that is the case with all the positive things people around here have to say about it I can't imagine a new business plan or financial restructuring doesn't occur but I don't know enough about the details to say.  I wish them the best and as a u of Colorado grad I might consider a national type of membership for myself.

While farmland has been rising significantly in value I can't imagine with all the money already sunk in that anything but a golf course makes sense?

I look forward to hearing about its resurrection.

Dan

[Jud_T]

Dan,

Food, Beverage and Lodging are a necessary evil in such a remote locale, although I agree the chances of it being a profit center are slim to none.  I'd take the over at 5mm and give odds...It all comes down to what they paid for the bank note...

[John_Cullum]

;,;

[Dan Byrnes]

Dan,

Food, Beverage and Lodging are a necessary evil in such a remote locale, although I agree the chances of it being a profit center are slim to none.  I'd take the over at 5mm and give odds...It all comes down to what they paid for the bank note...

I assume based on location the members who are not local encamp there on visits and spend, just seems based on 10,000 rounds there just is not enough of them  on a day to day basis to generate enough revenue.  10,000 rounds is only 27 people 365 days a year.  Not going to be able to sustain a upscale lodging or any significant F&B on that amount of trafic.  Out of the 10,000 rounds how much is day triping locals or within 2 hour members?

If the lodging was always filled to capacity that would change things quite a bit.  Of course on the the over 5 million there isn't much chance for the place to provide any return IMHO.

I know it has been viewed in bad taste  to discuss the particulars as I am guessing some of the GCA brethren are involved with the place beyond members?  I just always find the knowledge interesting and potentially educational.

So I don't know enough about the building of the place nor original business plan but as you mention it's now all about what the asset/note is now costs after the restructuring.  That provides a new opportunity to keep the same business plan with much less debt or devise a new business plan.

I had discussed in other threads that there is only so much potential customers for such a remote golf course membership and several were already established before this one was built and to the best of my knowledge remain strong but as a later arrival and in a difficult economic environment even though it's a wonderful place by all accounts makes it tough to make it.  I wonder if they could have the large number of national members type of thing at a reasonable dues level as opposed to a high initiation and high dues limited membership business plan.

I hope they make it and have a great future.  I look forward to hearing the new plan!

Dan

[Tom_Doak]

Dan:

I have never seen the balance sheet, but I do not think that Ballyneal or Dismal River has ever received 10,000 rounds of play in a year to date.  I'm not even sure that Sand Hills has.  There are days out there where you can play in nearly every month of the year, but I believe that Sand Hills Golf Club is only open from late May through early October -- five months max.  The rest of the year, it costs more to staff it every day than you'd generate in revenue on average.

All of these clubs can only exist because there are a group of people passionate enough about the golf to want to subsidize their existence.  It is a somewhat hardscrabble existence ... but such is life in the sand hills.  And that's a beautiful thing.

Thank God for the people who have supported these clubs.  They're all special places, and I'm confident that they will all somehow continue to exist.  But it wouldn't hurt for a few more passionate people to go ahead and join them!

[Jim Nugent]

Is Ballyneal open for play? 

[Jay Flemma]

It would be really helpful if you could provide the per round cost at Dismal River.  Nice to have more than one data point.


Not sure what the proper emoticon is for sarcasm.  The topic of destination course operational costs may be interesting discussion, but targeting a specific private club as an example does not seem appropriate.

I would guess the cost per round at Dismal to be around $500.

Isn't $500 just too much?  Is a round at Dismal really worth that?  I thought it was overpriced when I played it.  It was a $350 day for me.  That's not egalitarian...

[Tom_Doak]

Isn't $500 just too much?  Is a round at Dismal really worth that?  I thought it was overpriced when I played it.  It was a $350 day for me.  That's not egalitarian...

Jay:  It's completely egalitarian.  Everyone has to pay a lot.  If there are not enough people who value the experience and can afford it, then there will be problems.

But, let's think for a minute.  How much did you pay just to arrive at the door of Dismal River?  Did you fly from NY, and rent a car in Denver?  What did that all cost?  Considering those costs, the per-round rate is actually higher ... but the more rounds you play, the more sense it makes.

[Sean_A]

As Tom states, these sand/chop hill courses are about passion on the part of golfers, builders and owners.  While money is always important it is a secondary consideration in these cases as I expect folks are just looking to get by.  I think the model is a bit unusual in that getting by is usually associated with modest courses of which few are of any interest to the sort of folks we are talking about in Nebraska and Colorado.  Its a roll of the dice model in the hopes that world class golf will be enough to sustain clubs which on the surface have no business ever being built.  I find this sort of model immensely appealing, unfortunately, even if I were in a position to geographically take advantage, I highly doubt  would.  I fear that like me, too many folks would look at the set-up from a realist (what the heck is the golf costing me per game and is this where I want to spend all my golf holidays?) PoV rather than from a passionate PoV, but then the folks involved in these organizations knew from the start that over-coming this attitude was the key to success. 

On a flip note, it is interesting to try and compare some of the remote UK courses (Machrie & Askernish) which may not be of the same quality in terms of golf, lodging and services as the Neb/Col clubs, but are very special places and in a true sense trying to get by -  with mixed results.  These are far cheaper options to buy into and I suspect far cheaper to actually get to for most in the UK compared to most of this in the US trying to get to Neb/Col.  Yet, we see them struggling.  Is there a happy medium between the two models which would be more attractive for more golfers?

Ciao

[John Kavanaugh]

It would be really helpful if you could provide the per round cost at Dismal River.  Nice to have more than one data point.


Not sure what the proper emoticon is for sarcasm.  The topic of destination course operational costs may be interesting discussion, but targeting a specific private club as an example does not seem appropriate.

I would guess the cost per round at Dismal to be around $500.

Jay,

Isn't $500 just too much?  Is a round at Dismal really worth that?  I thought it was overpriced when I played it.  It was a $350 day for me.  That's not egalitarian...

Jay,

Of course no one actually pays $500 per round.  Chris subsidizes the member, the members subsidize their guests.  Put on your big boy pants and do some math.  You've been to Dismal, figure what you think it costs to keep that place open for a year and divide it by the number of rounds you feel are played.  That is the cost per round I was looking for.

Now it is my understanding that after you overpaid at Dismal you went over to Sand Hills and asked to play there.  They did not have room that day but still allowed you to go take in a view from Ben's porch.  I doubt if they charged you for that privilege and ate the costs of providing you the infrastructure you took advantage of that day.  Even though you didn't play you were subsidized by the members of Sand Hills during your visit.

One more thing,

I'm going to go to Dismal three or four times this year for lets say a total of ten playing days. Would anyone really expect my dues, lodging, food and beverage to be less than $5000 for the year?  Now you guys may be shocked but who wouldn't pay $5000 a year to be a member of Sand Hills if that included golf, food and beverage and lodging?  It's actually not that bad of a deal.

For a guy like Jay, who I understand doesn't own a car, I think it is like paying $2.50 per mile to take a cab.  Everyone knows that $2.50 a mile it is to much for transport by car but it is there when you need it and fills an important void in your life. 

[Chip Gaskins]

It would be really helpful if you could provide the per round cost at Dismal River.  Nice to have more than one data point.


Not sure what the proper emoticon is for sarcasm.  The topic of destination course operational costs may be interesting discussion, but targeting a specific private club as an example does not seem appropriate.

I would guess the cost per round at Dismal to be around $500.

Jay,

Isn't $500 just too much?  Is a round at Dismal really worth that?  I thought it was overpriced when I played it.  It was a $350 day for me.  That's not egalitarian...

For a guy like Jay, who I understand doesn't own a car, I think it is like paying $2.50 per mile to take a cab.  Everyone knows that $2.50 a mile it is to much for transport by car but it is there when you need it and fills an important void in your life. 

Very good analogy John.

[C. Squier]

These threads should be banned. Calculating cost per round at any club (especially national memberships) is a great way to ruin someone's fiscally responsible day. The good news is, there is no better feeling than the drive into your destination club after a long absence.

[Jud_T]

I'm guessing Colton isn't paying $500/round.  It all comes down to your own utility function.  There are guys who will happily pay $5000/year just to say they belong and might get out once a year for a couple rounds and there are guys who live far away who get 50+ rounds/year in.  It takes a village.  Funny how $400 per round at a local upscale club is no big deal but somehow it's an abomination when you only get a dozen rounds a year in on a couple visits to a National Club.

[Jay Flemma]

Isn't $500 just too much?  Is a round at Dismal really worth that?  I thought it was overpriced when I played it.  It was a $350 day for me.  That's not egalitarian...

Jay:  It's completely egalitarian.  Everyone has to pay a lot.

Now Tom, that's a backwards argument.  Just because something is expensive to everyone doesn't mean we have to accept it.  If we took that argument to a further extent, there's be a lot less people playing golf than now because it's to expensive.

As for that trip, it was a week of golf in CO/Neb w/ friends so costs were somewhat amortized, but excepting one course out of the 9 we played, the next most expensive round that trip was something like $65-$75...and Dismal isn't 5x better than most other other courses I've played anywhere, let alone on that trip.  Is it a good place, of course, but that price point is too high to be egalitarian and promote the game to the masses.

[Jay Flemma]

It would be really helpful if you could provide the per round cost at Dismal River.  Nice to have more than one data point.


Not sure what the proper emoticon is for sarcasm.  The topic of destination course operational costs may be interesting discussion, but targeting a specific private club as an example does not seem appropriate.

I would guess the cost per round at Dismal to be around $500.

Jay,

Isn't $500 just too much?  Is a round at Dismal really worth that?  I thought it was overpriced when I played it.  It was a $350 day for me.  That's not egalitarian...

Jay,

Of course no one actually pays $500 per round.  Chris subsidizes the member, the members subsidize their guests.  Put on your big boy pants and do some math.  You've been to Dismal, figure what you think it costs to keep that place open for a year and divide it by the number of rounds you feel are played.  That is the cost per round I was looking for.

Now it is my understanding that after you overpaid at Dismal you went over to Sand Hills and asked to play there.  They did not have room that day but still allowed you to go take in a view from Ben's porch.  I doubt if they charged you for that privilege and ate the costs of providing you the infrastructure you took advantage of that day.  Even though you didn't play you were subsidized by the members of Sand Hills during your visit.

One more thing,

I'm going to go to Dismal three or four times this year for lets say a total of ten playing days. Would anyone really expect my dues, lodging, food and beverage to be less than $5000 for the year?  Now you guys may be shocked but who wouldn't pay $5000 a year to be a member of Sand Hills if that included golf, food and beverage and lodging?  It's actually not that bad of a deal.

For a guy like Jay, who I understand doesn't own a car, I think it is like paying $2.50 per mile to take a cab.  Everyone knows that $2.50 a mile it is to much for transport by car but it is there when you need it and fills an important void in your life.  

John Kavanaugh, I MOST CERTAINLY DID NOT ask to play Sand Hills.  We finished at Dismal and Adam drove me over so we could have soda on Ben's porch and that's it.  And of course I own a car.  Where do you get these ridiculous lies? (Let alone believe them).  As you can see everyone, the gossip going around is nothing more than BS.  If you believe half the crap these trolls say about me, then you probably believe 4x the amount that's actually true.  There's no low they won't stoop to in order to try to suppress my participation on this BB.  John, Please do not spread rumors that are flat-out not true.  In this case, you should be more ashamed of yourself than usual, but knowing you I won't expect it.  I'll tolerate your being a rakehell , but I won't tolerate your lying about me. It sure must be nice never having to grow up.

[Jim Colton]

I'm guessing Colton isn't paying $500/round.  It all comes down to your own utility function.  There are guys who will happily pay $5000/year just to say they belong and might get out once a year for a couple rounds and there are guys who live far away who get 50+ rounds/year in.  It takes a village.  Funny how $400 per round at a local upscale club is no big deal but somehow it's an abomination when you only get a dozen rounds a year in on a couple visits to a National Club.

Throw in my sunk costs and I'm probably close to twice that. Maybe (probably) I'm just a fool, but I'd still say it was worth every penny. Plus I have Tom D's respect. At least I got that going for me.

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