‘The worst is over for most golf clubs’

Alistair
By Alistair June 17, 2015 02:16

The director of an organisation that markets golf clubs to potential buyers has said that the worst of the financial problems that has beset the industry has come to an end.

Golf clubs have struggled since the financial crash in 2008, with many unable to raise revenues for vital improvements, which in turn has seen their membership numbers drop dramatically. This has coupled with a general fall in participation in golf, which has seen several clubs go out of business and many more teetering on the brink. Furthermore, several struggling clubs have been criticised for having an unprofessional culture that has contributed towards their downfall.

However, Ian Simpson, director of Savills Oxford, has said the worst is now over for the industry. Simpson said that an upturn in leisure spending, an increase in farmland prices and changing planning regulations mean there are new options mixed with new optimism for golf clubs.

“Although it is too early to predict potential growth and turnover, we believe that for many clubs the most challenging years are likely to be behind them,” he said. “Upturn in spending is apparent and likely to translate into increased leisure spend, although the difficulty for many remains having the spare time for leisure activities such as golf.

“Even at the lower end of the market, there is reason for optimism, with the market remaining underpinned by alternative use values. National farmland prices on average are now close to £10,000 per acre and therefore the number of courses reverting to pasture land on sale is likely to rise in coming years. This is particularly the case in more remote areas where populations are low, as well as in better locations where too many courses were developed in the boom years of the 1990s.

“For those clubs which are fighting for existence, the difficult decision is whether to invest further or cut the losses. Where income is stagnant or falling, clubs may consider redevelopment of certain assets or expansion of their existing property. National planning policies are evolving to enable more development in some areas, which may assist owners with redundant clubhouses and unused farm buildings.

“Where sites are tight for an 18-hole course, there may be scope for a redevelopment or rearrangement of the layout to create a more challenging course of nine holes and using part for another use such as a practice area, perhaps funded through land-filling. This is a bold move however, as it can mean much disruption to play and loss of earnings for that period.”

Simpson added that the growth of alternative golf courses is also helping the industry.

“If a full-scale redesign is not something that would fit on a particular property then there is potential to consider enterprises on the course such as FootGolf and DiscGolf,” he said.

“There are now nearly 12,000 registered FootGolfers and an increasing number of centres for them to attend. Golf businesses can allocate block time slots to take advantage of the opportunity without having on-course conflict between golfers and footballs – particularly given the differing sizes of the pin!”

 

Alistair
By Alistair June 17, 2015 02:16

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