NGF Holiday Island Country Club Review of Operations Prepared for: Holiday Island Suburban Improvement District Presented by Richard Singer Director of Consulting Services National Golf Foundation Consulting, Inc. (561) 354-1642 rsinger@ngf.org NGF - KEEPING GOLF BUSINESSES AHEAD OF THE GAME SINCE 1936 1150 SOUTH U.S. HIGHWAY ONE, SUITE 401, JUPITER, FL 33477 PHONE: 561-744- 6006 ∙ FAX: 561 -744- 9085 ∙ www.NGF.org
Holiday Island Country Club Introduction National Golf Foundation • Municipal golf facility consulting • NGF Staff – Richard Singer • Not advocate for any position other than Holiday Island Suburban Improvement District success w/ Holiday Island CC Why we’re here: • Review the operation, economic potential, physical condition of 18 hole Holiday Island CC, 9 hole Island golf course and clubhouse • Review the market environment • Provide recommendations and alternatives for maximizing the economic potential of golf within the District. Methodology: • Meetings Facility inspection • Market analysis Site analysis 2
Holiday Island Country Club Key Components of the Study Physical condition of Holiday Island CC Recent performance of Holiday Island CC Status of Holiday Island area golf market Identify how Holiday Island CC can maximize potential Help HISID create a sustainable golf facility for long-term future success Present NGF Consulting findings and recommendations 3
Holiday Island Country Club General Impressions Holiday Island CC has the basic design features and location to be a successful public golf course. Aging infrastructure, especially related to turf conditions and irrigation. Lack of adequate maintenance staffing, due to low revenue and low expense structure. Remote location with small proximate population and limited local golfers support. Inconsistent operating policies over time, leaving a perception in the region that HICC is a private, member-only club. Declining golf market due to increased competition, reduced discretionary incomes, aging population, and changing demographics. 4
Holiday Island Country Club – 18 Hole Course 5
Holiday Island Country Club – 9 Hole Course 6
Holiday Island Country Club – Physical Review Key Issues We See Course is more than 40 years old, renovations/upgrades will be required in the near future (within 3 to 5 years) • Turf - some form of upgrade or replacement • Cart Paths - some upgrade and improvement • Irrigation - problems with breaks and coverage, not fully efficient • Greens - Bermuda contamination, some disease and nearby tree/root problems • Tees - should be improved with stronger turf and a leveling program • Bunkers - should be improved with better sand a linings • Driving Range - add a few tee stations, more length, and better targets • Maintenance compound would benefit from general “face - lift”. HICC should upgrade on- course “niceties” • Course signs and markers inaccurate • Golf holes (cups) are raised too high • Yardage markers are not complete • Water stations need improvement 7
Holiday Island Country Club Holiday Island Country Club Needed Physical Improvements Highest Highest Priority Items Estimated Cost Turf $150,000 Cart Paths 240,000 Amenities 60,000 Irrigation System 1,000,000 Greens 400,000 Sub-Total – Most Immediate $1,850,000 Lower Priority Items: Tees $30,000 Bunkers 70,000 Driving Range 60,000 Maintenance Area 15,000 Total Holiday Island CC Upgrades $2,025,000 8
Holiday Island Country Club – Operational Review Key Issues We See Operating policy has been inconsistent, switching between member-only and semi-private, or daily fee Holiday Island CC is operating with a staff that is barely sufficient to sustain operations HICC is being maintained to match budget, as opposed to golf course needs The absence of a true “marketing plan” to define a strategy, establish goals and define specific activities The total revenue earned at HICC is much lower than average for public golf courses of this type 9
Holiday Island Country Club External Factors Decline in overall demand for golf in this local market Population growth in the area is at or below the total U.S. rate Course supply in the area suggests a “saturated” market – small population and lower-than-average golf demand to support golf courses Significant downward pressure on green fees in this market area. Very few northwest Arkansas area / southwest Missouri golf courses are able to charge in excess of $40 or $45 per round (w/cart). 10
Holiday Island Country Club Key Operational Findings Holiday Island golf system is basically set up in a traditional municipal golf format with full District control of facilities and labor. No indication that the facility is being mismanaged in any way, but the golf course is under-staffed to provide a level of high quality maintenance. HICC is operating a good quality golf course facility in a generally rural location with a limited customer base to support operations Course is earning total revenue less than half the U.S. 18-hole golf “standard” of about $1.0 million in revenue District has worked hard to reduce expenses in the operation to match the low revenue, but this has in part contributed to the reductions in maintenance and facility improvement Staff includes a Class A-1 PGA Golf Professional, certified for the past 24 years, as well as, a GCSAA Class-A Superintendent with 36 years of golf maintenance experience. 11
Holiday Island Country Club NGF Recommendations Commit to a semi-private structure with renewed focus on attracting non-local golfers Enhance marketing, especially related to technology (internet, email, social, etc.) Improve the physical condition of the property with additional maintenance staff Complete the physical upgrades needed, focusing on turf quality as highest priority Implement player development activities that appeal to attracting new golfers Make slight increase adjustment in playing fees bringing the Activity card average discount to around 20% from peak green fees, and commit to a program of annual fee adjustments to account for increasing maintenance costs. 12
Holiday Island Country Club Preliminary Financial Analysis NGF estimated 15,850 to 22,000 rounds in 2015-2018 period. NGF projects facility revenue in the $450,000 to $700,000 range between 2015-2019. The annual net income after all expenses is not likely to be positive, although direct golf losses can be reduced from over $200,000 projected for 2015, down to below $100,000 by 2017 and $65,000 in 2019 HICC operation, as it currently situated, is not sustainable for the long term, as it not likely to be capable of sustaining basic day-to-day expenses. It is also certain that the Holiday Island CC operation will not be able to cover any large-scale capital costs and it is likely that the facility will operate with continued losses 13
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