Archive for the ‘Municipal Golf’ Category

As I travel around the country consulting with municipalities, I see a lot of proposals and activities related to renovating and updating “tired” municipal golf courses. In some cases, the municipalities are seeking to drastically upgrade their facility so as to fundamentally change the very nature and operating structure of the golf course and clubhouse. I can tell you from my 25 years of experience in golf facility consulting – this sometimes works and it sometimes doesn’t.

Below I offer some very basic opinions in defining the characteristics of muni golf renovations that tend to work and which characteristics tend not to work. These observations are not meant to be scientific, but reflect general observations of my field work over the last quarter century.

Municipal golf course renovations are more often successful when the project:

  • Broadens the appeal of the golf course

  • Is supported by existing regular players

  • Does not lead to drastic fee increases

  • Includes re-branding when there is a major upgrade

  • Includes appropriate clubhouse amenities to match the golf experience

  • Is a strong fit with the surrounding neighborhood

  • Includes expanded and upgraded practice amenities (range, chipping, putting)

Municipal golf course renovations tend to struggle when the project:

  • Leads to a high level of new debt or bond issue tied to the golf course (i.e. Revenue Bond)

  • Is opposed by existing regular players

  • Leads to large fee increases

  • Relies on outside, or infrequent golfers for support

  • Changes the basic character of the property so it no longer reflects the neighborhood

  • Goes too far with expanded clubhouse amenities (banquets, lockers, restaurant)

In short, I can say that there are many municipally-owned golf courses out there that would benefit from improvements to facilities, both golf course and clubhouse. Thus, I think my message here is to be careful and have a good plan upfront. Upgrades can benefit the golf course and the municipality, but should not be completed “at any cost” and there should be an established ceiling to the proposed investment.

Funding Options / Naming Rights

Another layer to add to this story is the price tag for golf facility improvements that often run into the millions of dollars, thus leading to the question – how to pay for it. Some ideas that I have seen lead to success for funding muni golf improvements, other than going into debt include:

  • Grant Funding – finding some type of grant to help defray specific costs, such as neighborhood, transportation, waterway/bridges, parks / conservancy grants.

  • Public / Private Partnerships – Finding a private company willing to fund (or help fund) improvements in exchange for certain rights (property, management, development, etc.).

  • Sponsorships – Finding a partner willing to sponsor specific projects in exchange for recognition.

  • Naming Rights – Finding a partner willing to pay for naming rights to a specific project – i.e. the “Big Corporation” clubhouse at XYZ Golf Course, Or the “John Q. Public” Pavilion at ABC Golf Course.

Thanks for your attention. I sincerely hope the information is useful. In the next postings we will continue our discussion of ideas to help support the long-term health of the golf industry we all hold so dear.

See you down the road.

Richard Singer

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In several of these postings I have been discussing the world of municipal golf, and the constant challenge to preserve the economic health of these vital community assets. As I travel around the country working as a golf consultant, I find more and more that the very existence of municipal golf courses is being threatened due to government budget challenges. More and more I hear the refrain – “why are we in the golf business at all?”

Municipal golf is very much a part of our industry and, I believe, a key component to the overall health of golf in the United States. Since the addition of Van Cortlandt Park at the turn of the 20th Century, municipal golf has played an important role in bringing golf to the masses and providing an affordable entry point for millions of people, especially juniors. The NGF believes that municipal golf still plays that role today, and we ask “how many golfers would there be today without municipal golf?” I myself am a great example of this having taken my first golf lesson as a 10-year-old at the Town of Ramapo’s Spook Rock Golf Course, and played my first full 18-hole round of golf at the Village of North Palm Beach’s North Palm Beach Country Club, both municipal golf courses.

But developing new golfers is only part of the story. Municipal golf courses help their communities in many other ways by demonstrating a community’s commitment to preserving open space, generating low-cost outdoor recreation for all citizens and helping to promote other residential and commercial development. Over the years I have often heard business leaders refer to the “keys” in identifying strong communities by looking at the libraries and municipal golf courses.

Challenges and Solutions

Municipal golf today faces growing challenges from many sides. First, there is pressure from golfers to retain discounted fees and maintain conditions. Second, there is pressure from City, County and State government leaders to sustain fiscal stability and not “lose any more taxpayer money.” And finally there is pressure from daily fee operators, many of whom believe municipal golf is competing with them unfairly.

As the NGF celebrates its 75th Anniversary, our organization is re-asserting our commitment to the health of public golf in general and municipal golf in particular. We believe that the continued health of municipal golf is providing help to ALL golf facilities, as muni golf provides a great “feeder” system to the industry to help increase the number of, and commitment from golf participants. We also recognize that the ideas and advice we give to muni golf operators can apply equally to privately-owned golf courses and vice versa.

As a part of the NGF’s commitment to the golf industry, this organization will be hosting a new Municipal Golf Institute (MGI) in 2011, to be held at the Oglebay Resort andConferenceCenterSeptember 6-9. This Institute, conducted together with the National Recreation and Park Association, will be designed to bring key golf industry leaders together to discuss the latest management practices to improve and strengthen operations, as well as gain a deeper understanding of the key challenges facing public golf.  

I hope you will take the opportunity to go to the web page noted below and review the event for yourself. I am hopeful we will see many of you there later this year. http://institute.ngf.org/pages/default.asp

 I look forward to a great second half of 2011 and am hopeful that I am able to provide information and insights that can help your golf business continue to succeed, regardless of the “facility class” you may fall within.

See you down the road.

Richard Singer

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In the tough golf economy of 2010, more and more golf facilities are paying close attention to promotional activities as a way of generating new interest in their respective golf facilities. In the last posting we reviewed the internet and the large impact it is having on golf facility advertising. Many of you have asked me – “now that we are on the internet, what can we say to golfers to get them to come and try us out?”

In this posting I will give a brief review of a handful of ideas that I have seen implemented at public golf facilities across the country, with some success in attracting new golfers and more play out of existing golfers. Some of these ideas have also worked in private club settings, but are most successful in daily fee, semi-private and municipal golf operations. The most successful golf facility promotions tend to fall in one the following broad categories, including:

-Golfer Education / Lessons / Camps: Anything that entices new players to come and give the game a try will be helpful in attracting new customers. Golfers will often continue to play a large share of their golf at the facility where they first learned the game. Female-friendly clinics and group golf lessons have been especially popular in a few places I have seen this year. The continued promotion of lessons and junior programs appears to be a major positive for golf facilities all across the country and should dividends in developing future customers. I suggest considering established programs like “Get Golf Ready in 5 Days,” the adult player development program being promoted nationwide by Golf 20/20 and the World Golf Foundation.  “Get Golf Ready” is designed to bring adults into the game of golf in a fast, fun and affordable way.

-Organized Activities / Leagues: Giving avid players a reason to come to the golf course more often is a great way to enhance your rounds activity. A common promotion at successful golf courses is to offer leagues and other organized golf competitions. This is a great way to attract golfers to your facility in off-peak periods such as weekday afternoons. Going around to local businesses and offering modest discounts for larger groups is a great promotional tool. Include scoring and league management services in your package. Golfers love to compete, and both inter-corporate and intra-corporate leagues have been successful.

Outings / Tournaments: Tournaments and other events are a proven method for stimulating interest in a particular golf facility and maximizing the activity on the golf course. These organized outings and tournaments are also a way to expose your golf facility to a whole new group of golfers who may not be familiar with what you have to offer. Always try to be full service on tournaments and outings – including poster scoring and prize packages through your pro shop (if you have one). I have several clients who have been successful in promoting tournaments to both large and small groups, including corporations, associations and other private organizations. These operators always leave a brochure of information in every “goodie-bag” showing how easy it is to book your next tournament at the club. Also, make every effort to re-book each event for next year before this year’s event is complete!

-Loyalty Programs / Other Quantity Discounts: Loyalty programs are becoming more common in all industries and golf facilities are no different. I often see how important it is for golfers to finally play that tenth round of golf so as to activate the free round promotion. Good loyalty programs at golf facilities offer a free round after a certain volume is hit, but also include discounts in the pro shop and food and beverage service as well. I often see tee-time preferences and first notice for events and outings included in loyalty programs. Further, your loyalty program should include an email component and perhaps a dedicated page on your website. It is always good to make your most loyal customers feel special!

Remember – your website should promote all of the above-noted activities!

So as you contemplate ways to grow your golf course revenue in 2010, don’t forget to keep thinking about new promotional activities that stimulate interest in your facility. Remember, every new customer you create could be worth scores of golf rounds over the next few years!

Thanks for your attention. I sincerely hope the information is useful. See you down the road.

Richard Singer

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As I review golf facility operations in 2010, one area of golf revenue generation is more clear than ever – ITS ALL ABOUT THE INTERNET! There is no doubt that the Internet is the most cost-effective form of advertising outside of word-of-mouth. The Internet is having a larger and larger impact on golf as time goes on. Golfers, especially when traveling, are using the web more and more to find places to play. The web has several key advantages over other forms of advertising:

  • Cost: A website is relatively inexpensive to setup and maintain.
  • Reach: As the name “world wide web” indicates, the Internet is international in scope. Today, almost every household that contains a golfer will have access to the Internet.
  • Information: The amount of information that can be put on the web is virtually unlimited. At the very least, clear directions and contact information can be used to dramatically increase business.

In my consulting engagements I have found that some golf facilities have really outstanding websites, while others simply do not. What is it that separates good from bad in golf course websites? Here is a selection of key items that the most successful golf facilities (public and private) are using on line in an effort to drive new business to their facility.

First, it is essential that the website be kept current for rates, hours, etc. The best sites are the ones that are constantly being updated with new promotions and news items, so that customers get in the habit of checking them regularly. The website should include:

  • Pictures of the facility
  • Verbal descriptions
  • A full scorecard
  • Map/directions to the course
  • E-mail signup – allow a way to sign up for an e-mail program.
  • Information about group and individual lessons
  • Current rates and operating hours
  • Amenities
  • A calendar or news of promotions and upcoming events

Second, I have observed that the most common problem with golf facility websites is that they look great and are very informative, but if prospective customers cannot find it, it does not do you any good.  It has to be designed such that today’s web search engines will find it based on key terms people are likely to use. Therefore, the first task is to create a website that can be found easily by prospective customers looking for golf in your area.

The website should be promoted in all advertising and literature put out by your facility!

So as you contemplate ways to grow you golf course revenue in 2010, don’t forget to keep your website up to date and easy to find. The money you spend in this area will come back to you many times over. Definitely more than most any other advertising you can consider.

Thanks for your attention. I sincerely hope the information is useful. In the next postings we will continue our discussion of golf facility marketing with a review of some successful golf course promotions that have been tried by golf operators in the last few years.

See you down the road.

Richard Singer

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Happy belated New Year to all. Sorry for the delay in postings in 2010, but I am back on track now. The first topic I would like to hit in 2010 is one that has been coming up more and more in my consulting engagements with public golf courses – the food and beverage concession. This is one area of golf course operations that has traditionally been ignored and/or left aside. Many golf operators still go by the old adage of “F & B as money losers,” or “my goal is to just breaking even.”  In reality, I am finding more and more that golf course concessions can, and should, be a profit center for the facility. Below are a handful of ideas that I have seen that work in this segment. I should note that the successful food and beverage operations are the ones that provide additional revenue to the facility, AND provide an added service to the golfers so they feel at home and stay on your property longer and want to come back soon.

The most financially successful food and beverage concessions that I have seen at public golf courses are the ones that do two things – serve golfers and attract non-golfers to the property. In this posting we will look at the first – serving the needs of golfers. First and foremost, a golf course food and beverage operation must provide the appropriate service to the core golfing customer. This may sound simple, but a common complaint I have seen is facilities that are so focused on banquets and weddings, that they ignore the golfers. Serving golfers means being open early and serving (some type of) breakfast and coffee to the early-bird players. Inattention to these early players is a very common complaint from golfers. Also, it is important to have space available for players as they come in from their round of golf, and they can feel comfortable sitting in their golf attire, with golf shoes and hats. The bar and/or “sports pub” setting has become very popular and successful at golf facilities. The inclusion of multiple TV’s, especially on sports weekends, is a great way to keep golfers hanging around after the round of golf. Outdoor seating with outdoor service and coverage from the hot sun is especially appealing, when the climate is appropriate.

Another key is to allow the golfer the option of being served quickly and without the need for wait staff. This is especially significant when golfers want to order something quick at the turn. Having cart traffic pass by an open food service window that will be quick and convenient, going from the 9th green to the 10th tee, is the best way to add concession sales at a golf course.

Also, it is very important to have on-course beverage service (beverage cart) with appropriately trained beverage cart personnel. Beverage carts are a revenue center, but also a value-added service to golfers. The two biggest complaints about beverage carts at public golf courses are that either you never see them when you want them, or they are racing around so fast that you don’t have time to waive them down. Beverage cart staff should be trained to know the spots on the golf course that tend to be slow, like the tee on a par-3 hole. Also, beverage cart staff should be trained to have a basic understanding of the game of golf, and how it is played so they know where to be so as not to slow up the pace of play (i.e waiting behind the green to serve golfers between holes). A friendly smile and the offer of a certain return is also a must from staff.

So as you contemplate ways to grow you golf course revenue in 2010, don’t forget the food and beverage concession. There may be more there than you might think.

Thanks for your attention. I sincerely hope the information is useful. In the next postings we will continue our discussion of golf facility marketing with a review of some successful websites and more discussion on growing (and balancing) non-golfer food and beverage revenue.

See you down the road.

Richard Singer

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One of the most important aspects of my consulting services with golf courses is to assist with improving the marketing of client golf facilities. Through the years I have often found that golf courses tend not to market their services the way other businesses market, thinking that the “golf course will market itself.” However, in this ultra-competitive golf industry environment, golf course marketing has become a critical element in the success (or failure) of golf facilities nationwide. As I work with golf facilities in 2009 I am finding that the most successful marketing / promotion programs that are genuinely driving customers to golf courses are email campaigns, and not necessarily campaigns that offer discounts!

One of the things I like to do when working with golf course clients is sign up to the facility’s email list. This way I can see what the club is sending to its customers and prospects. What I am finding is many very clever ideas used to drive both new and repeat customers to the golf facility, for BOTH golf and other services (i.e. merchandise, F & B, lessons, etc.). In today’s world, it Is clear that email is the most effective way to stay in touch with customers and let them know what is going on at your facility (events, tournaments, etc.) and when you are offering specials and discounts (for golf and merchandise / F&B promotions). After a while I get conditioned to seeing the emails, and they also function as kind of a “newsletter” about what is going on at the course.

The most successful campaigns I have seen this year typically fall into two categories: The food and beverage campaigns and specials that involve the attraction of a new party to the facility. For example one of my golf course clients did a successful promotion this summer offering a free round of golf to any customer on the club’s email list that brought three other new customers not on the email list. This way the course was able to attract three new paying customers and add three names to the email list. Then these three new customers brought in three friends of their own and the cycle just kept going. This client was able to add over 200 new email addresses to its list during the course of the promotion.

In general, I tend to like promotions that offer discounts for new customers who are not presently on your email list. This way you get the revenue from the new customer, plus capture some record information so as to stay in communication with that new customer. The best part of all is that this form of advertising can be done with minimal expense. Compare that to the “phone book” ad so many golf courses continue to pay for.

So as you contemplate ways to drive more customers to your golf course this year, don’t forget about email. If you do not yet have a formal email program, think about adding one. If you are already capturing email addresses think about ways to expand the list and reach many new customers. It is almost 2010! Email and internet advertising is where the successful golf courses will be this year.

Thanks for your attention. I sincerely hope the information is useful. In the next postings we will continue our discussion of golf facility marketing with a review of some examples from the best golf course websites I have seen this year.

See you down the road.

Richard Singer

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As I travel around the country working with golf course operators, one question I often get is about marketing the golf course – “How and when do I market this golf course?” Well, one thing I can say about this subject is that it has been a hot issue for me and my clients in 2009, and I have seen some clear examples of when not to market your golf course.

As we know, there are four basic components of marketing (Four “P’s”) – Product, Promotion, Price, Placement. The first level of this marketing management philosophy is probably the most important with golf facilities – Product. At a golf facility the product is your golf course. If the golf course is not in ideal condition, all other marketing efforts (promotion, price, placement) are not likely to succeed, and may even backfire. I have seen this on two separate occasions with municipal golf operators in 2009. Here is a summary of what happened:

Heavy rain fell in late spring / early summer, drenching the golf course which does not drain well as it is.  The municipality went ahead with a pre-planned promotional push to drive new customers to the golf course. The promotion worked and all these new customers experienced soggy conditions and a rather un-enjoyable round of golf. These new customers left unhappy, unlikely to ever return. Also, they told friends and acquaintances about the conditions, who also told others and so on. In the end, the course gained a reputation as being “under water.” One rumor was even started that the course was going to close or be sold, leading to further declines in rounds activity and cancellations of pre-booked events.

So, the moral of this brief story is simple – make sure your golf course is in its most ideal condition (product) before embarking on an extensive advertising campaign (promotion).

Thanks for your attention. I sincerely hope the information is useful. In the next postings we will continue our discussion of golf course marketing with some examples of successful advertising campaigns for both rounds and memberships that I have seen this year.

See you down the road.

Richard Singer

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In the last few postings we have been discussing the world of municipal golf, and what is the clear emerging trend toward privatization of municipal golf courses. In my next few postings I am going to shift over to a discussion about another trend I see emerging in my consulting practice – municipalities acquiring privately-owned golf facilities and converting them to municipal golf courses. This trend has been occurring for several reasons, the most notable of which is the continuing tough market environment for privately-owned golf courses and their inability to sell to another private entity. As a result, private owners look to local government as a place to sell, along with a threat to “close the golf course” or “convert it to another use.” Often, the municipality is enticed into taking over the property as method to preserve open space, green space or recreation assets within the community, as opposed to a new revenue source.

As with any acquisition venture, there are pitfalls and problems with this form of acquisition, from the perspective of both the municipality and the private owner. As I travel the country consulting with both municipalities and golf course owners, I am often asked if these proposed acquisitions are a good idea. Will this be a drag on our general fund? How can we finance this acquisition? What is this golf course worth? Can we make money taking over an existing private golf course? Can the local government take my golf course in eminent domain? What will happen to my employees?

These are among the most common questions posed in my dealings with proposed municipal acquisitions of private golf courses, and often are the most difficult to answer without appropriate analysis and due diligence. The lack of appropriate due diligence, by both parties, is often the most common cause for disaster scenarios in muni golf acquisitions.  In the coming postings this Fall, I will be drawing on my expertise and experience to discuss the state of municipal golf acquisitions and to offer ideas on how to make this idea work for both parties and function as a way to grow municipal golf in lieu of developing new golf courses.

Thanks for your attention. I sincerely hope the information is useful. In the next postings we will start to discuss issues related to municipal acquisition of privately-owned golf courses in light of new economic realities of 2009 and beyond.

See you down the road (and at NRPA).

Richard Singer

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In the last posting we discussed the most popular form of “privatization” agreement that is in place at municipal golf courses in the U.S. – the all-encompassing full service management agreement. This is an agreement whereby the municipality pays a fee to a private company to operate a golf facility for the municipality, but the municipality still owns the revenue. An alternative to this agreement is the lease agreement, whereby the private company pays a fee to the municipality for operation of a municipal golf course while the operator owns the revenue.

The primary goals of an operating lease are to relieve the municipality of all operating concerns, to ensure a minimum rent payment to the municipality (or at least eliminate the losses), and to improve and/or protect the asset. An operating lease is similar to a management contract in that the lessee, like the management firm, hires all employees and is responsible for the day-to-day operation of the facility. The difference between the two is that the full economic risk of the operation is shifted from the municipality to the private company in exchange for the opportunity to earn higher revenues and profits than the municipality was able to generate. The lessee would be committed to pay the municipality a fixed rent, pay all operating expenses, supply equipment, and typically provide some capital for investment in the golf facility.

In exchange for incurring all operating expenses and at least sharing capital upkeep, the private lessee would receive most (if not all) of the revenue and pay the municipality either a flat payment (flat lease) or a percentage of revenue (percentage lease), in conjunction with a guaranteed minimum base payment. Leases have several advantages and disadvantages, including:

Advantages to Leasing


  • Burden of Risk. Leasing the facility to a private entity shifts the burden of operational risk to the lessee. This includes the risk associated with rapidly rising expenses, as well as downturns in rounds played and revenues. The only expenses remaining with the municipality will be those associated with administering the contract, oversight, and compliance.
  • Simplicity. The municipality would be relieved of the day-to-day responsibility in maintaining and operating these facilities. (As with all management options, the municipality should still have a person who has golf course expertise monitoring the operation and enforcing contract compliance).
  • Capital Improvements. Depending on the relative attractiveness of the business opportunity to the private sector, the lease terms could require (or at least incentivize) the lessee to make, or at least contribute significantly to, needed capital improvements.
    •Maintenance Equipment. The lessee is often responsible for providing maintenance equipment and golf carts.

Disadvantages to Leasing


  • Control. This lease option offers public agencies the least amount of control over the golf course operation, especially with regard to:
  •            Pricing. Unless specified in the lease, the lessee may seek free rein over golf fees, likely making the golf courses more expensive to the general public. If the lease has restrictions on raising fees, the lease option becomes less appealing to the private companies that may be bidding for the lease award.
  •         Quality. Unless the contract is carefully executed, the municipality would have little ability to regulate the quality of the operation, as long as the lease terms are met.
  • Profit Motive. This is closely tied to the control issue. If not carefully executed, a lease arrangement may directly conflict with the objective of providing an affordable, enjoyable recreation activity for residents, as private interests (including maximizing return) can often be in opposition to public interests (such as providing a community service).
  • Labor Issues. The lease could lead to public sector employees losing their positions at the golf courses, or at least face reductions in pay and/or benefits. However, given the localized expertise employed at golf courses, it is more than likely that most of the full-time golf employees would be retained by a private operator.
  • Revenue Constraint. As would be expected when one party shares a disproportionately low share of the risk, the municipality would receive less of the upside revenue potential than it would with a management contract. This is likely to be an issue only when the operator is very successful at growing revenues or creating new revenue centers.
  • Long Term. Leases are typically for a long term, especially if capital improvements are included in the lease terms. This makes it difficult to get out of the lease, should the municipality become displeased with the lessee’s operation of the facility.
  • Down Market. The lessee may be forced to cut maintenance expenses and/or raise fees if revenues do not meet expectations. Unexpected golf market downturns often lead to the lessee seeking to renegotiate terms.

While leasing of public sector golf facilities was popular in previous decades, its popularity waned in the 1990s as golf revenues were increasing and public agencies began to see what they thought were large sums in golf revenue going to an outside vendor and not being reinvested in the facility. However, since the turn of the 21st century, leases are coming back into fashion for municipal golf facilities, particularly in 2009, with public sector budget challenges. Leasing out the golf operations shifts the burden of operating risk to the private vendor, eliminates large fiscal losses and, in some cases, provides a guaranteed revenue stream to public agencies. In most cases, the vendor will also contribute to, or even completely fund, capital improvements.

Although the appeal of turning everything over to an outside agency does have a lot of merit, especially in terms of transferring operational risk, we should note some downsides of this option. First, the municipality would have much less control over operational issues such as pricing. Secondly, it may be difficult to attract an acceptable vendor with lease terms palatable to both the municipality and the vendor. The public agencies that find trouble in lease agreements often have entered into agreements where one party is doing considerably better than the other. If the deal is too favorable to the municipality, the lessee may struggle, and the asset could suffer as a result. Likewise, if the deal is too favorable for the vendor, the municipality may be sacrificing much needed capital. So it is clear the contract terms are key to any successful lease arrangement.

Thanks for your attention. I sincerely hope the information is useful. In the next postings we will start to discuss issues related to operation of private country clubs and how these facilities can be more economically self-sufficient, especially in these challenging times of 2009.
See you down the road.
Richard Singer

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In the last posting we discussed an alternative to the big management company, noting that some municipalities are using concession agreements when some form of privatization is imminent for a municipal golf course. In this posting, I will be discussing the most popular form of privatization agreement that is in place at municipal golf courses – the all-encompassing full service management agreement. The primary goal of a management contract or management agreement is to provide a golf facility with experienced, professional managers who are responsible for the daily operations, thus relieving the owner (Municipality) of this task. In a typical management contract, the municipality hires a firm that is charged with all management responsibility. The municipality funds capital improvements, and the management firm hires employees. Because employees work for the management firm and not the municipality, payroll cost may be less; thus, the operating expenses may be reduced.

The management firm collects all revenue and provides accounting reports to the municipality. All revenues belong to the municipality, as well as the responsibility for all expenses. The municipality then reimburses the management firm for all payroll expenses and pays the firm a management fee. The management fee is often a fixed dollar amount, a predetermined percentage of operating revenues, or some combination of both. Sometimes, the management firm is paid an incentive that is predicated on percentages of gross receipts or net income, over and above the established minimum revenues. The operating expense budget must be maintained at the original projection for incentives to be earned. Management fees vary depending on the size of the facility and the level of responsibility of the management firm. The length of the typical agreement is relatively short, two to five years, and may include option periods. Management fees paid as compensation in these agreements typically fall between two and four percent (2% – 4%) of total revenues, or at least $30,000 per facility.

Advantages of Management Contracts

  • Operating costs are likely to be reduced if the management firm hires all employees. There is also procurement and insurance savings through the buying power of a larger company.
  • It is assumed that the company hired has experience and expertise in golf facility operations. Not only can this provide help in operations and maintenance but also in other areas such as marketing and merchandising. Thus the agreement will provide municipalities with “One stop shopping” for golf courses and ready access to a network of professionals in all disciplines of the golf industry.
  • The expertise often provided by experienced management companies will likely include tee time reservation and point of sale systems. There would also likely be cross marketing opportunities with other courses in the firm’s portfolio and operating systems that have been tested and proven successful. The municipality will also gain access to tried and true business plans and marketing programs that have also proven successful in other places.
  • The municipality is removed from day-to-day operation in exchange for a payment of a pre-determined fee plus a percentage of gross revenues or some other formula, which is equitable to both parties. In addition, net revenues (if any) are retained by the municipality.

Disadvantages of Management Contracts

  • Though this option offers the municipality more control than with an operating lease, it offers less control than self-operation.
  • Unlike a lease, management contracts usually do not provide a guaranteed income for the owner (municipality), but rather a guaranteed income for the management entity. The major concern with a management contract is the risk the municipality would be taking relative to shortfalls. The management firm’s fee is guaranteed, as long as the contract provisions have been met (operating risk remains with the municipality).
  • The municipality would still be responsible for capital improvements (which NGF has observed is often a key element in failing golf courses).
  • The municipality would still need some golf staff to oversee the golf operation and maintain contract compliance.
  • Management companies may need to move managers around so as to staff positions that are most appropriate for the management company and its goals. Also, management entities may be tempted to ‘relax’ in the last year of an agreement, unless the entity is strongly motivated to want to renew the contract.


This is an option that could produce results, as long as the selected management company is of good quality and is given full responsibility for the operation. Under most true management company scenarios, operating expenses will still flow through to the municipality; however, labor costs are likely to be sharply reduced through the use of efficient effective staffing models and seasonal employees. The overall quality of these types of agreements rests with the municipality’s ability to find a qualified company, negotiate a contract that is “win-win” for both sides, and then provide proper oversight to see to it that the contract is complied with.

In all, the risk would still lie with the municipality, and if the new management company cannot improve revenue performance, the basic fiscal shortfalls that led to this option in the first place would continue with the addition of a new management fee.

Thanks for your attention. I sincerely hope the information is useful. In the next postings we will discuss the operating lease option as a path to improving the fiscal condition of municipal golf courses.

See you down the road.

Richard Singer

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