Does Australia really need more golf courses?
Something as majestic as the new Lost Farm Golf Course set to open in Tasmania in October should be applauded, right? But does Australia really need any more new golf courses?
The discussion was raised in Golf Industry Central editor Mike Orloff. He discussed some financial problems he has seen first hand at Australian golf courses and why more golf courses may not be a good idea.
Are the housing developers greedy in building a course solely to sell homes? They underwrite the entire project and then leave the course to fend for itself once they have sold all the homes. Usually this will be at the expense of the members or adjacent homeowners, whose expectations have been raised so high in an effort to get them to fork out some serious cash to join.
The state of Australian golf is pretty reasonable but with more American golf courses closing than opening last year it may be some cause for concern.
There are several courses for sale in Australia at the moment, but overseas buyers are very hesitant to purchase. They can find much better deals in other countries with much greater financial returns.
So would we, as golf customers, be better off if a few golf courses went the way of the Greek economy?
The supply of courses in some areas is so great compared to the demand. So if we lose a few in these regions the rest would most likely would all be better off operationally.
The full article is here at Golf Industry Central. I’d love to know what everyone thinks on this one.
Golf Industry Central magazine is free to view online and well worth checking out each month.
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I think this might be a trickier issue than it first seems once you get past the surface. Obviously, too many golf courses and not enough golfers will mean that some courses will have to close while only the ones that know how to run their course as a business to continue to make money will survive.
But on the flip side, a greater number of courses means more competition between courses. Competition forces businesses, golf courses in this case, to pursue greater operational efficiencies driving the cost of golf down. If the cost of golf down, then more people are potentially more attracted to the game. If more people come to the game, than potentially everything in golf becomes cheaper. That can only be a good thing.
Utopia? Absolutely. But I think we’re better off having too many courses than not enough. Too many makes the good courses better, while the ones that can’t operate under a commercial model get sold, taken over, or closed down. Too few courses mean that demand exceeds supply resulting in more expensive courses. More expensive golf leads to less people playing which results in even more course closures.
I agree Malcolm. It is probably a more complicated issue than it appears with many more factors than I’d thought about before.
The competition between clubs would certainly be a major factor with a large number of clubs but you’d hate to see it lead to clubs closing down which ultimately means people losing money.
Thanks for your thoughts on this. I don’t know what I think anymore! I’ll stay on the fence!