2009-04-17 golf course market review
DESCRIPTION
Presented to the Lake County Forest Preserve District Board of Commissioners Committee of the Whole meeting, March 17, 2009, by ERA | AECOM. For more information about the Fort Sheridan master planning process, please visit http://LCFPD.org/fort_sheridan_golfTRANSCRIPT
Presentation Fort Sheridan Golf Course Market ReviewPresented to:
The Lake County Forest Preserve DistrictPresented by:
ERA|AECOM
March 17, 2009
Approach Map LCFPD golf rounds by zip code
– Understand geographic distribution of play Review ThunderHawk financial performance
– Rounds, revenue, and expenses– Understand implications
Confirm golf inventories within 25 miles Refine financial analysis for the proposed
Fort Sheridan golf program Understand golf market demand and supply
implications for 2014
Geography of Rounds: Brae Loch
Rounds: Countryside
Rounds: ThunderHawk
High End Golf Opportunity
Geographic Realities
ThunderHawk and Ft. Sheridan share the North Shore high-end market–17% of play originates from zip codes
around Fort Sheridan–8% of play originates from Winnetka,
Wilmette, Kenilworth Limited penetration in Southern WI Significant private competition
Public / Private Golf Supply
Supply / Demand Implications
Private Market Reality–16 18-hole primary market courses –Courses are losing members – driving a
modest shift toward public play–Courses are starting to lower prices
Public / Daily Fee Market Reality–7 18-hole courses in the primary market–Discounting is impacting profitability–Since 2000: 3 18-hole courses closed
2014: Additional golf would be risky
Ft. Sheridan Financial Planning
Effective greens fees–Seasonality / discounting / weather
Cart utilization rates Food & beverage sales Pro shop merchandise sales Implications for Fort Sheridan:
–No driving range / No banquet facility
Perspective – ThunderHawk - 08
Average green fee of $46.88 per round 50% of rounds drive 35% of revenue
– Impact of discounting / specials Peak $69 green fee drives 33% of revenue
on 23% of rounds – July and August Cart utilization is high >90%
– Additional $13 per round, on average Pro shop merchandise sales: $5 / round Food & beverage sales: $10 / round
Fort Sheridan Concept
Stabilized year rounds: 25,000 Prime season weekend rate: $102
–Includes cart –Thunderhawk:$84 w/cart
No driving range income Estimated sales for F&B & pro shop F&B assumes small meetings, outings
and tournaments – No banquets
Business Plan Approach
Assumes LCFPD operation High-end courses are more expensive
to operate: –Player expectations / client service–Maintenance / mowing–Larger marketing budget –ERA: 25% above ThunderHawk
Replacement reserves Grow-in / startup costs need to be
accommodated
Financial Implications
Effective Gross Revenue: $2.3 million Operating expenses: $1.5 million Income before debt: $800,000 Supportable debt service:
–20 Years @ 5%:$10 million Supportable project budget: $12 Million 30-Year financing is possible
–Would require general fund guarantee
Implications - 2014
Public market should stabilize–Begin to see revenue growth –The private market will remain highly
competitive If Fort Sheridan opened in 2014
–$12 million project budget is insufficient A significant impact on ThunderHawk
–15% market shift toward Ft. Sheridan