Page 14 - GBC Summer ENG 2021

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Golf Business Canada
Rob Taylor, Vice President, Surrey Golf Club, British Columbia. One of the golf courses that stayed open after the COVID-19 government restrictions were mandated last spring.
Maintenance budgets had far less variance compared to 2019. The proportion of clubs with increased maintenance was approximately equal to the number with decreases, and those variances were relatively modest. As you will read here, this will be a different story in 2021.
So, overall, the Canadian golf industry did very well in 2020. Worth noting, Canada’s results also appear to have outperformed most other countries. Rounds played, for example, were up 14% in the USA and 12% in Britain, compared to Canada’s 18%. In normal years, Canadian golf does “punch above its weight” as having the highest golf participation rate in the world. Once again, this bodes well for our continued success in 2021 and beyond.
2021 BUSINESS OUTLOOK: MORE SUCCESS?
Reviewing 2020 provides some context for future strategic planning, but like they say in the stock market, “past performance is not necessarily an indication of future results”. So, this is where the elusive crystal ball would come in handy.
Firstly, let’s take a look at some more of the key findings from the NGCOA Canada Pulse Report, specifically on survey questions to Canadian golf course operators about their own projections for 2021.
We will start with total gross revenues. This indicator shows optimism from the majority of operators, with 57% of them budgeting for significant increases beyond the strong results of 2020. Only 22% are anticipating significant decreases, with the remaining 21% flat (+/- <1%). Most golf courses were assuming that similar COVID-19 restrictions would be in place for much of the 2021 golf season, and that they would not lose any of the early season that was lost in 2020, notwithstanding the aforementioned Ontario surprise. These projections are also somewhat consistent with the Rounds Played trending shown throughout the 2020 golf season and early in 2021.
When broken down, their core business of golf + golf car revenues is projected to be a very similar trend to total gross revenues. Average rate per round also supports the bump in gross revenue projections, at least at public and semi-private clubs. Only 3% of clubs are expecting a reduction there, while 66% are projecting significant increases.
Membership revenues are projected to be up significantly by 57% of clubs, with 26% reporting flat. In terms of membership rates, 68% reported significant increases and 23% planning to stay flat. In addition, some clubs are restruc- turing their memberships to better align with an expectation that such high rounds played will continue, or limiting the number of member- ships in certain categories to leave space for more profitable golfer segments.
There is also optimism for 2021 regarding tournaments and F&B revenues, with a notable uptick being forecasted for both. Those projections are certainly not return- ing to pre-COVID-19 levels by any means, but would be significant improvements over the harsh realities of last year. Health officials and government regulations obvi- ously play a big role in determining these outcomes, which could also vary from province to province, but it is cause for optimism to see these positive expectations from golf course operators.
On the expense side, 74% of courses are budgeting for signifi- cant increases to their total labour cost. The assumption of being open for the full season, some opening up of more F&B opportunities, the continuing need to service a full tee sheet each day, and expecting to have the revenue budgets to support additional hiring are all factors driving these higher labour budgets for 2021.
Similarly, maintenance budgets are projected to be significantly higher in 2021. 69% of courses are projecting that, while just 7% are planning to reduce maintenance expenses. Anticipating high golfer traffic, and having the revenues to afford such increased expenses, appear to be the common themes.