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
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Presentation Fort Sheridan Golf Course Market ReviewPresented to:
The Lake County Forest Preserve DistrictPresented by:
ERA|AECOM
March 17, 2009
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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
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Geography of Rounds: Brae Loch
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Rounds: Countryside
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Rounds: ThunderHawk
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High End Golf Opportunity
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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
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Public / Private Golf Supply
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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
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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
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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
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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
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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
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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
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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