2009-04-17 Golf Course Market Review

Presentation Fort Sheridan Golf Course Market Review Presented to: The Lake County Forest Preserve District Presented 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

2009-04-17 Golf Course Market Review

by Lake County Forest Preserves on Mar 23, 2009

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2009-04-17 Golf Course Market Review — Presentation Transcript