Thursday, October 8, 2009

Hot Tip... golf is in trouble

Just yesterday Minister Campbell was talking about Government abandoning the practice of competing against private enterprise and in the very same article Minister Docherty is quoted as saying the golf courses are for sale but not until things get better... well here's a hot tip no business is going to get better if you continue to do nothing particularly the golf business... simply put the golf industry is a very competitive business and it should be run like one and the newer more successful courses are continuing to reinvest and develop people around them... take a look at Fox Creek in Dieppe where they are now sold out of phase II on the residential side of the development... in Halifax Glen Arbour is well on its way to be fully developed on the residential side... and if you visit Fox Harb'r near Wallace, NS you will see significant residential development as is the case with most high end golf course developments... and my argument is why hasn't the Province sold off our money losing courses to a private developer who would develop the neighbouring lands with a possible year round or seasonal golf community. What possibly could be wrong with 200 developed home sites lining some of the fairways of our Island courses and feeding back property taxes and other spin offs from the property owners. My guess is a lot of the potential buyers would be from off Island and they would great summer residents who in all likelihood would invite friends to their vacation homes and spending more money in our economy... A camper comes for a few days but a seasonal home owner comes for a life time and then passes it on to their family... someone close to Golf Links told me that the Government felt the 4 courses were worth $30,000,000.00 which in my view is a ridiculous figure on an asset that is costing over a $1,000,000.00 a year to operate especially when there is no expense allowance for the return on the original capital investment. Maybe the Government should pull the file from the Tourism Department and pass it over to the Department of Small Business (sorry we don't have one) or at least a Department that is experienced in business and understands how development works... and develop a plan to turn these properties around into a winning proposition...
Golf industry in trouble as economy worsens
Housing market’s collapse hampers development of new courses
Story By: David Sweet
Source: MSNBC
According to the National Golf Foundation, the number of new courses expected to open in the United States in 2008 is the smallest in 20 years. More courses are scheduled to close this year (nearly 100) than the 80 expected to open, though the closures have fallen since almost 150 were shut down two years ago. The golf construction boom of the 1990s – when about 2,500 new courses (mostly daily fee ones) were added to the 13,000 or so already extant in the U.S. – is not only over; it’s stuck in reverse.
The problems of the broad economy are bedeviling golf course construction. The housing market’s collapse has hampered development, since a number of golf projects these days are tied into on-site housing. Getting financing to build a new course is tougher than it has been in decades. Projects that were started this year have seen the bulldozers turned off until better times appear.
But in 2008, golf is in decline by many measures. Rounds are down, as is the sale of equipment. On the pro tour, television ratings fell once Tiger Woods left the scene with a damaged knee after the U.S. Open at San Diego’s Torrey Pines.
Though municipal courses are taking the brunt of the downturn (except perhaps Torrey Pines, which enjoyed $8 million in renovations before the Open), private courses are not immune to the pain. Take the case of Ravisloe Country Club in Homewood, Ill. After 107 years as a well-respected course, the 6,300-yard Donald Ross original was reported to have been put up for sale this fall with a price tag of $4.95 million. It is said only a few dozen members are left.
All in all, the golf course business was once as breathtaking as the ocean holes at Pebble Beach. These days, unfortunately, it’s looking more like Rodney Dangerfield’s wardrobe in “Caddyshack.”

1 comment:

Ritchie Simpson, The Mortgage Guy said...

"...or at least a Department that is experienced in business and understands how development works.." and what department would that be?