The occupancy of golf courses in The Netherlands is increasing, this is shown in the GOSTA 2007 report by consulting firm Horwath HTL, which was presented at the National Golf Convention organized by the NVG.

The research among 44 golf courses shows that the average number of rounds on the golf courses has increased considerably. In 2005, the annual number of rounds on commercial 18-holes golf courses was almost 47,000; an increase of 29% compared to 2001. The resulting occupancy rate of the average commercial 18-holes golf course is 60%. The occupancy on 9-holes golf courses is 59%. The 27-holes courses are underperforming with an average occupancy of 46%.

In comparison to commercial golf courses, club courses are less busy: both 9-holes courses and 18-holes courses show an occupancy rate of 50%.

Increased prices

The cost of membership of an 18-holes golf course averages at € 800 per year. For a 9-holes golf course this is € 500. Between 2001 and 2005, membership fees have increased by 20%.

For non-members the fees have also increased. The average green fee for an 18-holes golf course is € 42 on week days and € 48 on weekends. Compared to 2001, the green fees have increased by 21%. On 9-holes courses the fees for an 18-holes round are on average 15% lower than on 18-holes courses.

Food & Beverage on golf courses

An increasing part of the revenues for golf courses are generated by the Food & Beverage facilities in the club home. More and more golf courses are operating the F&B facilities themselves. This is a change compared to 2001, when the F&B facilities were generally leased to third-party operators. The revenues from the F&B facilities increased by 11% between 2001 and 2005.

The average F&B revenues on a 18-holes golf course were € 550,000 in 2005. On 9-holes courses the average F&B revenues were € 230,000. Compared to other F&B operations, the expenses for the club home are high. Because of this, the departmental profit for the club home on 18-holes courses is only 17%, while 9-holes courses on average show a loss of -4%.

An important reason for the high costs is that the club home is usually opened 7 days per week, often with unprofitable opening hours, while it is almost completely dependent on the golf players for revenues.

Profitability increasing

With the increased popularity of golf courses, the profitability is also starting to increase. The total revenues on an 18-holes golf course was € 2.6 million in 2005. The total revenues per round, including F&B, school and other revenues, was € 56. On 9-holes courses the total revenues were considerably lower: € 879,000 per year or € 38 per (18-holes) round.

The revenues on 18-holes golf courses has doubled since 2001. In part this is caused by the revenues from the F&B facilities, which now fall directly to the golf course since the F&B facilities are usually no longer leased to third parties. If the F&B revenues are not included, the increase in total revenues is 48%.

The net profits on golf courses remain relatively low, due in large part to the high investments needed and the resulting costs for depreciation and interest. Because of the higher number of rounds and the higher revenues, the net profit for an 18-holes commercial golf course increased from € 181,000 in 2001 to € 288,000 in 2005; an increase of 59%. Based on an average initial investment of € 3.2 million, the return on investment for existing golf courses is 9%.

However, for new golf courses, the investment would be approximately € 10 million, resulting in a return of investment of only 3%.