What could possibly go wrong?

“What could possibly go wrong?” While often said jokingly, when it’s your renovation project (and money) on the line, the question becomes quite serious.

A recent NGF/Sirius Golf Advisors study of municipal golf course renovations in the Dallas area showed all but one produced positive return on investment. The average statistics proved overwhelmingly positive, but an individual project’s financial success ranged from marginal to spectacular. Anyone considering renovation probably wants to avoid either negative or marginal returns.

Yes, things can go wrong. As NGF notes, the most successful renovations bring together everything extremely well to “re-brand” themselves as totally new facilities with better image and experience, driving golfers to their course. There are also some well-known examples of courses that don’t renovate well, don’t meet expectations and struggle financially. (Of course, the most spectacular of these make the non-golf news…..) And, there are many other renovations that simply don’t do as well as expected. Based on my observations and those of other experts, here are some fairly common pitfalls.
 

Poor management, maintenance and customer service

Creating the desired re-branding requires excellence in design, design engineering (drainage, irrigation, paths) maintenance, marketing, management and customer service, to justify the higher greens fees you will need. If the new design is great, but maintenance and service haven’t improved, it may appear to golfers as “the same old place.”

To create a new mindset among golfers, you need to create a new mindset among your employees, which is not always easy. Falling back into poor maintenance practices and deferred capital spending (which forced the renovation you just completed) happens far too easily.
 

Failure to advertise/market/re-brand

Even the best renovated courses require extensive marketing to be successful. A new and improved product means nothing without “pre-opening buzz.”
 

Over spending

There are several very well-known news reports of municipalities grossly overspending – with budgets of $10, $20, $30 million or more, which most in the golf business know cannot be paid back on a stand-alone basis. Some local governments ignore this or are convinced their project has “intangible” community benefits that they are willing to subsidize.

Golfers do pay more for better golf, but they have their limits. For stand-alone financial success, your market analysis can’t overestimate new revenues and your architect can’t be extravagant. Golfers won’t pay for “gold plated” (or probably even brushed aggregate) cart paths, no matter how nice. In general, every penny counts in both actual cost and added value.

JJ Keegan of Golf Convergence Inc., a Colorado-based consultant, sees few projects spending over $4 million that “pencil out.” In addition, he notes that many fail to plan for near future capital expenditures, reserve funds and contingency, etc. It pays to be conservative, and keep contingencies.
 

Under spending

Many public course budgets started out “tight,” only to tighten up even further, as the budget is slowly diverted to things outside the original golf construction estimates, or simply lost to inflation when projects are delayed for years, without inflationary budget increases.

While typical of many budgeting processes, this result in reduced improvements, while revenue expectations remain unchanged. Naturally, the financial projections are harder to meet. Many renovations are initiated to “catch up” on decades of deferred capital spending. If your renovation inadequately fixes your problems, the deferred spending cycle starts again, with too much of a head start.

The best performers in the NGF study spent $2-5 million. Lower budget projects seemingly didn’t fix important problems, much less improve image. Spending too little is not the same as spending wisely.
 

S#@! you should have expected happens on schedule (i.e., poor future planning)

Keegan notes that a common error is to think of renovations as a one-time fix. “Golf courses are living organisms,” he says. “When renovating today, you must also consider cash flows in the future. You must generate sufficient cash flow to fund future capital investments, to preclude the need for unanticipated future borrowing, which encumbers long-term financial prospects.”

As the ASGCA/USGA golf course life cycle charts shows, some items – like well-built bunkers and liners still need replacement every 5-7 years (with shorter life spans if you skimp on drainage, liners and sand quality to meet budgets.) If your project is something less than a full rebuild, be sure to budget future revenues for ongoing capital improvements.
 

Unexpected S#@! happens with no schedule

Revenues can be affected by factors beyond your control. One course re-opened after a wonderful renovation in 2003, but soon encountered a washed-out bridge. Three years later, extreme heat killed their greens, and a two years after that, a large pipeline was constructed across the course. Each problem reduced rounds, and combined with some poor management, hurt the course’s image and revenues. Finally, in 2010, new management and rebranding started a more sustainable uphill path, an unlucky seven years after success was supposed to have started.
 

Complete the project late

Lost revenues are a big part of the financial equation. Many projects fast track schedules to minimize them. However, a realistic schedule, timed to ideal grassing dates, and with reasonable allowances for poor weather, and perhaps a contingency to sod more areas later in the grassing process are all good tools to meet your deadlines.
 

Starting the project late

Some owners lack urgency at the start of the project, not realizing the first month of the project is as important as the last. They delay signing construction contracts for procedural or other reasons, often making timely completion difficult, if not impossible.

An old saying goes, “A week delay early becomes a month delay later ... and a month delay at the end adds a year to the downtime.” So there you have it – the worrier’s guide to the worst that can happen in golf course renovations. Your renovation planning isn’t complete and thorough unless you consider all the things that can go wrong.

Jeffrey D. Brauer is a veteran golf course architect responsible for more than 50 new courses and more than 100 renovations.  A member and past president of the American Society of Golf Course Architects, he is president of Jeffrey D. Brauer/GolfScapes in Arlington, Texas. Reach him at jeff@jeffreydbrauer.com.