Another net loss of U.S. golf courses in 2010

        The National Golf Foundation has reported that for the fifth straight year, the U.S. suffered a net loss of golf courses.  According to the NGF’s 2011 Golf Facilities in the U.S. report, 107 18-hole-equivalent courses closed in 2010 compared with 46 new course openings; the report does not count courses that are being renovated.  The net loss in 2010 of 61 golf courses brings to 220 the total net loss over the last five years, or 1.5% of the total inventory of 18-hole courses.

        Other interesting data from the report:

• Golf courses opened in a total of 29 states.
• 60% of the new golf courses were daily fee
• 80 golf courses are currently in construction (excluding renovations)
• Pennsylvania, Illinois, Florida, North Carolina and Texas opened the most courses.
• With 16.5 courses, the South Atlantic region had the most openings.
• At the end of the year, the 15,890 golf courses (18 & 9 holes courses) in the U.S. was just 167 less than the all-time high in 2004.  The number of 18-hole equivalents stands at 14,904.5.

        Despite some encouraging signs that the U.S. economy might be coming out of its deep freeze, albeit

slowly, 2011 should continue the trend of net closures of golf courses (my opinion, not the NGF’s).  Dozens are currently for sale in all regions of the country, and a punishing winter across much of the nation will only add extra burdens to the costs of spring cleaning at many of those courses teetering on the edge of bankruptcy.  We heard recently that Taberna Golf Club in New Bern, NC, run by an earnest young couple in a stable community of many retired military veterans and active duty personnel from the nearby bases, was seeking bankruptcy protection.  Based on our visit to Taberna a few years ago, we have to say if it can happen there, it can happen anywhere.

        Of course, bad news for someone always spells opportunity for someone else, and lately I have received inquiries from readers curious about some golf courses for sale and from others who wonder if a golf course in trouble but likely to be purchased by members or some other entity might offer a special opportunity for discount club membership or even lower real estate prices in the surrounding neighborhoods.

        The answer is “maybe,” but never forget that every reward has risk attached.  Do your homework, ask a lot of questions, insist on seeing financials…in short, trust but verify without putting in any investment up front.  This can mean a trial membership in the golf club or renting a home in the community adjacent to the golf course before you buy.  In this environment, if pays to kick the tires hard.