FUTURE FOR THE BUSINESS OF GOLF!  (February 2008) 

Although 2007 has shown some gains nationally, the market as a whole is still recovering from previous slowdowns in rounds and revenues primarily because of economic uncertainty.  The competitive landscape has driven operators to create or enhance customer relations programs and retain golf business professionals to improve financial positions.   The long-term stability of many golf courses will be highly dependent on continuing to drive revenues rather than implement non-strategic cost reductions.  Many existing properties in a variety of urban and rural markets are losing the competitive battle and owners lack the resources for a short-term turnaround, therefore, alternative uses are being considered.  The majority of golf projects in planning continue to include a residential real estate component.  We will see more remodeling and renovations in the coming year, as more owners realize they cannot continue to realize negative cash flows.  We project golf business in 2008 will be a slight improvement over 2007, and we believe the golf story will be more buy/sell arrangements, turnarounds and debt restructuring.  Spear Consultants is well positioned as an established and trusted advisor to owners seeking guidance on buying/selling, marketing and financing golf properties. 

Project evaluations by Spear Consultants have continued to be in high demand as more owners, developers and project leaders continue to apply a “public funding” approach for acquisition of existing courses as well as new course construction.  This approach has been most successful for public-access properties in rural areas.  A government guaranteed loan program provides the opportunity to finance golf courses with long-term amortization at a desirable rate.   This   program was started in 2003, and through 2007 Spear Consultants has assisted in over forty public funding requests.  Of these, 20% are new projects and 80% are turnaround opportunities.  With public funding the approach and results are not always the same, but all clients have benefited from our efforts.  Either they were successful in achieving their goals, or implementing a program targeting the market with attainable projections.