Battling golf clubs’ existence hinges on nod to reopen
Managers crunch budget scenarios but are in the dark about when business will resume
Most golf estates largely rely on three sources of income: levies and subscriptions from homeowners and club members; revenues from golf course-related sales such as green fees and golf buggy rentals; and food and beverage revenues.
Due to the continued lockdown, golf clubs remain closed despite plans presented to the government that support the contention that the courses can be opened while adhering to and bettering those protocols already being used by businesses that have been allowed to open. The result of the continued closure is that most of these estates are struggling on two of eight cylinders.
Francois Schoeman, COO of Gems Property Management, reminded me about comments I had made in a previous article about the government’s reactions to the pandemic, seeking out those businesses with underlying business health issues.
This reminder was made when he told me that Vaal de Grace, the country’s first Nick Price signature golf course, had been forced to close down because of the lockdown restrictions, coupled with pre-existing internal challenges.
Morné Botha, GM at Pecanwood Golf & Country Club, said he is running out of AAA batteries for calculators because they have been through so many potential budget scenarios at Pecanwood. The additional challenge for everyone is that all these types of calculations are being made with no idea when the golf courses in SA will reopen.
If there is one thing that business loathes it is uncertainty.
I asked Jeff Gilmour, president of the Association of Residential Communities (ARC), about the impact in terms of ARC’s member estates, both those with and without golf courses.
“The game of golf, the related hospitality elements and the attendant revenues in residential golf estates is suffering greatly. Even with no income from these areas, the essential golf course maintenance must continue, while the need remains for facilities to keep paying their service providers and the salaries of staff associated with the golf course during the continued lockdown.
“The same challenges are being experienced by residential communities who do not have a golf course. With the increasing financial demands on homeowners, many of whom have no income with their businesses closed or their jobs in suspense, there is a growing demand from homeowners to get some relaxation on the payment of their levies,” said Gilmour.
“These requests represent a vicious circle being experienced nationally and they are being made to homeowners’ associations at a time when they still need to service the costs of essential service providers to cover the maintenance of key infrastructure such as security fences, roads and park areas.”
For the golf clubs, the uncertainty is particularly dire as the safety net available to many of the estate courses is not in place. Chris van der Merwe, GM of Stellenbosch Golf Club and chair of the Club Managers’ Association SA (CMASA), has previously told Business Day: “Someone said we are all in the same storm, albeit in different boats. We approached the minister [of sport] because with golf’s ‘boat’ we are confident we can comply with the regulatory requirements, at least as well as any other sector that is open.
“The real concern is that as so many clubs are NPOs, they have quickly become marginal and will close,” Van der Merwe said.
The following stats from a recent survey of 180 clubs make for stark reading: 11% of clubs cannot survive under current circumstances, 25% of clubs can survive for one month, 41% can survive for two to three months, 15% can survive for four to six months, 2% can survive for seven to 12 months, 4% can survive for longer than 12 months.
“Thirty-four percent of the clubs who participated in the survey fear they will have to close their facilities if the lockdown continues beyond one month and only 21% of golf clubs in SA indicated they could keep their facilities going, if the lockdown continues for longer than four months.
“These are very concerning statistics and represent potentially irreparable harm to the game, especially in terms of the smaller community clubs, the closure of which will leave certain areas and regions with no golf at all,” Van der Merwe said.
In his 1971 best-selling ballad American Pie, Don McLean sang about the “day the music died”. SA’s minister of sport has commented favourably on the recent presentation made to justify the reopening of the golf courses. Let us hope this provides the motivation for permission to get the clubs open again. If it does not, 2020 might prove to have been the year during which up to half of SA’s golf clubs suffered the same fate as the music in American Pie.
Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.