Most golf estates largely rely on three sources of income, writes John Cockayne – levies and subs (from homeowners and club members), revenues from golf course related sales i.e. green fees, golf buggy rentals, etc. and F&B revenues.
With the continued lockdown, the golf clubs remain closed, despite plans presented to government, which support the contention that the courses can be opened while adhering to and bettering those protocols already being used by businesses, which have already been allowed to open.
The result, of the continued closure, is that most of these estates are struggling along on two of eight cylinders.
Francois Schoeman, COO of GEMS property management, reminded me about comments I had made, in a previous article, about governments’ 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 only Nick Price signature golf course in the region, had been forced to close down because of the lockdown restrictions, coupled with some pre-existing internal challenges.
Morne Botha, the GM at Pecanwood Golf & Country Club, told me that 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 here in South Africa will re-open again.
If there is one thing that business really loathes, it is uncertainty.
I asked Jeff Gilmour, the President of ARC (Association of Residential Communities), about the impact that he is seeing 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 from these for courses 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 lock down.
“The same challenges are being experienced by residential communities, which 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.
“These requests represent a vicious circle being experienced nationally and they are being made to HOA’s 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.
In a discussion with Chris van der Merwe (GM Stellenbosch Golf Club and Chairperson of the Club Managers’ Association SA, CMASA) for a previous feature in Business Day, Chris commented as follows:
“Someone said that 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 that 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, to use your term, and will close. The following stats make for stark reading from a recent survey of 180 clubs”:
- 11% of clubs cannot survive under current circumstances
- 25% of clubs can survive for 1 month
- 41% of clubs can survive for 2-3 months
- 15% of clubs can survive for 4-6 months
- 2% of clubs can survive for 7-12 months
- 4% of clubs 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 region with no golf at all.”
In his 1971 best-selling ballad ‘American Pie’, Don Mclean sang about the ‘Day the Music Died’.
South Africa’s Minister of Sport commented favourably on the recent presentation made to justify the reopening of the golf courses.
Let us hope that this provides the motivation for the necessary permissions to get the clubs open again. If it is not, then 2020 might prove to have been the year during which up to half of South Africa’s golf clubs suffered the same fate as the music in American Pie.
Post scriptum:
I am happy to report that South Africa’s golf courses opened again on 01 June 2020 for members’ golf within the strict health and distancing protocols being followed almost everywhere.
Why it took so long for golf courses (everywhere) to be re-opened remains a mystery that we shall explore.
The actual damage caused by the lockdown in terms of the findings from the survey referred to by Chris Van Der Merwe in part 3, still needs to be calculated as the final casualty list has yet to be finalised.
John Cockayne Mobile 0027 (0) 73 8967931 & Email cathco@mweb.co.za
John’s eclectic business experience in tandem with his writing skills – makes him much sought after as a business consultant and writer. In terms of the latter, and amongst a number of current roles, he is the golf editor with, or a columnist for, a number of top platforms and publications including Destination Golf Travel Global, GolfVistaSA, GolfRSA and Business Day.
John is a very experienced event manager, has had extensive marketing experience, worked as a project consultant on three continents and has developed and run a travel agency and two tour operator businesses. He is also a Founder and Life member of the PGA of South Africa and is no stranger to working inside the ropes having held operational roles as a head professional, director of golf, club manager, coaching director and as a tournament official on the Sunshine Circuit.