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NGF Holiday Island Country Club Review of Operations

NGF Holiday Island Country Club Review of Operations. Prepared for: Holiday Island Suburban Improvement District. Presented by Richard Singer Director of Consulting Services National Golf Foundation Consulting, Inc. (561) 354-1642 rsinger@ngf.org.

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NGF Holiday Island Country Club Review of Operations

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  1. NGFHoliday Island Country ClubReview of Operations Prepared for: Holiday Island Suburban Improvement District Presented by Richard Singer Director of Consulting Services National Golf Foundation Consulting, Inc. (561) 354-1642 rsinger@ngf.org NGF - KEEPING GOLF BUSINESSES AHEAD OF THE GAME SINCE 1936 1150 SOUTH U.S. HIGHWAY ONE, SUITE 401, JUPITER, FL 33477 PHONE: 561-744-6006 ∙ FAX: 561-744-9085 ∙ www.NGF.org

  2. Holiday Island Country Club Introduction • National Golf Foundation • Municipal golf facility consulting • NGF Staff – Richard Singer • Not advocate for any position other than Holiday Island Suburban Improvement District success w/ Holiday Island CC • Why we’re here: • Review the operation, economic potential, physical condition of 18 hole Holiday Island CC, 9 hole Island golf course and clubhouse • Review the market environment • Provide recommendations and alternatives for maximizing the economic potential of golf within the District. • Methodology: • Meetings Facility inspection • Market analysis Site analysis

  3. Holiday Island Country Club Key Components of the Study • Physical condition of Holiday Island CC • Recent performance of Holiday Island CC • Status of Holiday Island area golf market • Identify how Holiday Island CC can maximize potential • Help HISID create a sustainable golf facility for long-term future success • Present NGF Consulting findings and recommendations

  4. Holiday Island Country Club General Impressions • Holiday Island CC has the basic design features and location to be a successful public golf course. • Aging infrastructure, especially related to turf conditions and irrigation. • Lack of adequate maintenance staffing, due to low revenue and low expense structure. • Remote location with small proximate population and limited local golfers support. • Inconsistent operating policies over time, leaving a perception in the region that HICC is a private, member-only club. • Declining golf market due to increased competition, reduced discretionary incomes, aging population, and changing demographics.

  5. Holiday Island Country Club – 18 Hole Course

  6. Holiday Island Country Club – 9 Hole Course

  7. Holiday Island Country Club – Physical Review Key Issues We See • Course is more than 40 years old, renovations/upgrades will be required in the near future (within 3 to 5 years) • Turf - some form of upgrade or replacement • Cart Paths - some upgrade and improvement • Irrigation - problems with breaks and coverage, not fully efficient • Greens - Bermuda contamination, some disease and nearby tree/root problems • Tees - should be improved with stronger turf and a leveling program • Bunkers - should be improved with better sand a linings • Driving Range - add a few tee stations, more length, and better targets • Maintenance compound would benefit from general “face-lift”. • HICC should upgrade on-course “niceties” • Course signs and markers inaccurate • Golf holes (cups) are raised too high • Yardage markers are not complete • Water stations need improvement

  8. Holiday Island Country Club

  9. Holiday Island Country Club – Operational Review Key Issues We See • Operating policy has been inconsistent, switching between member-only and semi-private, or daily fee • Holiday Island CC is operating with a staff that is barely sufficient to sustain operations • HICC is being maintained to match budget, as opposed to golf course needs • The absence of a true “marketing plan” to define a strategy, establish goals and define specific activities • The total revenue earned at HICC is much lower than average for public golf courses of this type

  10. Holiday Island Country Club External Factors • Decline in overall demand for golf in this local market • Population growth in the area is at or below the total U.S. rate • Course supply in the area suggests a “saturated” market – small population and lower-than-average golf demand to support golf courses • Significant downward pressure on green fees in this market area. Very few northwest Arkansas area / southwest Missouri golf courses are able to charge in excess of $40 or $45 per round (w/cart).

  11. Holiday Island Country Club Key Operational Findings • Holiday Island golf system is basically set up in a traditional municipal golf format with full District control of facilities and labor. • No indication that the facility is being mismanaged in any way, but the golf course is under-staffed to provide a level of high quality maintenance. • HICC is operating a good quality golf course facility in a generally rural location with a limited customer base to support operations • Course is earning total revenue less than half the U.S. 18-hole golf “standard” of about $1.0 million in revenue • District has worked hard to reduce expenses in the operation to match the low revenue, but this has in part contributed to the reductions in maintenance and facility improvement • Staff includes a Class A-1 PGA Golf Professional, certified for the past 24 years, as well as, a GCSAA Class-A Superintendent with 36 years of golf maintenance experience.

  12. Holiday Island Country Club NGF Recommendations • Commit to a semi-private structure with renewed focus on attracting non-local golfers • Enhance marketing, especially related to technology (internet, email, social, etc.) • Improve the physical condition of the property with additional maintenance staff • Complete the physical upgrades needed, focusing on turf quality as highest priority • Implement player development activities that appeal to attracting new golfers • Make slight increase adjustment in playing fees bringing the Activity card average discount to around 20% from peak green fees, and commit to a program of annual fee adjustments to account for increasing maintenance costs.

  13. Holiday Island Country Club Preliminary Financial Analysis • NGF estimated 15,850 to 22,000 rounds in 2015-2018 period. • NGF projects facility revenue in the $450,000 to $700,000 range between 2015-2019. • The annual net income after all expenses is not likely to be positive, although direct golf losses can be reduced from over $200,000 projected for 2015, down to below $100,000 by 2017 and $65,000 in 2019 • HICC operation, as it currently situated, is not sustainable for the long term, as it not likely to be capable of sustaining basic day-to-day expenses. It is also certain that the Holiday Island CC operation will not be able to cover any large-scale capital costs and it is likely that the facility will operate with continued losses

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