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Building a golf course

Golf is one of today’s attractive markets and the construction of golf courses promises to bring more profits. However, you need to be carefully prepared before investing boldly.

By Robert Bicknell

hochstein-sallandsche-scorecard

So, you want to build your own golf course, eh?

Okay, well first of all, you need to understand you are embarking on a project that never ends. This is not the same as producing an automobile where the moment it is made and sold your involvement ends. Not even close.

A golf course is a living breathing thing and costs more than half a million dollars, or more, per year to keep in top playing condition. Furthermore, it is a “service industry” where you have to keep customers and repeat customers happy each every time they come to the club.

This is where you’re going to want an experienced general manager and a highly qualified golf course superintendent on staff as they can tell you if the grass is correct for the location, if the design will be expensive to maintain, oversee construction on behalf of the owner and help protect the owner from any shenanigans.

Now, before you run out and start making plans and hiring designers, first you need to find a suitable location, one that guarantees easy access for potential players and a place where there are a lot of potential golfers. But, under the laws of Vietnam, you are not allowed to use prime agricultural land for golf courses – even though that law seems to get ignored from time to time.

In a nutshell, it’s all about location, location, location and the best locations cost a lot more money.

Once you’ve found your spot, it’s time to do your due diligence and figure out what your potential market is and how to reach them. If you enter into this venture without a solid business plan you’re going to suffer.

If you fail to plan, then you plan to fail.

After that, you will need to find a golf course designer, preferably one with a big name which will help you market the club later. However, some of the best designs come from some much smaller and less expensive designers, but in Asia, face is everything, so a big name helps.

For a really big name, figure anywhere between US$1.5 million to US$3 million. One thing to take into account is how the design will affect maintenance costs. If you get really fancy out there, it will take more manual labor to hand-mow certain areas as the big machines cannot get in there. Deciding on the right grass is also a major decision which can kill you if you’re not careful. Using the wrong grass in the wrong location can increase your maintenance bill by hundreds of thousands of dollars per year.

Your superintendent can look at the plan and estimate the maintenance for it and advise the owner.

Building the course itself is very hard to estimate in general because it depends on how much cut and fill there will be and how intricate the design is. When the rough parts are completed, you need to get a top quality shaper in there to do the finishing work. This is also expensive, but worth the money.

Drainage and irrigation are areas where owners typically try to save money and it usually backfires on them badly. There have been many courses I’ve been called in to “rescue” and fixing or replacing drainage has usually been necessary. The same goes for irrigation. The pumping system alone is more than US$100,000, so it must be the right one for the job.

While construction is going on, it’s time to order the golf course maintenance machines. This needs to be done at least half a year in advance as it takes time to arrive by ship. Again, the GC superintendent will make a list of what s/he needs and submit the budget which the general manager and owner will review. Machines for the GC maintenance department can total a million dollars easily.

As the grass grows in, you will need fertilizers and other products to keep the grass healthy. This is also expensive, and while many owners try to skimp by using local fertilizers they are usually the wrong kind, or size and end up burning the grass.

Now then, do I need to start in on the clubhouse design, construction and staffing?

Suffice to say you “could” build a golf course for $10 million (not including land) all ready for play, but it won’t be anything great. A modern, high quality golf course can cost more than $1 million dollars per hole to build, even here in Vietnam.

So, having spent at least $25 million dollars on everything just to get open, how will you earn back your investment?

I’ll give you a hint – when you get your project license, make sure it allows you to build and sell villas, unless you’re on the ocean in a hugely popular resort area that can depend on a constant flow of tourists.

Bottom line – a golf course isn’t for the faint of heart. It’s a huge ongoing investment and requires careful planning, and even more careful operation from an experienced management team.

Posted by Hà Phan
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