Since Topgolf began picking up steam in the U.S. around the start of our current decade, its facilities have generally opened in suburban strip malls and mixed-use developments. They're often seen next to freeways, like the one I pass constantly on I-10 driving into Houston.
But it's becoming apparent that the future expansion model may come straight to your local golf course.
Topgolf has been debated over the years about whether or not it helps or hurts golf courses. Some suggest that people are choosing Topgolf over rounds at traditional facilities.
Golf Advisor's Mike Bailey recently visited a facility in the Houston metro area and learned about players taking up the game at Topgolf and transitioning to the course. Whether or not you consider it a traditional golf experience, it is an encouraging example of a golf-inspired business concept that is proving wonderfully profitable.
But is the end-game here that Topgolf ultimately supports local golf facilities?
That may be the case if the news Wednesday in Honolulu is any indication. City and county officials voted to conditionally award Topgolf operating rights at the Ala Wai Golf Course. The yearly lease will net the facility $1 million annually plus 1% of gross revenue (which should be a lot). (What muni facility couldn't use that?). From the Honolulu Star Advertiser:
Guy Kaulukukui, director of the city Department of Enterprise Services, said the deal will bolster declining revenue at the city’s six courses, where expenses exceed revenue by several million annually. While the Ala Wai course has been the city’s busiest by far, Kaulukukui said attendance there has dropped off to 120,000 rounds. At its peak, attendance at the Ala Wai course was about 220,000 rounds, causing the Guinness Book of World Records to dub it the world’s busiest course. Kaulukukui said the Ala Wai course’s driving range earns between $500,000 and $600,000 in annual gross revenue, a figure he expects will quadruple to about $2 million annually under Topgolf Hawai‘i.
Guy Kaulukukui, director of the city Department of Enterprise Services, said the deal will bolster declining revenue at the city’s six courses, where expenses exceed revenue by several million annually.
While the Ala Wai course has been the city’s busiest by far, Kaulukukui said attendance there has dropped off to 120,000 rounds. At its peak, attendance at the Ala Wai course was about 220,000 rounds, causing the Guinness Book of World Records to dub it the world’s busiest course.
Kaulukukui said the Ala Wai course’s driving range earns between $500,000 and $600,000 in annual gross revenue, a figure he expects will quadruple to about $2 million annually under Topgolf Hawai‘i.
Ala Wai isn't the only case of Topgolf being considered as a kind of savior for a tired golf course. A proposal in El Segundo, Calif. was five years in the making that would bring a Topgolf to the Lakes at El Segundo, a struggling 9-hole executive course with a driving range. Ultimately the City Council narrowly voted down the proposal and have put out another RFP for the future of the site.
Topgolf's triple-deck facilities are certainly more imposing than your smaller, traditional on-course driving range and attract crowds well after daytime business hours. In fact, the facility at Ala Wai is expected to run $50 million (paid for by Topgolf).
That said, folks in the Hawaiian golf industry are excited at the prospect.
The City of Honolulu has offered Topgolf Hawaii a conditional award to enhance the driving range at iconic Ala Wai Golf Course. The public-private partnership is the first of its kind in Hawaii and will re-energize the golf industry in the Islands. https://t.co/xiAdE1KcMA; … pic.twitter.com/6NXNPWx9Dl
— Mark Rolfing (@MarkRolfingGC) May 2, 2018
Very cool news. @Topgolf; selected as the golf entertainment center for the driving range area of the Ala Wai Golf Course. This multiplies number of spots for driving range users and creates a fun place for golfers and non-golfers to eat, drink & enjoy fun #golf!
— Danielle Tucker (@TheGolfClub) May 3, 2018
That said, one of the things that has always bothered me about metro golf course driving ranges is that far too few are lit or open very late. Others will have a kind of arbitrary "last bucket" time that occurs an hour before sunset. For example, here in Austin if I want to go hit balls after I put my daughter to bed around 7:30 pm, I'm pretty much out of luck unless I drive up to Topgolf, but there is a waitlist on many nights for a hitting bay.
As golf courses in expensive urban cores grapple with how to keep the bills paid and assure residents that golf isn't creating municipal debt, some have sold or leased off land for development. Laying Topgolf on top of the existing driving range acreage seems like an intriguing option and one that is more tied to the game than simply making a rent check from new buildings that could ultimately hurt the golf experience further.
Do you have a municipal or daily-fee facility in your area that would benefit from a Topgolf makeover? It could happen...
Interesting idea, but Top Golf could be a flash in the pan. Talk to anybody that has gone there more than once- and you hear the same thing, repeatedly- it costs too much. Top Golf has taken a great idea and gotten greedy. People don't want to drop $50 or $60 for an hour of hitting off fake-grass mats. The food is mediocre- and its not the most sanitary thing trying to eat and swing Top Golf's cheap golf clubs at the same time. You can't bring your own driver- you have to use a 1940s style, dumbed down driver. Met a guy who works at a Top Golf and says that on average, they EACH net $24M/annually. That's good if you own it (privately held)- not if you're a customer contributing to their breathtaking profit. They take a whole lot of space, and land is money. It isn't golf- its an entertainment phenom, just like bowling alleys were 40 years ago. It will not last in its current form.
220,000 rounds a year? That's physically impossible - over 600 golfers a day. I can believe that for the entirety of the muni portfolio, but not one course. And it if is now 120K at Ala Wai and it is losing money? Something is tragically wrong with the operations. Also, municipalities looking to replace real golf with Topgolf or its clones (Drive Shack, etc.) should be aware of the lease deals as more get published. Hawaii gets $1 million plus 1%. Burlingame CA gets $1.5 million plus sweeteners. El Segundo CA was offered $600K and voted it down. So Topgolf is playing the numbers game and measuring what they are willing to pay against the desperation of the municipality looking for a bailout. And finally - please face the facts. Topgolf is a competitor for the discretionary dollar, just like movies, bowling, and other discretionary pay-for-play activities. How badly will they want to share their customers with area golf courses? It does not make business sense. It just doesn't.
Two questions: 1/ When you only need a few swings to warm up before a round, many courses are free. Will you have to pay TG prices for that warmup? 2/ typically you are required to use modified clubs ( or your irons but no woods) and chipped balls. Will that remain the same or can you use your own clubs?
We had a group of 13 for a birthday party for my 13 yr old grandson. 4 experienced male golfers, 5 women (2 golfers 3 non) and 4 non golfing teenagers. It was a fun Saturday morning with a brunch buffet and beverages. Everyone had a great time, but I'm not sure if anyone would trek out there just to use as a driving range. Many of the tees were in use, mostly by groups of all ages. So in conclusion This will never replace a driving range for accessibility, but be a social thing to do that novices can enjoy and perhaps even score better than the experienced. I do have a couple of golf courses in my area (a beach resort) that could benefit from a Topgolf makeover. They do not get a lot of play and are struggling to stay alive financially as evidenced by the lack of maintenance and deep discounting to try to bring in players. It would be a hit with families on vacation especially on rainy days. Who want to waste even 1 day of vacation. Indoor Putt-putt courses have long lines.
I think Topgolf will ultimately complement normal golf courses. The practice at Topgolf is to hit targets and on golf course it is the same thing. Playing at one could lead to the other.
GeneralWithout
Whether you are 25 or 75 and still working , time is everything when the commute is factored in.
Rounds can be timely and the profit made on a sale with all the attached strings in vendor partnership does not justify a client round. Everyone who wants to swing a club should have also the added attributes of Topgolf being offered to at least try. It may not be Rosedale G& CC but it is an outing sons and daughters can get the feel of with mum ,dad or guardian. Who knows where there lies another Bobby Jones, Arnold Palmer, or a rising Dina Shore setting the foundation of women’s golf. What a beautiful way to learn honesty and discipline within self first and without with others playing the ball where it lies which in itself is a unique word as we address the ball “ Hello Ball” I think Jackie Gleason exclaimed..
I'm a 45 yr golf veteran and have seen many great courses
go under from New York to Miami.
I've also noticed a dramatic drop in youth play.
It's sad even though I have certainly been blessed to have
played during golf "golden years" 1970 to 2008
I like this idea
Anything that helps is encouraging
Good luck
Very much interested in all aspects of the subject.
as a golfer who prefers regular golf at a golf course, practicing at a driving range is something I do now and then. the cost of a bucket of golf balls is in the 7 to 10 dollar range. I visited a Top Golf facility near me and the cost of one hour on their range was $50. if you bring a group that can be divided amongst them, but for me Top Golf is too expensive for my needs.
me too. They are charging way to much