An Irish golf club that relies on tourism has detailed that it has missed out on nearly £2.7 million of income in the last year, making an overall loss of more than £1.15 million, due to Covid-19.
While many golf clubs in Great Britain and Ireland have had a bumper year due to the surge in demand to play the game, some of those that are more reliant on revenue streams such as hotels, overseas visitors and restaurants have had the worst year since they were established.
Lahinch Golf Club was the host of the 2019 Irish Open and ‘has run out of its own cash’ due to the impact of Covid-19, reports the Irish Times, which states that the pandemic has resulted in the club making ‘a loss of 1.3 million euros [about £1.15 million] for the year’.
Chairman Martin O’Sullivan told members via a virtual AGM that the club’s projected income for 2020 has been reduced by almost three million euros (about £2.7 million) due to the loss of overseas visitors as a result of Covid-19.
The club had projected to make nearly £2.25 million from green fee income alone this year, with green fees selling for nearly £215 each during the peak summer season.
However, with golf tourism massively affected by the pandemic and Lahinch reliant on foreign visitors, green fee income for 2020 is now projected to be less than £200,000, A figure that is set to at least more than double next year.
At the start of the year the club was also projecting a £435,000 gross profit from its pro shop for 2020, and that has now been reduced to £62,000 for the year.
O’Sullivan stated that “the impact of the Covid-19 pandemic on the club’s finances cannot be overstated enough”.
He said the club was projecting an operating loss of more than £350,000 for 2020 even after a “significant reduction in overheads”.
After depreciation costs are taken into account, the club’s balance sheet for 2020 will have taken a £1.1 million hit, he added.
Overheads have been reduced by £820,000 and the club has received nearly a quarter of a million pounds from the Irish government’s wage subsidy scheme, which, he said, had allowed the golf club to maintain full-time staff.
“These negative results come on the back of a significant deficit for 2019, a consequence of hosting the very successful Irish Open,” he said.
At the meeting, members were asked to sanction a 7.5 percent subscription hike for 2021 to help plug some of the funding gap left by the drop in green fee income.
Over the past three years the club has invested more than £2.4 million in capital expenditure including essential repairs on the club’s coastal defences and the development of the club’s indoor performance academy.
“These significant projects reduced our cash reserves, and when the financial impact of hosting the Irish Open is also taken into account, the onset of the Covid-19 pandemic was like the perfect storm hitting the club, from a financial perspective.
“All the funds have now been utilised and the club has no cash of its own.
“We intend to ensure that the club trades its way through the current crisis and, over time, build up cash reserves similar to what occurred following the financial crisis of 2008 to 2012.”
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