24/7 Indoor Golf Sim (Without a Bar) - A Viable Business?

[FlyingSpaniard]

Hello all, I've read a few threads on this topic but I would like to pitch my vision and see your views as of this date.

I'm thinking of an indoor golf sim business in the heart of a populated city (more details on the latter below).

Here are some core features I'm envisioning:

- Located in central downtown, in a neighborhood that has really high business and residential density
- Around 4 bays, possibly with a combo of either Trackman or Skytrak (maybe start with 2 and scale up), in around 180 sq. meters
- Vending machines with a premium selection of beers and snacks, plus maybe some golf accessories (gloves, balls, etc.)
- Small lounge areas to wait and sit for a drink, but no service
- Users book and pay 24-48h in advance
- Pricing around 25€ / 30min or 35€ / 60min
- Borrow clubs for free (maybe not latest gen, but something good and in good condition) or bring your own
- Single employee during regular business hours (9am - 5pm, Mon - Fri) for administration, basic sales, and assistance (would probably be me to start)
- 24/7 access with fingerprint or other digital mechanism

Some possible "extended features":

- Memberships (pay X for Y hours) or bulk vouchers
- Cameras in all bays... Automatically record your swing and form a diary... There would be a members web app that would aggregate your Trackman stats, swing vids, etc. (my expertise is in software dev so I think I'm fairly well-equipped to pull this off)
- Small leagues or social events
- Book instruction or bring-your-own instruction
- Members-only area with a gym (squat rack, oly bars) and space for drills, chipping, putting, etc. (would need about twice the space, don't know if this makes sense economically)

Some context:

- Starting city would be Madrid, Spain... Decent all-year weather except the harshest month of winter around December/January
- Downtown population around 3.2 million (double that in the metropolitan area), very dense city center
- Plenty of golf nuts to go around, lots of affluent people downtown
- There are a couple public / municipal golf courses within 25km, and a good number of private courses in that radius
- Most people living or working downtown therefore need to drive 20-35min to the range regularly
- Real estate is expensive, but my research shows rent around 3.000€ / month might do the trick for a good location
- Peak times might be something like 1pm - 4pm (lunch time - here it's very late) and 6pm - 9pm (afterwork)

I've made an Excel financial model and my first impression is that the business would hinge on aggressively discriminating between peak and off-peak usage, with peak times being reserved for affluent golf nuts working in the area, and off-peak usage being sold to local resident golf nuts at discounted rates.

With something like 80% utilization at peak hours (sounds about enough for the service to not feel overly crowded) and 10-20% off-peak or long-tail utilization, the numbers look good under my assumptions. However, I have zero experience in this type of business, and the common wisdom in my research is that "you need a bar", but I don't think that would be easy or profitable in my area and economic context (there are a million bars per square foot in Madrid), nor would I want to, honestly.

I am conceiving this as a lifestyle business, but obviously, I would like to make good money from it. If this works, I don't see why it couldn't be turned into a mid-sized chain or franchise around large cities in Europe or even the US.

I know many of you are American, and possibly live a suburban or country life where none of this makes sense, as you are used to drive around, so driving 20min to a golf course vs. going to a sim might make no sense. But I suppose some of you might know what downtown city is like, and how it's not always easy to drive out to the course or driving range...

Regardless, given the context, do you think this could work? Why or why not?
 

[ChetlovesMer]

3 minutes ago, FlyingSpaniard said:

- Around 4 bays, possibly with a combo of either Trackman or Skytrak (maybe start with 2 and scale up), in around 180 sq. meters
 

I'm not sure what it's like where you are. But there have been a few of these here which have done well and a few that haven't.

Firstly, I think you need to go GC quad at the minimum. Skytrak won't cut it. The expectation where I live is CG quad. There are actually a few new technologies out there which may also work, but I think GC quad is an expectation. Maybe others will comment. 

From what I've seen around here, the only ones of these that have "done well" are ones in which they organize leagues.  For example, there's one around here which hands out winter league sign ups for winter time near the end of all the summer out-door leagues. The folks playing in the summer league want to keep on playing so they sign up and get into a winter league. 

[FlyingSpaniard]

3 minutes ago, ChetlovesMer said:

I'm not sure what it's like where you are. But there have been a few of these here which have done well and a few that haven't.

Firstly, I think you need to go GC quad at the minimum. Skytrak won't cut it. The expectation where I live is CG quad. There are actually a few new technologies out there which may also work, but I think GC quad is an expectation. Maybe others will comment. 

From what I've seen around here, the only ones of these that have "done well" are ones in which they organize leagues.  For example, there's one around here which hands out winter league sign ups for winter time near the end of all the summer out-door leagues. The folks playing in the summer league want to keep on playing so they sign up and get into a winter league. 

Thanks for the insight.

Outdoor leagues as such here do not stop in the winter... They only decrease in frequency due to reduced daylight times, but there is still plenty of activity to go around during the weekends. Courses will only close when it's 0C, which is a couple of days during the winter at most... A typical winter day here is a sunny 5-10C (40-50F).

The target market here would be city-dwellers who have a hard time commuting out to the outdoor courses and ranges. As someone who does that 4-5 days a week, it gets tiring despite being obsessed with the sport. Building sims is not a viable option for loads of people here either since we live in apartments or multi-family units.

Regardless, I do see leagues working in the afterwork hours (6-9pm) in the winter and would definitely see a way of organizing them, I just don't think the business model can rely entirely on that to succeed.

[iacas]

• 180 square meters sounds awfully cramped considering all the stuff you think you're putting in there.
• Uneekor make overhead launch monitors that work for righties and lefties. If you use a SkyTrak or any camera-based system on the ground (GC3, GC Quad, etc.) then it's going to be a pain for lefties.
• Golf Evolution runs 6am to 9pm and members have key cards. 24/7 access is asking for trouble, IMO. Plus people will be TICKED if something doesn't work or they need some service and nobody's there.
• Instruction probably isn't super likely if they're going to pay 25€ or 35€ plus their instruction fee. But maybe if you don't charge the instructors it could be okay.
• I agree you likely need a bar or something. Alcohol has high profit margins, and it encourages people to stay for more than 30 or 60 minutes. Maybe you can be oriented NEXT to a bar and work something out with them so they can give you bar food and alcohol and you get a cut? (Because having a bar will also mean you need more space).
• Stuff will break. You'll have downtime. People will hit balls everywhere. Don't under-estimate how much space you need with 16 people in your area, walking around, swinging clubs at 100+ MPH (and some are lefty).

That's just off the top of my head.

[Ty_Webb]

Regarding the bar, there may be a lot of bars in the vicinity, but you're not competing with them. You're not going to get people coming in for a drink. They're going to be playing golf/hitting balls and giving them access to beer while they do it is definitely going to encourage them to sit around for longer. The other thing I'd say is if you wind up with only 2-4 bays, then if it does end up being popular, people will get upset that they can't get access, especially if they've paid for a "membership". 

There are a couple of places that are like this in the city near me. Both have plentiful gym space, so it becomes a workout/practice area. They're both reasonably popular I think (or at least used to be). One of them is super high end and charges annual memberships to be allowed in there. It costs about what a decent country club membership around the area would cost (think $1,000 a month). Personally I can't believe that they make money on that basis, but they have high end gym equipment, about 5 full simulator bays and a large putting green. They also have a couple of the top instructors in the area and some top end fitness instructors as well. The other is a more regular run of the mill gym that has simulator space. That one is also members only, but it's about $250 a month. They have three bays and you can book them. The driving range that is in the city costs 26c a ball by the way. 

There are spots in London that work like what you're describing, but they serve alcohol (and are pretty high end) and have 5-6 bays with trackmans in all of them. I'd go with GC Quad or GCHawk or at the very least GC3 or one of the Uneekor ones. And I'd think long and hard about my membership strategy/keeping people happy/meeting expectations.

All of this by the way ^ is not advice. Just my musings 🙂

[Shorty]

I am very interested to know what insurance costs you have factored into your proposition. Especially as you are proposing chipping and weight lifting and hitting golf balls as well as drinking alcohol in a very small area. Not to mention 24/7 access with the premises unattended and potentially in excess of $100,000 worth of sensitive electronic equipment. You also have to understand that many of your clients will not be golfers, but non golfers out to treat the place like an amusement arcade.

[Club Rat]

On 12/9/2021 at 11:07 AM, FlyingSpaniard said:

Here are some core features I'm envisioning:

Parking for customers? In a Downtown when parking is a premiun?
Running any operations without Staff will lead to failure, IMO.
Regaining upfront expenses over a short period of time is highly unlikey.
Any startup business will take several years to establish a customer base.

I think your expectations are likey too high.
And, there are many other costs associated with operating a business which your not forseeing.

[pganapathy]

25 to 35 Euro sounds high to me because I live in India.  Wondering how much green fees are in Madrid and surrounding areas.  If it isn't much higher, people may well choose the course over a simulator.  Ensure your pricing isn't so high that you drive people into using the course