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View Full Version : Do Tennis Centers make any profit in the US?


In D Zone
10-08-2007, 12:32 PM
Just curious! Most tennis club / centers outside the US are privately run because there are limited public courts (indoor/ outdoor) available (atleast that's all I have heard and read).

Aside from funding provided by the city or local gov't. Will a private club survived if a new club would open today?

I was trying to get the local city gov't to consider building an indoor court, they resisted and said that for a facility to survived (you are looking atleast to have a minumum of 8 courts).

movdqa
10-08-2007, 02:55 PM
I think that it's hard to build a new indoor club in a lot of places due to the cost of land and construction materials relative to the number of people that benefit. Basketball courts are more efficient - they serve more people for the same amount of space.

Midlife crisis
10-08-2007, 03:00 PM
The private club I belong to has a low six figure monetary reserve and makes a mid-four figure monthly net profit from member dues. There have been several large construction projects in the last few years, and everything is very well maintained. There's also a three-plus year waiting list to get in. However, it is now sitting on property probably worth a couple of million dollars. Including property and construction costs, plus the recruiting of a good pro staff, probably the returns don't make this a good investment, at least in this area.

kingdaddy41788
10-08-2007, 03:08 PM
They have to make a profit, otherwise they wouldn't stay open.

Obviously there's one or two exceptions, but very very very few.

movdqa
10-08-2007, 03:10 PM
The private club I belong to has a low six figure monetary reserve and makes a mid-four figure monthly net profit from member dues. There have been several large construction projects in the last few years, and everything is very well maintained. There's also a three-plus year waiting list to get in. However, it is now sitting on property probably worth a couple of million dollars. Including property and construction costs, plus the recruiting of a good pro staff, probably the returns don't make this a good investment, at least in this area.

Income sounds awful but it sounds like the gains on the property have goosed ROI. It also sounds like an increase in property taxes, labor costs, heating (if it's in a cold climate) and general inflation could take a bit out of those already small profits. If there's a big waiting line, perhaps they should consider raising prices.

Midlife crisis
10-08-2007, 03:36 PM
Income sounds awful but it sounds like the gains on the property have goosed ROI. It also sounds like an increase in property taxes, labor costs, heating (if it's in a cold climate) and general inflation could take a bit out of those already small profits. If there's a big waiting line, perhaps they should consider raising prices.

The net profit is after all of those expenses (property taxes, heating, electricity, salaries, etc.) have been paid. The owners are apparently not into make a profit, because they're holding steady on the initiation fee ($3500) and monthly dues when the demand obviously can command higher.

Tennis has become a pretty expensive sport, and so a club like this can probably only thrive in a fairly wealthy area. The problem is then high land costs, and costs in general, and especially so in our area where the 9800 square foot lot my house sits on is assessed at more than a quarter-million bucks.

movdqa
10-08-2007, 05:07 PM
The net profit is after all of those expenses (property taxes, heating, electricity, salaries, etc.) have been paid. The owners are apparently not into make a profit, because they're holding steady on the initiation fee ($3500) and monthly dues when the demand obviously can command higher.

Tennis has become a pretty expensive sport, and so a club like this can probably only thrive in a fairly wealthy area. The problem is then high land costs, and costs in general, and especially so in our area where the 9800 square foot lot my house sits on is assessed at more than a quarter-million bucks.

Hopefully we get a property bubble burst. It's already happening in some parts of the country. A lot of states are underfunded in pension liabilities. And in road maintenance. And in other areas and the property tax can be a way to help plug some of those holes.

We had a club open up over 20 years ago and they went bankrupt. The bank operated the club for a while until the YMCA bought the property, probably at a very good price. The YMCA is a non-profit and don't have to pay property taxes to our town or the state so they have an inherent pricing advantage. They've offered the tennis courts to members with no court fees for many, many years and now they're starting to charge $12/hour or $10/hour for contract time. It will be interesting to see how it goes. We've been spoiled for quite some time and no tennis clubs have opened in our area for two decades because they can't compete with free. There are membership dues but they have a ton of other things to do at the YMCA so it feels like tennis is free.

Midlife crisis
10-08-2007, 07:20 PM
Hopefully we get a property bubble burst. It's already happening in some parts of the country. A lot of states are underfunded in pension liabilities. And in road maintenance. And in other areas and the property tax can be a way to help plug some of those holes.

We had a club open up over 20 years ago and they went bankrupt. The bank operated the club for a while until the YMCA bought the property, probably at a very good price. The YMCA is a non-profit and don't have to pay property taxes to our town or the state so they have an inherent pricing advantage. They've offered the tennis courts to members with no court fees for many, many years and now they're starting to charge $12/hour or $10/hour for contract time. It will be interesting to see how it goes. We've been spoiled for quite some time and no tennis clubs have opened in our area for two decades because they can't compete with free. There are membership dues but they have a ton of other things to do at the YMCA so it feels like tennis is free.

Wow, that sounds like it is a situation that is almost impossible to compete against. The only thing I can imagine is that being a non-profit, the Y might not be able to do the long range planning that will be necessary to pay for court resurfacing or other major maintenance. Otherwise, competing would be on the basis of excellent teaching pros or offering an exclusive social experience, which my club seems to also be very good at. For a club that is primarily a tennis facility, there are quite a few non-playing members who come for the several-times a week social events.

goober
10-10-2007, 10:08 AM
Private clubs are getting a serious challenge from public tennis facilities in my area. The public tennis facilities provide well maintained courts 15-25 in number, leagues, tourneys and no membership fees. I looked into private clubs and could not justify the high costs. The only thing private clubs provide is exclusivity. The tennis courts are not better and in some cases are actually worse. Private clubs do tend to have more/better nontennis facilities with gyms and restaurants on site, but I really don't acre about those things. I usually play tennis and then leave. The players at private clubs are not better and in fact there are often ratings inflation because of the huge egos there.

movdqa
10-10-2007, 10:47 AM
I imagine that there are always areas willing to spend public money on tennis facilities. But there is a housing bubble pop under way which is or will strain public resources in many areas of the country making tennis centers seem frivolous. It's nice to be in a city or town that has the resources for this.

Our town definitely doesn't have these resources and the town courts are pitiful. Given increasing educational costs, increasing demands for highway funds and to support pension payouts, we have public tennis courts not even on the radar screen.

richw76
10-10-2007, 11:06 AM
I imagine that there are always areas willing to spend public money on tennis facilities. But there is a housing bubble pop under way which is or will strain public resources in many areas of the country making tennis centers seem frivolous. It's nice to be in a city or town that has the resources for this.

Our town definitely doesn't have these resources and the town courts are pitiful. Given increasing educational costs, increasing demands for highway funds and to support pension payouts, we have public tennis courts not even on the radar screen.

I'm in Atlanta and there are plenty of great Public and Private tennis facilities. But I see some of what you are talking about.

Atlanta had the Olympics in 96' I think, Anyway They built a BEAUTIFUL tennis complex, The Stone Mountain Tennis Center it was called something else for the olympics, don't remember what.

but it had, a 15k person center court, about 12-16 lighted Hard courts and 2 clay, and locker rooms, club house, proshop etc. It was even open until 10PM.

Right now it's just rotting with chains on the fences. The city mowed the lawn for the first time in almost a year a few weeks ago. It's a real shame.

max
10-10-2007, 11:12 AM
rich in atlanta: how did this Stone Mt. thing happen? That's amazzing shame.

I just think today's economics work against private tennis clubs. Too many other contenders for free time, too many working women, cost of utilities.

Serve em Up
10-10-2007, 11:22 AM
Winter is really the time when clubs can make some money. In the Northern tire states indoor court time is a precious commodity. The vast number of public courts are outside. Short days and cold noghts are a serious obsatcle to tennis.

Most clubs have indoor facilities or put up bubbles. Our club gives members 1st choice of winter contract time, then sells "winter -bubble only time to non members, then sells the local tennis association blocks of time for winter leagues on weekend evenings. The result is our indoor courts are pretty much booked from Oct - April from 8:00AM - 11:00PM.

richw76
10-10-2007, 12:38 PM
rich in atlanta: how did this Stone Mt. thing happen? That's amazzing shame.

I just think today's economics work against private tennis clubs. Too many other contenders for free time, too many working women, cost of utilities.

I'm guessing bad city management. They charged fees, and the courts were 50-75% utilized everytime I went which was several times a week. They had round robins, and clinics several times a week and they were also full.

It's almost right on the border of two counties. At one point I heard they were going to xfer mangement to Gwinnett. Another time I heard soem private investors wanted to buy the property. Sadly in the end they're deciding to let it rust and weed over.

Thing is I know there were several business owners etc. That used the facility regularly, and if they had started a fund raising campaign they should have been able to raise enough to suppliment other monies. From what I saw they didn't even try. The local media didn't even talk about it or write about it, so maybe I'm one of the few that really cares.