COVID-19 Business Losses for California Golf Courses & Country Clubs

Golf courses and country clubs aren’t just places to relax and have fun, they’re an important part of California’s economy. It’s estimated that the California golf industry generates about $13.1 billion every year and creates over 120,000 jobs. But as the coronavirus pandemic grew, country clubs and golf courses were forced to either completely shut down or operate on a limited basis. 

According to the National Golf Foundation (NGF), the coronavirus pandemic resulted in a loss of approximately $1 billion in golf course revenue, and that doesn’t even include all sources of revenue golf courses rely on. Here in California, data from the NGF shows a 95% decline in business at golf courses in San Francisco and a 75% decline in business in Palm Springs between March 16 and May 10 compared to the same timeframe in 2019. 

Coronavirus Business Losses for Golf Courses & Country Clubs

Similar to businesses like gyms and fitness centers, golf courses and country clubs rely on membership dues for a substantial part of their income. But as coronavirus-related shutdowns began and people were no longer able to use those memberships as they normally would, many members started demanding answers about what would happen to the dues they’ve paid. Across the country, businesses that offer memberships responded in many different ways, such as by extending memberships for the amount of time closures lasted. However, others issued partial refunds, stopped collecting payments made on a monthly basis, giving them less money to work with while they were shut down because of the pandemic. 

Not only was there the loss of membership dues to account for during this time, there was also lost revenue through things like food and beverage sales and sales at on-site pro shops. Country clubs and golf courses are also among the many types of businesses that depend on special events as an important source of revenue. For example, these types of clubs are popular venues for weddings and receptions, generating income through venue rental fees. But due to size restrictions on gatherings, countless weddings have been either cancelled or postponed. According to Golf Inc. Magazine, 50.5% of clubs with reduced operations had cancelled some or all of their outside events as of March 24, 2020. 

In addition to weddings, golf courses and country clubs often organize other events like golf tournaments and tennis tournaments which can bring in registration fees. Clubs commonly also have their own sports leagues that require participation fees. Members who want to improve their skills at sports like golf and tennis give country clubs and golf courses the option of earning extra money through private lessons, but it’s hard to get the one-on-one attention you need through a virtual lesson at home. 

For many of the people who visit the Los Angeles area every year, being able to spend some time at one of the great golf courses in the area can be a highlight of their trip. But with so many people being forced to cancel their travel plans for the foreseeable future, that loss of tourism can mean fewer visitors at golf courses.

Preparing for the Unexpected

Business owners may find themselves facing a temporary loss of business for many different reasons that are completely beyond their control, particularly when a business relies on people being able to spend time outdoors. For example, a storm or natural disaster could damage the tennis courts or other buildings at a country club and make them unsafe for visitors. 

To prepare for these kinds of unexpected closures, it’s very common for business owners to buy insurance policies that include business interruption and civil authority coverage. These types of insurance coverage are specifically intended to cover monetary losses related to temporary business closures, such as lost revenue, employee payroll, loan payments, and rent/mortgage payments. Civil authority coverage is similar to business interruption insurance, but applies to situations when a business is forced to temporarily close because of a government order. 

Help With Business Interruption Insurance Claims

Unfortunately, as countless businesses throughout the country were forced to temporarily close their doors because of the coronavirus pandemic, insurance companies have taken the approach of broadly denying claims for business interruption and civil authority benefits. Very often, these claims are denied without being properly reviewed first. In some cases, insurers have tried discouraging policyholders from even trying to make a claim for benefits.

If you’ve made a claim and been denied or are getting ready to make a claim, working with a lawyer can help give you the best chance of your claim being approved. The Wallace Firm is now working with California business owners to help them with their business interruption claims. These cases are being handled on a contingency basis, so there’s no need to worry about paying any upfront fees. Contact us and find out how we can help you get the insurance benefits you need.