WGC and Covid-19 Update - April 1

Last week we told you that we are modelling three scenarios: normal opening, just opening the golf course, and not opening anything. Today we’d like to share some of the assumptions that have gone into each model and the financial calculations so far. Each scenario also has a variety of smaller decisions to make, and there is still much that we don’t know yet, such as to what extent the government subsidies will help us. But this is the high level.

In all three cases, we have reduced salaries and wages as a result of delayed starts, wage subsidies and supplemental unemployment benefits; we’ve reduced costs across the board and placed a hold on all non-essential operating and capital spending. We still have the option of deferring mortgage and lease payments (we are assessing the long-term financial impacts of delaying these at this time). In the first two scenarios, the amount of revenue received dictates which services can be provided, and the level of facility maintenance.

Normal Opening – This is the ideal case, but it seems less and less likely. Key assumptions are:
• Loss of most tournament revenue, reduced member and guest rounds
• Reduced Pro Shop and food & beverage sales
• Reduced cart revenue

Our current estimate is that revenue would be approximately $3.3M, versus the original budget of $4.1M.

Partial Opening – In this case, the golf course would be available for play, but there would be limited to no food & beverage service throughout the year. Key assumptions are:
• No tournament revenue, reduced member and guest rounds
• Limited Back Shop service
• Power carts for single riders only, if the Back Shop is open

Our current estimate is that revenue would be approximately $2.8M.

All Closed – This case assumes that we are unable to open the golf course or Clubhouse for the 2020 season. Our current estimate is that revenue would be approximately $2.2M, which comes strictly from member dues and sales to date. We believe that with this scenario, and taking base expense costs into account, we can operate very close to break even. If we fail to receive all member dues, we will be forced to take more drastic measures with deeper cuts.

The Ontario Government will dictate what we can and cannot do. As of the moment their direction is that businesses such as ours must be closed until at least April 13th. Therefore the Clubhouse and golf course are closed until further notice.

On a positive note, some authorities believe that golf may be the first sporting activity to be reinstated, because it is easier to implement social distancing restrictions. Should this be possible, we’ll be there. The National Golf Course Owners Association has received written notice from the Ontario Government that golf course maintenance can continue for the time being. They have designated the maintenance of golf courses to be an essential service, so there is a realization in government that golf matters.

Our task remains to plan for what may happen and to protect the general welfare of Whitevale Golf Club. We are all co-owners and golfers, and we look forward to our club returning to operation as soon as it is safe to do so.

Mark Crerar, President