Is Topgolf coming to save your local muni? Ala Wai proposal shows intriguing blueprint

Since Topgolf began picking up steam in the U.S. around the start of our current decade, its facilities have generally opened in suburban strip malls and mixed-use developments. They're often seen next to freeways, like the one I pass constantly on I-10 driving into Houston.

But it's becoming apparent that the future expansion model may come straight to your local golf course.

Topgolf has been debated over the years about whether or not it helps or hurts golf courses. Some suggest that people are choosing Topgolf over rounds at traditional facilities.

Golf Advisor's Mike Bailey recently visited a facility in the Houston metro area and learned about players taking up the game at Topgolf and transitioning to the course. Whether or not you consider it a traditional golf experience, it is an encouraging example of a golf-inspired business concept that is proving wonderfully profitable.

But is the end-game here that Topgolf ultimately supports local golf facilities?

That may be the case if the news Wednesday in Honolulu is any indication. City and county officials voted to conditionally award Topgolf operating rights at the Ala Wai Golf Course. The yearly lease will net the facility $1 million annually plus 1% of gross revenue (which should be a lot). (What muni facility couldn't use that?). From the Honolulu Star Advertiser:

Guy Kaulukukui, director of the city Department of Enterprise Services, said the deal will bolster declining revenue at the city’s six courses, where expenses exceed revenue by several million annually.
While the Ala Wai course has been the city’s busiest by far, Kaulukukui said attendance there has dropped off to 120,000 rounds. At its peak, attendance at the Ala Wai course was about 220,000 rounds, causing the Guinness Book of World Records to dub it the world’s busiest course.
Kaulukukui said the Ala Wai course’s driving range earns between $500,000 and $600,000 in annual gross revenue, a figure he expects will quadruple to about $2 million annually under Topgolf Hawai‘i.

Ala Wai isn't the only case of Topgolf being considered as a kind of savior for a tired golf course. A proposal in El Segundo, Calif. was five years in the making that would bring a Topgolf to the Lakes at El Segundo, a struggling 9-hole executive course with a driving range. Ultimately the City Council narrowly voted down the proposal and have put out another RFP for the future of the site.

Topgolf's triple-deck facilities are certainly more imposing than your smaller, traditional on-course driving range and attract crowds well after daytime business hours. In fact, the facility at Ala Wai is expected to run $50 million (paid for by Topgolf).

That said, folks in the Hawaiian golf industry are excited at the prospect.

That said, one of the things that has always bothered me about metro golf course driving ranges is that far too few are lit or open very late. Others will have a kind of arbitrary "last bucket" time that occurs an hour before sunset. For example, here in Austin if I want to go hit balls after I put my daughter to bed around 7:30 pm, I'm pretty much out of luck unless I drive up to Topgolf, but there is a waitlist on many nights for a hitting bay.

As golf courses in expensive urban cores grapple with how to keep the bills paid and assure residents that golf isn't creating municipal debt, some have sold or leased off land for development. Laying Topgolf on top of the existing driving range acreage seems like an intriguing option and one that is more tied to the game than simply making a rent check from new buildings that could ultimately hurt the golf experience further.

Do you have a municipal or daily-fee facility in your area that would benefit from a Topgolf makeover? It could happen...