The indoor golf simulator market is close to $2 billion and is expected to exceed $3 billion by 2030.
Maybe you are able to put one in your house (good for you) but more likely you are going to indoor golf simulator clubs.
They have exploded over the past few years with major players like X-Golf, Five Iron and Back Nine leading the way.
Was this just a boom due to new technology or has this pattern been built for a long time?
Let’s compare the big boys to each other and to local spots and we’ll try to answer the bigger questions about where this business is going.
X-Golf
Let’s start with X-Golfpossibly the OG franchise simulator model. The Australian company launched franchise locations in the US in 2016.
- Locations: 140
- Start up cost: Approximately $1M – $1.9M (200K liquid capital required)
- Franchise fee: 40,000 dollars
- Reported annual income: Some sources put the average gross sale around $580k (some actually lower) – which feels low for a multi-million dollar build, but of course varies by location
- Cost to golfers: About $25-$75 per hour for one bay, depending on location and time, with membership costs ranging from $50-$350 per month
- Vibe: League-run, community-friendly
They have measured theirs “Simulator Sales” at $113k so, yeah, the more the merrier, and adding more sims is where they are able to increase margins.
Perhaps a bit more by the book, X-Golf feels like the playground of the millennium. Their website also reflects that vibe. Tried and true, gets the job done. Not so keen on membership but more on league play and standard short time bookings.
The start-up costs seem high for a business that will only make $500-600k. How much of this will the owner/operator actually see? I can’t imagine more than $100K after expenses, royalty payments, etc. But what do I know?
Five iron golf
Then there is Five iron golf, which is more of a social entertainment venue compared to others.
- Locations: 35
- Start up cost: More like $1.7 million – $4.3 million (wowza)
- Franchise fee: 50,000 dollars
- Average income: One data set puts it closer to $1.8 million a year, others at $2.4 million
- Vibe: Premium construction, stronger feed/beverage, TrackMan technology and vibrant ‘nighttime’ energy
- Cost to golfers: About $30 an hour or $129 a month for a membership
Now this still seems astronomical for a construction. These statistics are mainly from Entrepreneur.comand the range is wild, but that’s what we have.
But for a business that can make $2 million, $3 million, even $4 million? It makes a little more sense and seems like a much more attractive pursuit for an entrepreneur.
It seems like they are really tying in the events, member programs and social club aspect of a place like X-Golf.
Back Nine Golf
Back Nine is the fastest growing major franchise. They are also the youngest.
- Locations: Over 100 in operation, ~100 more seats sold
- Start up cost: ~$360,000 for a four-breast surgery
- Franchise fee: 50,000 dollars
- Average income: i see $194,856 in the year 2024
- Vibe: Great technology, but with minimal staff and a limited food/bev program, it feels more like a hands-on facility
- Cost to golfers: Varies by location and time, but you’re looking at around $25-$55 per hour or monthly memberships around $125-$325
However, there is a place for this model, right? Super low cost once simulators are in, minimal or no staff, 24/7 access (membership required) and remote technical support.
It can be directed very passively. This is their field.
I personally don’t like the model, as it seems like they are doing the bare minimum –but they don’t promise to be this one stop golf/entertainment shop for community building, so who am I to judge?
They promise high-quality technology, 24/7 access, swing-free golf, which is exactly what some people (franchise owners and golfers) want. You can’t knock them!
My issue as an entrepreneur (potential franchisor) would be the average revenue in 2024 being just shy of 200k – while I know this is a new franchise and that won’t be the ceiling, I would be excited by other opportunities before that.
But hey, another ~100 seats sold means they’re convincing more than enough people that it’s worth it.
So hello to them!
Local indoor simulator clubs
It’s not just about franchises – there are plenty of local in-house golf clubs too.
I am a Nashville native and interviewed the owner/operator of CONCEALINGan indoor golf club in the city.
Errol Helling has been in the industry for 15+ years, was an early employee of TrackMan, and has now created a unique space for Nashville gamers.
Its design, while not too dissimilar to X-Golf and Five Iron, emphasizes the club’s community aspect. It starts with indoor golf, but then becomes something more than that. The club runs golf trips, members go to play in town – the club becomes a major part of a member’s golf trip.
He raised it Carnoustie Golf Links in Scotland, where the club was off course. The clubhouse became a place to eat, drink and socialize together as members of a club. From there they went out and played golf.
The Hideout is not suitable for an 18-hole outdoor course, but it is a place where you can practice, play in simulators, compete and ultimately find a place to belong in the city’s golf landscape.
The cost of membership is an initial fee of $2,500 plus $299 per month.
Errol even tries to avoid the term indoor golf club— what he is building goes beyond the interiors, beyond the walls of his club and the confines of the simulator.
Here’s what he had to say about the future and where some closed clubs are going wrong:
“Indoor golf without the commitment (tournaments, league nights, playing outside with your members) will have its way with most people. If you’re not doing more than just (hitting balls), you’re not going to have long-term members. Come summer, they’ll leave.”
It is good indoor golf for golfers?
For the most part, absolutely.
- Financially: Incomparably cheaper than a private country club in a decent sized metro. Often cheaper than full city tours.
- For improvement: Nothing beats high-quality data and efficient iterations.
- For the community: Leagues and regulars make friends and play partners quickly.
- For consistency: No weather cancellations. No five-hour commitment.
You trade sunlight and the real elements for these things, of course.
Even the guys who own an indoor golf club will tell you that indoor golf isn’t that good. But it adds something the outdoor game can’t always offer: accessibility, affordable memberships and a place to practice life-friendly golf.
So yeah, I’d say it’s good for golfers. As good as outdoor golf? Not sure about that, but it’s good for golfers.
Which indoor simulator club is the best? It depends on what you are going to experience.
Is the indoor simulator business here to stay?
Yes, and for reasons beyond just the weather.
Indoor golf solves real problems: daylight, planning, convenience, data, friendly group fun, time.
Technology will continue to improve, and I really can’t stress it enough time enough. Nine holes of golf often leave you wanting more golf, and 18 holes can take six hours of your day, depending on the trip.
It seems that X-Golf, Five Iron, Back Nine and these local clubs have found their success from elevating the member experience. Back Nine Golf does this without the full member experience and is growing faster than any of them … but they are also the youngest.
It may be that their passive ownership model proves fragile in the long run. Only time will tell.
Back Nine Golf may be the exception, but we know the demand for indoor golf is high and can be sustained if these clubs commit to that member experience – leagues, benefits, golf trips, local outdoor golf, etc.
bullish.
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