Drive Shack Profile
Drive Shack Inc., together with its subsidiaries, owns and operates golf-related leisure and social entertainment venues and courses with a focus on bringing people together through competitive socializing, by combining sports and entertainment with food and beverage offerings.
Segments
The company operates through Entertainment Golf and Traditional Golf segments.
Entertainment Golf | Drive Shack
This segment offers leisure and social entertainment through its golf-related leisure and large-format entertainment venues with gaming and premier golf technology, a chef-inspired menu, craft cocktails, and engaging social events throughout the year. Each venue features climate-controlled, suite style bays with lounge seating; augmented-reality golf games and virtual course play; a restaurant and multiple bars; an outdoor patio with lawn games; and arcade games.
As of December 31, 2020, the company owned or leased four Drive Shack venues located in Orlando, Florida; West Palm Beach, Florida; Raleigh, North Carolina; and Richmond, Virginia. Additionally, the company is committed to leases in New Orleans, Louisiana and in Manhattan (Randall’s Island), New York for its entertainment golf venues. Drive Shack venues are freestanding 60,000 square feet open-air venues built on approximately 12 acres.
Traditional Golf | American Golf
This segment includes American Golf, a major operator of golf properties in the United States. As an owner, lessee, and manager of golf courses and country clubs, American Golf is a major operator in the traditional golf industry. As of December 31, 2020, the company owned, leased, or managed 60 properties across 9 states; and had more than 30,000 members. American Golf was focused on delivering experiences for its guests who played over 2.2 million rounds at its properties during 2020.
The company’s traditional golf operations are organized into three principal categories based on the nature of the revenue streams generated by various properties, such as public properties (leased and owned), private properties (leased and owned), and managed properties (public and private).
Public Properties: The company’s 30 leased public properties generate revenues principally through daily green fees, golf cart rentals and food, beverage and merchandise sales. Amenities at these properties generally include practice facilities, pro shops and food and beverage facilities. At certain locations, its public properties have larger clubhouses with extensive banquet facilities. In addition, The Players Club is a fee-based monthly membership program offered at most of its public properties, with membership benefits ranging from daily range access and off-peak course access to the ability to participate in golf clinics.
Private Properties: The company’s five leased or owned private properties, which are open primarily to members and their guests, generate revenues principally through initiation fees, membership dues, food, beverage and merchandise sales, and guest fees. Amenities at these properties typically include practice facilities, full-service clubhouses with a pro shop, locker room facilities, and multiple food and beverage outlets, including grills, restaurants and banquet facilities.
Managed Properties: The company’s 25 managed properties are operated by American Golf pursuant to management agreements with the owners of each property.
During 2020, the company sold one public owned golf property. As of December 31, 2020, the company had sold 25 of its 26 owned golf properties.
Strategy
The key elements of the company’s strategy are to expand its business by diversifying its experiential offerings with a modern spin on indoor mini golf through auto-scoring technology that presents digital scores to guests in real-time; address consumers’ changing preferences and provide a new type of leisure with multiple experiences under one roof, including social entertainment, sports, food and beverage, and inclusivity; and continue to execute site selection and venue development processes, as well as create meaningful and memorable experiences by combining world class golf technology, great drinks, delicious food and welcoming environments.
Intellectual Property
The company has registered the trademark Drive Shack and American Golf and their primary logos and the trademarks relating to Puttery and has registered or applied to register certain additional trademarks with the United States Patent and Trademark Office and in various foreign countries.
Seasonality
The company’s Traditional Golf business is subject to seasonal fluctuations as colder temperatures and shorter days reduce the demand for outdoor activities. As a result, the Traditional Golf business generates a disproportionate share of its annual revenue in the second and third quarters (year ended December 31, 2020) of each year.
Government Regulation
The company is subject to regulation by the United States Occupational Safety and Health Administration and similar health and safety laws in other jurisdictions.
The company’s facilities and operations are subject to the Americans with Disabilities Act of 1990, as amended by the ADA Amendments Act of 2008.
History
The company, a Maryland corporation, was founded in 2002. It was formerly known as Newcastle Investment Corp. and changed its name to Drive Shack Inc. in 2016.
