Wednesday, October 5, 2016

Losing Money, Then Closing: Trump Taj Mahal and Golf Courses

Early fall is the season for struggling summer attractions to close down, and this fall, the going-out-of-business list finally includes the Trump Taj Mahal casino in Atlantic City. It closes its doors Monday. In hindsight, the oversized casino would have done better to close in 2007 or 2008. Somehow it managed to defy gravity for eight years, drawing in new funding from a series of hapless investors, all the while losing money every non-summer week. In the end it was losing $1 million per week and the acrimony surrounding the closing just shows that there was no realistic prospect of keeping the casino going.

Losing money year after year is also the story at most of the few dozen golf courses closing at the end of the summer. Golf continues its slow fade, but often the problem is simply too many courses in the same place. A New York ski resort that added on two golf courses in a bid for summer visitors just decided that one was plenty. Resort, municipal, and university golf courses can lose money, but only up to a point. As participation declines, golf courses eventually have to close. That is the story in Jackson, Mississippi, where budget cuts forced the closing of the city golf course. Obviously, the city budget wouldn’t have been a factor if the course had drawn enough customers to cover its operating costs.