The world of golf braces for a tough year as corporate sponsors tighten their belts and golfers cut costs
From the Print Edition:
Fred Thompson, March/April 2009
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"I'm old enough to have gone through the savings and loan issues, the other economic downturns, but I wasn't one who saw this coming," says Bivens. "We were changing the business model, trying to bring parity to the LPGA and monetize its success. I'm grateful this didn't happen two years ago. I sure wish we had had one more year. We were on a great roll. One more year and we would have gotten through our television negotiations.
"As far as LGPA official money events in 2009, we'll have 31. That's versus 34 in 2008. Given what could have been the potential economic impact on our schedule, we view this as a barometer of stability, appeal and value for our players. . . . But it's no secret that the road ahead is going to test our mettle. We face real challenges."
The PGA of America, the organization of club professionals that also jointly puts on the Ryder Cup, monitors what's going on in the private and public golf sectors and isn't alarmed—at the moment.
"In 2008, we enjoyed the definition of the new business goal, which means that flat is the new up in corporate America," says PGA of America CEO Joe Steranka. "We had less than half a percent decrease in rounds played [in 2008] and we had around a half to 1 percent increase in revenue per round. We demonstrated that even in this economy, people are looking for recreation in tough financial times. Golf provides a great escape. Golf held up very well when you look at discretionary spending."
That isn't to say that things were rosy, or at least flat, everywhere. "In drive-in markets like Ocean City, Maryland, Hilton Head and Myrtle Beach, you had declines of 8 to 10 percent," says Steranka. "We think facilities with high price points could be somewhat vulnerable, not so much from their core clientele, but from the standpoint of the casual traveler."
Ben Hunt has been feeling the pinch in Myrtle Beach, South Carolina, where golf is a way of life. Hunt is a PGA professional and owner of the Grand Strand Golf Association that represents 63 clubs in the area. "There's a definite downturn here, between 10 and 15 percent, I'd say," he says. "We had lost several courses over the last few years to real estate development. Developers would come in and offer a golf course owner so much more than what he could make on the course that he would sell. But that boom went bust. We have a 54-hole facility, Bay Tree, that was sold for development. All there is now is a bunch of weeds." The private-club sector also faces some tough times, especially when people with money suddenly don't have so much.
"We are seeing some challenges in club membership, seeing some strategies for maintaining their memberships whether it is a hiatus from pay[ing] full membership dues for a year or allowing someone to go to a social membership," says Steranka. "In Palm Springs, where there was a ramp-up in high-cost private clubs, we see a ramp-up in the amount of people trying to sell memberships. We don't see the private-club model as broken. The private-club challenge seems to be regional. We've also heard from a handful of professionals who have lost their jobs because of what they said were economic conditions."
Private clubs, those bastions of American green, are feeling the blues. The Los Angeles Country Club is putting off a major renovation of its North Course, settling for some bunker and tree work. Several clubs in the New York metropolitan area are losing members and at least two clubs on Long Island have talked about merging operations.
All of which makes for uncertain times for a club manager such as Don Molitor of the Woodmere Club on Long Island, just outside of New York City. "Just like other clubs, we are looking at ways of cutting our expenses while trying to live up to expec-tations," says Molitor. "We've cut the operating hours for the restaurant, the locker room, fitness facilities. At a club like this, it's 20,000-plus dollars a year before you even stick a tee in the ground, so there is a certain level of expectations, things like having a perfectly green course and having a very good restaurant and all sorts of help. We had an organized roundtable discussion of managers, professionals and superintendents back in December. A banker spoke to us, and the words are still echoing in my head. He said we had a hell of a party the last 20 years, and now we are paying for it with a hell of a hangover."
Charles Robson is executive director of the Metropolitan PGA in New York and has his hand on the pulse of the game in this golf-blessed area.
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