Golf is big business, and it’s back.
Building Connections: Mike Mosquito, with UHY Advisors
Mike Mosquito with UHY Advisors in Atlanta plays golf three or more times a week. A former SEC golfer at Auburn, he’s built his career using golf as an entrée to the world of business leaders. He understands that the golf course is a place where contacts are made and deals are done.
“I quickly learned that golf was a common thread you could use to build a connection where you didn’t have one,” says Mosquito, “but also it was an outlet where you didn’t have to talk about work. You learn about a person by how they play golf and how they keep the scorecard.”
When companies put a freeze on travel spending during the recession, golf outings with clients and tournament sponsorships often suffered. The downturn meant fewer opportunities for meeting and building relationships with clients that eventually turned into sales.
Happily, the sun is shining a little brighter and the grass seems a little greener on golf courses across Georgia these days. After tough economic times reduced the number of players and even forced some courses to close, the industry is once more on the upswing.
Courses across the state are reporting more players and more rounds played. Golf – that most conservative and traditional of sports – is also beginning to shake up its offerings to attract a wider diversity of players. The emphasis these days is on making golf attractive to women, young people and especially families. Golf has even moved from the fairways into big entertainment venues such as the fast-growing TopGolf chain.
Make no mistake about it, golf is big business. With more than 400 golf facilities and half a dozen championship golf events including the venerable Masters at Augusta National, golf generates approximately $5.1 billion in total economic activity for the state, according to a 2010 report (the most recent available) from the Georgia State Golf Association (GSGA). It spurs tourism, drives new construction and residential development, generates retail sales, and creates demand for goods and services.
Yet it’s also an expensive game to play and one highly sensitive to the ups and down of the economy.
“As we see the economy starting to improve, we’re seeing people return to the golf course,” says Matt Williams, GSGA executive director.
The Great Recession proved to be as much of a correction to overbuilding in the golf industry as it was to the rest of the real estate market.
“There was no question when you’ve built as many golf courses as were built in the United States and then you’re hit with a recession, you’re going to lose golfers,” says Brannen Veal, director of golf for Sea Island Resort. “The number of golf rounds were going to go down, and people weren’t going to have the additional money to be able to play golf.”
These days both numbers are up at Sea Island, as well as at other courses around the state.
Back On Course
There’s no better indicator that golf is back than the news that big corporations are once again investing in courses. Last year, ClubCorp purchased Sequoia Golf and its inventory of 50 private clubs for $265 million. Its inventory includes several courses in the Atlanta area.
“They [ClubCorp] bought Sequoia and instantly gobbled up about 26 facilities – almost a quarter of our GSGA membership,” notes Williams. “They are making massive investments in the properties.”
Courses are getting upgrades to make them more attractive and playable – a good indication that the market for golf dollars has gotten very competitive.
Reynolds Plantation, one of Georgia’s most exclusive enclaves of vacation homes and golf courses, was purchased by MetLife in 2012. Since then its six courses have been renovated or slated for upgrades.
“Having a Forbes 50 company and worldwide powerhouse own the facility, as well as [the presence of] the Ritz-Carlton, has given us the opportunity to do some great things here,” says Mark Lammi, vice president of golf operations at Reynolds Plantation.
Ownership groups – from big resorts like Reynolds Plantation to small private clubs – are determined to bring courses back to the level members and guests expect. During the down years many players accepted that courses were not going to be in tip-top shape, but no more. Now they want a high-level experience.
“I’ve seen that happening around the country more often [now] that new ownership groups or current ownership groups are starting to put a lot of money back into the golf courses,” says Lammi. That’s a big change from the years immediately after 2008 when courses “threw the brakes on any kind of renovation, any kind of upgrades and enhancements.”
Courses are also taking a close look at the golf course model and making changes to attract more players. After years of trying to make them difficult to play, the emphasis is on accommodating older, as well as less experienced, players.
“We’re seeing a lot of money and effort go into enhancing the practice facilities at golf courses,” notes Lammi. “When we did our Landing course renovations, we converted an area that was very underutilized into a really nice chipping and pitching and short game area with two really nice bunkers.”
In past years, renovations rarely included expansions of practice areas. Now owners are acknowledging that many players want to spend less time playing the course and “more time just enjoying the elements of golf,” says Lammi. “We’re seeing more people who would much rather spend an hour on the putting and chipping green or hitting balls.”
Golf clubs such as Sea Island are also placing a new focus on bringing the whole family out to play. Its Golf Performance Center, which boasts four of the nation’s top 100 instructors, has expanded lessons to focus not just on the game, but also fitness and mental concentration. Lessons are designed for women and children as well.
“We really tailored it to make sure that people knew it didn’t matter whether you were a zero handicap or just beginning to play,” says Veal. “Our goal is to make sure people have fun with the game.”
The course is also making it easier for golfers to get in a game without spending all day away from the family. They can play a nine-hole late afternoon round or complete a full 18 holes in just two hours as a single or twosome.
The courses offer a series of family tees designed to let mom, dad and the kids play as a family at a time period “where they’re not going to feel they are getting in the way of anyone else,” explains Veal. “And they can do it at a price point they can feel good about – taking the family out, playing and hopefully getting everyone interested in the game.”
Changes are also happening in the clubhouse.
“They’re breaking down some of the traditional rules and traditions of golf where you might not be able to use your cell phone or [be required to] wear a jacket in for dinner,” explains Williams. “They’re making it more friendly for families to get involved and more comfortable to spend time there.”
Many clubhouses have opted to dispense with the fancy heavy chairs in their dining rooms and create more open spaces that have something of a sports bar feel. The emphasis is on creating an environment in which members and guests can spend more time in casual socializing.
“A lot of surveys are saying that people are wanting to have that kind of dining experience, but they don’t want to come in a jacket and tie,” says Williams. Clubs are trying to get that next generation of families involved, he says, so they feel at home instead of feeling like they are imposing on some of the members already there.
The courses that invest in maintaining, upgrading and even changing to accommodate the new breeds of golfers are the ones that will be successful in this newly competitive world.
“A mistake that some facilities make is even during times that aren’t as good as others, they don’t spend any money on capital improvements or they don’t try to change what they’re doing in terms of membership or offerings and being a facility that is meaningful to the members,” says Chad Parker, general manager/ COO and director of golf at the historic East Lake Country Club in Atlanta, where golfing great Bobby Jones played. “If you don’t make the investment, you’re almost guaranteed to see a decline either in the prestige of your facility or the rounds played or the business you have, because people have the perception that you’re in the twilight of your offerings,” he says.
East Lake closed in 2008 to do a top-to-bottom renovation of its course. Since then, the club has been regaining the business it lost as the recession hit.
It’s not just private clubs that are amping up programs to bring in more players. So are the public courses. At the Georgia State Park courses, the number of rounds played is up as well.
“The packages are what draws them here,” says Lonnie Reece, golf course manager at The Lakes at Laura Walker State Park in Waycross. “They are coming to play golf on a beautiful course and be outdoors with campfires, lakes [and] fishing. People are spending money to travel for one thing and then to stay and camp. We’re giving folks a discount if they stay here and play golf.”
The park is in the midst of constructing new cabins for visitors that will allow those seeking a golf outing to stay close to the course rather than at a hotel in town.
Arrowhead Pointe Golf Course at Richard B. Russell State Park in Elberton has also been able to increase business by offering special “stay and play” packages with its expanded number of cabins – now up to 20.
“We went out and tried to personally contact all the packagers to let them know we can do other things for them,” says golf manager Steve Barfoot. These added services include preparing dinner for guests in the clubhouse and other services that reduce the need to travel the winding country road back into town.
One of the most successful efforts to get young people interested in golf has been the First Tee program. This community-based effort combines golf with a curriculum designed to develop character and self-discipline.
“The First Tee is basically a youth development program that teaches life skills,” explains Nyre Williams, director of First Tee of East Lake. “These include nine core values and nine healthy habits, and those components make up the curriculum-based program that we call First Tee. So it’s really not just about golf. It’s more than golf.”
Participants are drawn primarily from the East Lake neighborhood, starting as young as five years old. On a typical Saturday, the program can have as many as 200 young people of different ages learning the skills of golf and life, he adds.
First Tee is aimed at getting a wide variety of kids from different socioeconomic groups into the game. At Augusta First Tee, participants can play the course – which belongs solely to the organization – with 50-cent buckets of balls and dollar green fees, according to Jill Brown, executive director of Augusta First Tee.
“[The program’s founders] were so passionate about the effort that they raised the money to build a six-hole golf course with a pro shop and learning facility that gives kids the feeling of having their own club,” she explains.
Students progress through the program and earn bag tags similar to Boy Scout badges by successfully passing life and golf skills evaluations.
“Some [kids] come to us brand new, and they never had [golf] shoes or clubs,” says Brown. “We have a lot of generous folks in the community who make donations of all kinds of golf equipment to us. We try to suit up young people with whatever we have so their parents don’t have to go out and make a huge investment. We think of it as an opportunity to make golf affordable to young people who might not otherwise have the opportunity.”
Over the years, First Tee graduates have gone on to play the game at college and in advanced competitive tournaments.
For those who can’t make it out to a course or join a club, TopGolf is offering a new approach to the game. Compared by some to a Dave and Busters for golf, this concept allows players to hit balls equipped with microchips at targets on an indoor driving range. The chip transmits information on accuracy and distance to a personal video screen. When not hitting balls, customers can spend their time drinking, dining and playing video games. There are even pros on hand to teach lessons.
Unlike most golf courses, TopGolf is attractive to women, with about a 70/30 male-to-female ratio, according to Jamie Uhlir, director of operations for TopGolf’s Alpharetta facility.
“We appeal to people of all skill and age levels,” he says. “That gives us a pretty wide range of demographics.”
Indeed, the entertainment venue may even be a crystal ball showing where golf’s successes may lie in the future.
“Our core demographic is ages 25 to 40 male, but any given day you can have kids partying next to a woman’s book club next to a guy practicing his golf game next to a corporate event next to just some friends having a couple of beers playing the game.”