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Fading of the green
As economic woes continue to challenge the nation, golf course management professionals search for ways to safely pilot their facilities through the storm.
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As the rampant credit crunch in the U.S. reaches commercial real estate, golf’s unbridled development of recent years has come home to roost — foreclosures of golf course properties are on the rise ...
In the last three years, golf course closures have outnumbered new openings ...
Golf participation, the game’s lifeblood, continues to decline, with rounds continuing their downward spiral of recent years and projections even more dire for 2009 as Americans react to the economic downturn ...
A poll on GCM’s blog (http://gcm.typepad.com) reports that 48 percent of responding superintendents are feeling the economic pinch at their facilities ...
Embattled General Motors terminates its $7 million endorsement deal with the world’s most famous athlete, Tiger Woods; the LPGA loses three events on its 2009 schedule; and Cadillac withdraws as a major sponsor of the Masters ...
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In advance of an upcoming tournament at TPC Scotts- |
Early registration numbers for the GCSAA Education Conference and Golf Industry Show next month in New Orleans lagged previous years; another GCM blog poll reports that many respondents are concerned about show expenses; the largest show by a GCSAA chapter, the Carolinas GCSA Convention, had 18 fewer exhibitors on its trade show floor than a year ago ...
This glum litany is only a small sample of how the nation’s current economic state is affecting golf in America. For decades the popular notion was that the sport was recession-proof. True or not then, the claim is distressingly moot now.
To be sure, the impact of the deep economic dive is having severe consequences for golf’s big-ticket line item — course maintenance — and for thousands of superintendents across the country. As facilities close, jobs are lost. As other courses slash budgets in the struggle to survive, maintenance practices are put to the test to keep venues viable.
It’s truly become a frustrating time for golf course management professionals who were already dealing with soaring costs for such crucial products as fuel, water and fertilizer several months before the crisis on Wall Street and Main Street.
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Perspectives
In a recent e-mail that was forwarded to GCM, a superintendent in Virginia noted that his staff of 16 was cut in half in 2008 and would probably be sliced in half again in the coming year. “I am finding it increasingly difficult to stay focused,” he wrote. “It’s really sad, but it’s the price we have to pay for the overly optimistic building boom over the past 10 years. On the other hand, it’s kind of refreshing to see golf get back to its roots. I am seeing less of the unnecessary opulence. I do, however, feel badly for all those who have lost their jobs.”
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Another superintendent, Jeff Plotts, a 14-year GCSAA member and director of golf course maintenance at TPC Scottsdale in Arizona, tries to view the situation with practical reality, but his frustration surfaces, too.
“We have to remember that this is a business and not only do we need to take care of the product that’s out there, the golf course, but we also have a responsibility to contribute to the bottom line,” he says. “If the revenue is not there, then we need to adjust some of our practices. And that’s difficult for a superintendent who has been taught to do everything the right way and the best way.”
Privacy pays the price
Private golf facilities, once the staple of golf in America, anchored by thousands of community country clubs, have been the most vulnerable as the economic crisis endures and escalates. And there is historical precedent for that vulnerability.
Clubs prospered in the Roaring Twenties, reaching a high of 4,400 facilities, then came the Great Depression and a third of those went under. The current trend is eerily similar. Private clubs rebounded, reaching a peak of 5,000 in 1988. Today, once again, there are about 4,400 clubs with 2 million golfing members.
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Jeff Elmer, CGCS, has been the superintendent at Oakwood CC in Kansas City, Mo., for almost 14 years. |
According to the National Golf Foundation, almost all private golf clubs in the U.S. now have experienced declines in membership and rounds over those ensuing 20 years. Only 34 percent are at full membership capacity, and a drop of 1.6 percent in rounds played at private clubs led all golf course sectors (private, daily fee and municipal) in 2008. About 15 percent, or 500 clubs, have suffered even steeper losses and, in the face of a gloomy 2009 forecast, are on the ropes.
Moreover, the average short-term debt among private clubs has soared to almost $974,000, with an average long-term debt of $3.7 million.
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Elmer says the membership at Oakwood CC understands the need to alter their expectations as the budgets for fertilizer, pesticide and growth regulator applications decrease. |
There are few solutions for a segment that comprises 28 percent of the nation’s 15,900 golf courses. Many facilities offer special membership arrangements, some continue to make capital improvements to attract, and retain, members and some simply turn public.
Never say die
However, there is a lot to be said for the tenacity of the private golf club mindset.
Jeff Elmer, CGCS, has been at Oakwood Country Club, an old line club in Kansas City, Mo., since 1995 and has seen the facility enjoy good times and, lately, lean times. Along the way, the 25-year GCSAA member has learned to appreciate what makes many small private clubs tick though thick and thin.
“Even though times are tough and are going to get tougher, there is a sense here to take the long view,” says Elmer, who has had his maintenance budget cut each of the last three years and his full-time staff pared from eight to six.
“I have to prioritize more efficiently and so far we’re still very successful at meeting expectations,” he says, noting cutbacks in fertilizer, pesticide and growth regulator applications and mowing. “One thing we have to realize as these hard economic times come upon us is that expectations have lowered a little, as well. The members here know it’s hard and they know my budget is lower, so they’re not hammering me for every grass blade that’s out of place.”
Oakwood was founded as a Jewish social club in 1880 and in 1910 moved to the south part of the city and grew to include a golf course. As recent as 10 years ago, the club had more than 400 members, but the numbers have dwindled by 100 since then. Like most clubs of its size, Oakwood tries to bolster its budget through operating assessments — three in the last three years — a move that often can send up red flags among members.
But despair is seldom evident at Oakwood. Its membership rolls of the last century or more include generations of families, and such continuity has in turn forged a strong sense of dedication and loyalty not unlike that found within many small country clubs in America.
“It’s actually somewhat encouraging from where I stand because they keep making permanent improvements to the club. It’s not like they’ve got their eye on the end of the road and letting it go downhill,” Elmer says, pointing out that he’s in the midst of a cart path replacement program and improvements have been made to the clubhouse and swimming pool.
“The improvements to the infrastructure are important to our long-term viability and success during tough times such as this,” he adds. “We maintain the golf course day-to-day as best we can to produce a product that all of our members can be proud of.”
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Rounds at the seven courses in Aurora, Colo.’s golf operation were down, but revenues increased by 2 percent, which Dennis Lyon, CGCS, manager of golf for the city, attributes to a trickle-down effect from higher-fee courses to more affordable ones. |
Shaky state of affairs
Last year at the GCSAA Education Conference in Orlando, Dennis Lyon, CGCS, long an outspoken advocate for municipal golf, participated in a forum on the state of public golf. This year, Lyon, manager of golf for the city of Aurora, Colo., and his course superintendents are uncertain about making the trip to New Orleans next month.
“There’s a good chance we’re not going and it’s not so much because of worrying about 2009, but because our revenues have been basically flat for the last four or five years,” he says. “A lot will depend on how much money we take in this winter.”
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Lyon says he and his staff may skip next month’s Golf Industry Show because of flat revenues for the last several years. Photos courtesy of Dennis Lyon |
That’s a major concession from a former GCSAA president (1989), who manages an $8 million budget (less debt service and not including food and beverage services) at the Denver suburb’s vast seven-course golf operation that hosts nearly 290,000 rounds annually.
The caveats include sizable debt from the city’s two championship layouts, Saddle Rock and Murphy Creek (site of last summer’s U.S. Amateur Public Links), and planned community developments around those venues that haven’t evolved as hoped.
Aurora raised green fees in 2008 and while rounds were down slightly, revenues were up 2 percent, which Lyon attributes to some trickle-down to lower-priced courses from those with higher fees.
“One thing we have going for us is that while we have a couple courses that are fairly expensive for this market, we’ve also got five that are on the low end price-wise and two of them were actually up in rounds played this year,” he says.
Even so, the advantageous diversity wasn’t enough in the long run. Expenses rose 5 percent.
What’s wrong with this picture?
True to form, the 35-year GCSAA member has his own take on golf’s current woes.
“In my view, the golf market kind of flies in the face of conventional wisdom,” says Lyon. “Conventional wisdom says golf is too expensive and takes too long, yet who’s going out of business these days — the least expensive, nine-hole golf courses. How does that make any sense if the problem in golf is that it’s too expensive and takes too long? I think it’s a much more complex issue.
“My spin on this is that it all comes down to value,” Lyon continues, touching on a subject he broached last year in Orlando. “People make an investment of dollars and time when they play a round of golf. At the end of the round they evaluate the value of what they received... whether it was worth the cost. Unfortunately, when the economy gets tight, then the ability to absorb that cost also goes down. I think a lot of people are playing less because of that.”
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Though the budgets at two Horseshoe Bay layouts are up for 2009, Rey Gomez, the Class A superintendent at the property outside of Austin, Texas, has already trimmed expenses in anticipation of a decline during the winter season. Photo courtesy of Horseshoe Bay |
Controlling costs
Lyon says he and his staff saw trouble coming late in 2007 and began cutting back on expenses then. “That’s all we can control,” he says, which in Aurora’s case meant less fertilizer use and more strategic applications; decreased fairway mowing in some areas, from three times a week to twice a week; more conservative and selective irrigation; and cutbacks in equipment replacement.
If those types of stopgap measures don’t stem the tide, he adds, then structure will be assessed, staff may be cut and conditioning quality will be lowered, however imperceptibly.
Glamour at what price?
While municipal operations and most private clubs rely on localized customer bases, destination golf gets an extra crank or two in the economic vice because of its heavy reliance on vacationing families and the traveling golfer. In times such as this, it’s a double-edged sword — people are traveling less, yet courses must continue to be impeccably maintained to attract those who are out and about.
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Gomez has cut costs at Horseshoe Bay courses by switching from granular fertilizer applications to a spraying program. Photo courtesy of Rey Gomez |
“We haven’t really felt the effects of what’s happening yet, although our large corporate outings are down and we’re catering more to smaller groups,” says Rey Gomez, the Class A superintendent at Horseshoe Bay, a resort with 54 golf holes along Lake Lyndon B. Johnson northwest of Austin, Texas. “When people come here, that’s pretty much our one chance to impress them, so we have to maintain the golf courses as good as we can year-round.”
Gomez, an 11-year GCSAA member, heads two of Horseshoe Bay’s layouts, Ram Rock and Apple Rock. His budget is actually up for 2009 to about $1 million per course, but he’s already implemented practices to trim expenses in anticipation that the economic downturn will impact the resort’s winter season.
“We’re evaluating ourselves and determining what we really need to do and what we can get away with not doing,” Gomez says.
While overseeding remains a must, Gomez has taken dead aim on offsetting turf care costs, especially fertilizer use, by switching from granular applications to a spraying program. Labor is an ongoing problem because robust housing construction in the area continues to go against the current grain.
“We are trying to get more done with the people that we have and not affect course conditions,” he says, adding that his staff going into December numbered 27 for the two courses.
Meanwhile, Gomez was also putting a pencil to whether he would attend the GIS in New Orleans next month. “I’m working on my certification — that’s going to play a role in my decision,” he says.
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Shawn Emerson, director of agronomy at the Desert Mountain development in Scottsdale, Ariz. |
Desert bloom is brief
In the Southwest, appearances are also everything and then some in a region that has become one of the country’s leading winter golf meccas. But for the golf course management professional, it’s no place for the faint of heart.
In Arizona’s Phoenix metroplex, for instance, a lot has to be accomplished in a short time with little or no wiggle room. To be blunt, it’s times like now that bring out the best or the worst in facility leadership in a setting where golf is really relevant only a handful of months each year.
“I think we’re going to see a separation of facilities — people who are doing good business practices will separate themselves from those who aren’t,” says Shawn Emerson, director of agronomy for the golf properties at the Desert Mountain development in Scottsdale. “I like to say, protect tomorrow today and sustain yourself through these tough times.”
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Emerson predicts that by 2010, only one-third of the 24 courses along the Pima Road corridor through Scottsdale will overseed 100 percent. Photos courtesy of Shawn Emerson |
Emerson, who oversees the maintenance of six private/resort layouts, can’t emphasize foresight and preparation enough.
“No matter what level of facility you are, you have to be well-equipped going into crisis to get out of crisis. If you are behind on equipment and purchasing or behind on preferred golf course maintenance issues, you’ll never catch up now, you’ll just fall further behind,” he says, adding that Desert Mountain’s strategy is to keep its courses up to date as best it can to handle the next 18 to 24 months.
“I was talking to someone recently and he said 2009 is actually going to be better than 2008 from one standpoint... we’re budgeting it to be terrible in 2009, while in 2008 we reacted to the cost of fuel, fertilizer, labor and all that. We had to make mid-season audibles.”
Budgeting challenges
Emerson, a member of GCSAA for 18 years, says he’s budgeting for lower revenues and higher costs in the coming year. The key, and also the problem, he adds, is how to make up for less revenue.
Green fees in Arizona this past fall were the lowest they’ve been in nearly five years as facilities emphasized volume, and Emerson expects that trend to continue this winter. By the end of November, it appeared that not as many people were coming as often or for as long, thus stressing the importance of adjusting maintenance practices to help make up lost ground. In the Southwest, there is one major way to address that.
“If we can take care of agronomic efficiencies, they will pay off in the long run,” Emerson notes. “A lot of golf courses in Arizona are looking at reducing overseeding acreage and building back the bermudagrass base. We reduced some of our overseeding at some of our courses this year — we took out about 20 percent of our total overseeded acreage.”
Emerson has done some research on the overseeding issue. He says that all 24 golf courses along the Pima Road corridor that runs north/south through Scottsdale were overseeding wall-to-wall in 1997. This past fall 65 percent of those courses overseeded wall-to-wall, while 41 percent modified, or reduced, their overseeding acreage and 4 percent did none at all. By 2010, Emerson projects that only a third of the courses will be overseeding 100 percent.
“To me, that’s where the market is trying to go,” he says. “I think what we’re trying to do is ‘right-size’ — what’s the right thing to do: reduce overseeding, reduce the factors that cost money, do agronomic practices at the most efficient time even at the expense of member inconvenience?”
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In preparation for the FBR Open, Jan. 29-Feb. 1, Plotts had to make a case to Tour officials and locals that cutbacks in overseeding expenses would not result in noticeable changes in conditions at TPC Scottsdale. Photo courtesy of Jeff Plotts |
Perception is blind
So what’s a superintendent like the aforementioned Jeff Plotts doing in an article about golf course management coping with a national economic calamity? The TPC Scottsdale, site of the PGA Tour’s immensely popular FBR Open scheduled later this month, has unlimited funds and resources in order to look and play the way TV viewers and touring pros are accustomed to, right?
Hardly. The Tour and its Tournament Players Club network can be as frugal as any other course owner. So, yes, Plotts has a budget, about $3 million in 2009 for two courses, and more challenges than many of his peers may care for.
“There’s a perception that tournament venues have all the money they want and shut down for weeks before an event, and that’s just not the case. We have an obligation to club and resort play all year except for one week. We’re cutting costs just like everyone else, yet we have to provide a product that meets what’s expected of a so-called TV course,” he says.
In fact, Plotts, a native of Atlanta who has been a superintendent since the late 1980s, adds a well-worn cautionary note: Be careful what you wish for.
“I know how it is — I’ve been at courses with very small budgets and you’re asked to cut back on things,” he says. “Then, you look at a beautiful course on TV and you think, man, those guys never have to cut back... maybe some day I’ll get there. Heck, I’m there and now I think it was pretty good back at that small facility in a lot of ways — less expectations, less visibility, less stress.”
Whirlwind tour
In the last dozen years, Plotts has learned all about scrutinizing attitudes. At Eagles Landing Country Club in Stockbridge, Ga., he hosted four Chick-fil-A Championships on the LPGA Tour, then was construction and grow-in superintendent at Bear’s Best Atlanta in Suwanee, Ga., for ClubCorp; then hooked up with the PGA Tour and prepped for four FedEx St. Jude Classics at TPC Southwind in Memphis, Tenn. In 2006, he moved on to TPC Scottsdale.
As early as late 2007 a lot of cost-control measures were being put in place at TPC Scottsdale. The budget was basically flat for 2008, yet Plotts, like every superintendent in the country, was bushwhacked by soaring costs for fuel, fertilizer and water. All three wound up more than 25 percent over his budget.
“We had to cut anything we could to try to balance,” he recalls, noting that he called it looking for crumbs. “Those crumbs can lead to big savings opportunities. We turn off lights in non-occupied areas, adjust the thermostat in our offices, change cups less often, use painted wooden stakes out on the courses instead of plastic and implement more efficient waste management.”
Plotts also reduced employee overtime and within the past year trimmed his staff of 66 by 12. He met with key staff members to hash over capital expenditures and what the facility can get by on and keep the product the same as in 2008.
“We have to look at everything we do and understand whether it’s essential or not,” he says. “We saved $165,000 on things we decided we can go without.”
The Scottsdale sprint
Plotts’ budget is again flat this year, and he admits there are a lot of unknowns out there. He echoes Emerson in being always aware of the peculiarity of being in a winter golf mecca.
“Our season is the first half of the year,” he says. “What happens, if you’re behind on that first portion, it’s very difficult to make up ground. You’ve got to come out of the chute hard and fast.”
Any cutbacks at TPC Scottsdale must be invisible during the FBR Open (Jan. 29-Feb. 1). Plotts overseeds tees, greens and fairways on the Champions course, but not the rough. That’s not an option on the Stadium Course because the tournament needs rough. However, while the layout is considered overseeded wall-to-wall, this year 10 acres of non-playing areas, mostly spectator areas, were not overseeded.
He had to convince Tour officials and the Thunderbirds, the civic organization that administers the tournament and raises several million dollars annually for charity, that the overseeding cutback would be virtually unnoticed. He won out mostly by explaining that the dormant bermuda would survive bleachers and galleries, while the overseed would again have to be resodded. The move will save the Thunderbirds thousands, since it would have been responsible for the sod replacement.
Postmortem
Once the Tour event is over, Plotts will implement further maintenance cuts, such as using more iron and manganese instead of nitrogen fertilizer to achieve the lush green look winter golfers covet; reducing mowing frequency from seven days a week to four; reducing other repetitions like landscaping and desert raking; and cutting staff hours.
It might also surprise Plotts’ fellow superintendents that the TPC, which usually foots the bill for its superintendents to attend the GCSAA conference and show, will not do so this year. Likewise, the TPC’s annual meeting, usually held at GIS, was done by telephone conference call instead.
As Plotts says, “The old saying is true ... the grass is not always greener on the other side of the fence.”