Herb Kohler’s Whistling Straits to host major championship

Thursday, October 6, 2011

Herb Kohler’s Whistling Straits is the first golf resort to play host to a major championship in the United States since the industry was slammed three years ago by the economic recession and then the terrorist attacks of Sept. 11.

And it showed it was more than up to the task.

But that doesn’t mean that it and countless other golf destinations haven’t struggled to deal with the challenges of what suddenly became a very tenuous market. Business and leisure customers drastically changed travel and spending habits, eliminating or cutting back on the jaunts they used to take with their clubs. And while there has been some improvement in recent years, resorts such as Kohler nonetheless have had to adjust to a brave new way of doing business. Nearly all have had to alter their pricing and marketing strategies to adapt to their customers’ new travel behavior.

Such business practices and a better economic climate have resulted in an increase in bookings and a cautious outlook for the future.

“Overall, we have seen a slow incline in demand,” says Peter Stilwell, director of marketing for Pinehurst, which is the site of the 2005 U.S. Open. “And while things are not back to where they once were in our peak time, they are getting closer.”

Other indications of a recovery are found at resorts sinking millions of dollars into new courses and amenities. Bandon Dunes, for example, is opening a third course next June, and Ponte Vedra Inn and Club in north Florida is set to begin building a 25,000-square-foot spa after completing a massive upgrade of its golf and hotel facilities.

The ever-popular Myrtle Beach market also witnessed a turnaround this spring, signaling an end to the rounds-played drought that has plagued this golf mecca since 2001. According to Myrtle Beach Golf Holiday, a marketing cooperative of 98 courses, the so-called Grand Strand produced a record 1,468,225 rounds for the March-May period, up 8.7 percent from a year ago. While Myrtle Beach’s recovery was strongly influenced by the addition of direct commercial flights from cities such as Minneapolis, Boston and New York, its boost in business reflects consumer willingness to travel and spend.

Promising as these developments may be, industry observers say they are not to be confused with an unabashed boom in golf.

Pinehurst, for example, is keeping its plans for new courses Nos. 9 and 10 on hold, in large part because demand is not yet ready to support the additions.

Legitimate worries about long-term economic stability and overall security linger in the face of threats from al-Qaeda, the war in Iraq and the burgeoning fiscal deficit. And corporate travel, that all-important lifeblood for resorts, is still lagging.

“We all saw a big dropoff in our corporate business, and it has still not come back,” says Ellis Edland, group vice president of hospitality and real estate for the Kohler Co.

“It appears that sector found other ways to do business a few years ago, and it has continued to go in that direction.”

The result is an altered golf travel market that has forced resort operators to embrace its many changes.

“For one thing, you are seeing a lot less lead time for bookings,” says Jeff Hamilton, president of Orlando-based Golfpac, a golf travel company. “It’s a byproduct of the uncertainty as well as the fact that people in this day and age are so strapped for time.

It makes it a lot harder for resorts to predict their business down the road.”

With consumers not only waiting until the last minute to book their golf vacations, but expecting good deals, operators are increasingly discounting their offerings. In addition, they are courting value seekers with other perks, such as free range balls or complimentary room upgrades. Discounts are being offered for nongolf-related activities as well, such as meals and spa treatments, to “add value” to their guests’ visits.

Destination owners also report another emerging trend: an uptick in their “drive” business – the people who drive, not fly, to their retreats.

“That has expanded from a couple hours away to as far as seven hours,” says Pinehurst’s Stilwell. “I walk around our parking lots now and see license plates from all over.”

Many operators have turned to more regional-based advertising and marketing programs to tap that drive market. They also are relying more heavily on direct mail campaigns with hopes of increasing repeat customers.

“We all had to become sharper businessmen and women in terms of differentiating ourselves with service and product in order to hold onto the business we have and, if possible, grow it,” says Paul Earnest, director of golf for the Four Seasons Las Colinas resort in Dallas. “The realities of the market demand it.”

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