2003: Business - Owners chart new course in depressed market

By Scott Kauffman

Palm Springs, Calif.

As one golf operator put it during the National Golf Course Owners Association convention, old tricks just don’t work anymore. With that in mind, he and 619 other owners and operators met in Southern California to find new tricks for succeeding in a depressed golf market.

What emerged from the Feb. 22-26 “Solutions Summit” was an entrepreneurial spirit that encouraged creative initiatives in a tradition-based business environment.

“The whole theme to this year’s show was providing practical answers,” said NGCOA executive director Mike Hughes.

The industry’s main barometer – rounds played – shows no signs of improving. Golf Datatech – in conjunction with NGCOA members – reported last month that rounds played for December 2002 were down 10.7 percent compared with the same period a year ago. It was the 24th negative year-over-year monthly recording in 30 months.

In other words, since August 2000, the golf industry has enjoyed just six positive monthly reports as it relates to year-over-year performance.

As for overall 2002, rounds were down 2.9 percent compared with 2001, marking the third consecutive year the industry ended on a negative note. Previous year-end performances: minus 1 percent in 2001; minus 1.7 percent in 2000; and 0.2 percent in 1999, the year Golf Datatech began tracking rounds played.

Tom Bruff, managing director of the Dallas-based KPMG Golf Industry Practice, attributed such woes to the course development boom that occurred in the mid- to late ’90s and said stressed market conditions will last 3 to 5 years.

Nevertheless, numerous operators said 2002 was positive.

One such owner was Jay Miller, who resurrected 75-year-old Cresta Verde Golf Club in Corona, Calif., after acquiring the modest 6,100-yard public facility in early 2002. Miller is attacking the business of course ownership with ingenuity. Besides redesigning a third of the layout, he is building a triple-decker practice facility and experimenting with music on the range and at a few locations on the golf course.

So far, that unorthodox thinking is paying off. Last year, Miller increased rounds played at Cresta Verde to 44,000 from 38,000 without discounting a round and having at least one hole under construction nearly the entire year.

Henry DeLozier, an NGCOA board member who manages 22 courses for Pulte Homes, said opportunities for success exist even in current market conditions.

“But I say that with a pause,” he said. “It’s half full depending upon whether you understand your business. And whether you have the courage to remain steady with the vision for your golf course.”

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