Q&A: Steve Friedlander, VP, Pelican Hill Golf Club
Wednesday, February 6, 2013
During his career, Steve Friedlander has run some of the largest golf resort operations in the country – Ventana Canyon, Doral and Herb Kohler’s courses at Whistling Straits, Blackwolf Run and in Scotland. Since 2008, he has been the VP at Pelican Hill Golf Club, part of The Resort at Pelican Hill in Newport Coast, Calif.
Neither the industry’s chronic problems nor the high cost of doing business in California have dimmed Friedlander’s outlook. He said 2012 was a record year, thanks largely to strong group sales, and he projects continued growth this year. Friedlander recently talked with Golfweek about business at Pelican Hill.
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Golfweek: What is the business outlook at Pelican Hill for 2013?
Friedlander: Fantastic. What we’re really seeing over the last year and a half is more and more people coming to the resort to play golf, which is what we wanted. We wanted people to stay here and play golf here. So the outlook that I have for 2013 is that it will be our best year ever, which 2012 had been.
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GW: In percentage terms, what kind of growth do you anticipate this year?
Friedlander: We’ll get into the double-digit range – between 10 and 15 percent (increase) in rounds, and certainly the revenues have come along with that. That’s a lot because we’re a high-volume property.
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GW: How many rounds did you do last year?
Friedlander: Just under 80,000.
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GW: Do you have a feel for what kind of year it will be for the golf industry?
Friedlander: Unfortunately, I don’t think the industry is going to have another banner year because we can’t rely on the weather. If you think about the weather the country as a whole had and the early starts that most parts of the country had, and if you were to compare from when they normally would start to when they normally would end, I’m not so sure everyone had so good of a year (in 2012). . . . When we finally do get people out on the golf course and they find out what a great escape it is, they just keep coming and keep playing. Two of our biggest obstacles are time and money, but I think the industry as a whole has bottomed out and is rebounding.
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GW: Talk about your sales strategy for groups.
Friedlander: I have two golf sales managers, and all they do is look for golf groups. A group is defined as 13 players or more, and their revenues and rounds targets are in the 20 to 25 percent range to increase each year. They’re commissioned, so they get to eat what they kill. They’ve done a great job of finding those groups – not only gap-fillers, the smaller groups, but the larger groups that are now becoming even larger. In the last 12 months, we’ve had a couple of large, one-course tournaments, fund-raisers, and fairly expensive ones because they’re celebrity-related. In 2013, they’re asking for both golf courses. The popularity of those kinds of events continues to grow, and those (sales) guys are fantastic at finding that business. Some of that business comes from as far north as L.A., and some of it comes from North County, so their market is pretty good-sized.
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GW: What is your strategy on rates?
Friedlander: I’m going to say we hold rate 90 percent of the time. There are gaps where we can do something with rate when we know it would go completely empty. Tuesday morning at 7 o’clock might be a very slow time for business, so that’s when we’ll find a gap and have the golf sales managers find these smaller groups and negotiate a rate with them, and we still achieve our objectives, which are margin and rounds. The other thing that we do is, for instance, this week we had the South Course closed three days for maintenance. After that, we have a recovery rate. So if there are people who can’t afford the usual rate of $280, they can play under our recovery rate for $150. And our recovery isn’t like most people’s recovery. . . . Most people who play our golf courses under recovery come in and say, “Why was it under recovery?”
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GW: In percentage terms, how much more expensive is it to do business in California as opposed to neighboring states?
Friedlander: It’s got to be 15 to 20 percent. Gas by itself is at least 15 percent more expensive. And then there’s the costs of materials and other supplies. Labor is a lot more expensive here – the benefits that you pay, what you’re required to do – (that’s) at least 20 percent. The good news is water is not that much more expensive here.