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Jason Topp

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When I was a kid in the 70's in the USA there were two primary types of golf courses. 

Municipal courses were essentially parks that cost very little to play, were maintained in a low cost manner, were overcrowded and swarming with kids in off peak hours. They were my entry into the game.

The other option were country clubs which, at least according to one book I read were formed as collective efforts by those that could not afford country estates.  They provided the quality and type of golf at a cost collectively determined by the membership.  Generally the result was high quality golf at a higher cost with benefits of a collective social group.  Caddie programs provided another entry vehicle into the game although the proliferation of carts killed that vehicle.

Even in the early 90's, as a public golfer, my group of four would all get on the phone at 7 am and make repeated phone calls to get a weekend morning tee time.  On average it took a half hour to get a time.

That all changed with the proliferation of higher end public courses in the 80's and 90's.  I considered those courses a godsend at the time because they offered higher quality golf for a reasonable price.  They also allowed me to get a weekend tee time at my municipal course without spending a half hour dialing the phone each Tuesday and Wednesday. 

Nonetheless, such courses have negatively impacted both ends of the spectrum.  Private clubs are losing members and struggling.  I can pay $100 a round and save substantial money playing high end public courses but without the substantial benefits in terms of pace of play, camaraderie and the ability to just show up and know you are going to find an enjoyable game.  Municipal courses have lost revenue and face a tougher financial squeeze.  Options are to reduce expenses further, renovate and upgrade with resulting increases in cost to the player or to consider themselves money losing operations that provide benefits to the population. 

The higher end public courses are also struggling as the number of people playing the game have not come close to the NGF projections of the 90's, real estate is no longer propping up golf operations and the economy has struggled.

As a result, all courses have been forced to become more like businesses.  Clubs need to make tough financial decisions in order to survive.  High end public courses need to find a price point at which they can attract customers and provide a quality experience.  Municipal courses need to raise revenue and cut expenses. 

Has the development of golf as a business been beneficial on the whole or not?  I could argue either side.

Mike Sweeney

Re: Is it a good thing that golf courses have become businesses?
« Reply #1 on: August 22, 2012, 08:43:32 AM »
  I could argue either side.

As a consumer, there are lots of options, price points and club models now that were not there for me as a kid. My Dad did not play, so Cobbs Creek and Walnut Lane were my home courses. I was lucky to caddy at and have friends and high school teammates at fancy clubs in Philly. Now there are lots of choices in the public and private market in Philly.

At the Jersey Shore there were no municipal golf courses as a kid. Avalon GC and The Jersey Devil (now Stone Harbor) was it for public golf. Now it is an overbuilt market both public and private.

Fairfield County, Connecticut has not changed much since Tom Doak left, as building restrictions and land cost have limited growth. Pound Ridge (on the CT/NY border) is the lone exception. Clubs seem to be okay (not great) as competition from growth was limited. Move over to New Haven County further up the road from NYC, and a number of courses are struggling or have closed or converted.

Sure the old days of "real clubs" in the Pat Mucci style are pretty much gone, but I prefer options. Again, I am a consumer of golf and not IN the business of golf.

Dan Herrmann

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Re: Is it a good thing that golf courses have become businesses?
« Reply #2 on: August 22, 2012, 09:37:54 AM »
Jason - great question.

Around here (Philly), a city (Coatesville) wanted to build a new municipal golf course.  I couldn't believe the fact that most opponents were daily-fee courses and some local private clubs.

I grew up playing the 2 Town of Tonwanda (NY) municipal courses and loved it.  When I was in college, the thought of paying $100 to play golf would have been absurd, seeing how I was paying < $100 per year to play the munis.  Of course, I had no money either.

Hate to say it, but I agree with Jason's thesis that these CCFADs have been bad for golf.

William_G

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Re: Is it a good thing that golf courses have become businesses?
« Reply #3 on: August 22, 2012, 09:49:00 AM »
The development of golf as a business where the golf course design and architecture was solely there to sell real estate in a speculative manner is the worst aspect of the problem.

As there are too many courses now for the number of golfers, the business of golf and its marketplace will sort it out.

Anyone thinking of building any golf course now in the US really has to have 4 aces to make a go of it.
It's all about the golf!

Sean_A

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Re: Is it a good thing that golf courses have become businesses?
« Reply #4 on: August 22, 2012, 10:07:26 AM »
From a consumer PoV, it has to be a boon.  Cheap golf has stayed cheap - ridiculously cheap - at least in Michigan.  Okay, most are not the best courses, but some are good enough for me and I think just as good as many CCFADs at 1/4 of 1/5 the price.  The biggest problem I see with the boom is that most courses were uninspired.  Even with the restrictions in place I am convinced much more interesting architecture could and should have been produced.  Still, they provide alternatives and choice can't ever be a bad thing.

Ciao
New plays planned for 2024: Nothing

RJ_Daley

  • Karma: +0/-0
Re: Is it a good thing that golf courses have become businesses?
« Reply #5 on: August 22, 2012, 10:34:27 AM »
I think the R.E. boom was the worst thing for golf, and still is.  Yes, the R.E. market is now depressed, and for most of the country is not coming back to well.  Speculators in the home and lot sales thought they'd make a killing, and the golf course was secondary.  The CCFAD is a version of the same speculative frenzy, where grandiose ideas of austintatiious clubhouses and amenities along with too much glitz sizzle and hype by the golf magazines selling the club life without the club membership, was too much for the real golfers, the 2-3X a week players to support.  Those 2-3 or more a week players need modest fee clubs without all the hoopla amenities to pursue their recreational passion of golf.  Any business model that factors in too many amenities, that wasn't a club built many years ago and has had no debt in the last couple of decades, is fine.  The ones that fell for the lunacy of chasing amenities and nouveau riche and corporate members in the modern era, overdid it and now are busted or riding the edge. 

So, the key to getting golf back on track as a more widely played and growing activity is to make golf more affordable so more people can play.  To me that means letting the overbuilt and over sold courses go bust, and let the shrewd golf minded business people pick the bones and downsize the overhead amenities.  In a way, and only a guess according to my uninformed actual knowledge, it seems to me that Dismal River may be one example of that process. 

I was lucky to grow up in a town and area that valued the ideal of a municipality or even the County or State providing publicly owned golf as one of the ideals and goals of a government that functions for 'all' of the people.  So, Madison, Milwaukee and Wisconsin in general have a relatively strong ideal to have done that in our history.  That provided a platform for the game to flourish, and when people got a little ahead and still loved the game because they always had reasonable affordable access, they could look to join some equally well structured private clubs, with modest and golf centered + not ostintacious social activities, generally speaking. 

If the overconceived broken overbuilt models can be right sized, downsized, and recycled based on redefining the wasted assets sunk into them, we could have an uptick in golf participation, in my opinion.  But, it you leave it to the grandiose, speculators and those seeking exclusive enclaves, you will end up with golf as dressage... for the 1%ers, so to speak. 

Golf is a recreation, and when it is in the private sector, must follow rational expansion and investment, not greedy speculation with overbuilt superfluous amenities.  But, golf is best served and would grow  better if more municipal, county and state governments would see it as as important as the park system in general, and an ideal to provide good healthy and social recreation to "the people".
No actual golf rounds were ruined or delayed, nor golf rules broken, in the taking of any photographs that may be displayed by the above forum user.

David_Tepper

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Re: Is it a good thing that golf courses have become businesses?
« Reply #6 on: August 22, 2012, 10:39:13 AM »
Jason T. -

I am not sure I agree with your basic premise here. While the up-market, "country club for a day" experience may have come to the fore in the 1980's-90's, privately owned, daily-fee golf courses have been operating for many decades in the U.S. How long has the Jemsek family owned & operated Cog Hill?

Resorts such as Pinehurst, the Broadmoor, the Wigwam, Sea Island, the Greenbrier, etc. have been providing daily-fee golf courses for the guests for 50-100 years.

As a beginning golfer in Monmouth County, NJ in the 1960's, I cannot recall there being any municipal golf courses anywhere in the county. The golf I played back then was on privately owned, daily fee courses.    

DT

Jason Topp

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Re: Is it a good thing that golf courses have become businesses?
« Reply #7 on: August 22, 2012, 10:43:30 AM »
Jason T. -

I am not sure I agree with your basic premise here. While the up-market, "country club for a day" experience may have come to the fore in the 1980's-90's, privately owned, daily-fee golf courses have been operating for many decades in the U.S. How long has the Jemsek family owned & operated Cog Hill?



David - I agree my premise is a generalization and would vary by locality but I think it is an accurate one for the most part.  I do not have them at hand but I am sure golf facility statistics would back me up.   

By municipal I mean to include private public courses that operated essentially like municipal courses - low cost no frills golf.

Jason Topp

  • Karma: +0/-0
Re: Is it a good thing that golf courses have become businesses?
« Reply #8 on: August 22, 2012, 10:48:15 AM »
I am actually not sure which way I go on this topic.  CCFAD type courses have really improved public golf options.  However, having the golfer as a customer rather than a member of a group or a participant at a park undermines the culture of the game and the traditional means for entering it.  It contributes significantly to the increased conditioning expectations that people complain about here. 

Patrick_Mucci

Re: Is it a good thing that golf courses have become businesses?
« Reply #9 on: August 22, 2012, 10:49:46 AM »
The development of golf as a business where the golf course design and architecture was solely there to sell real estate in a speculative manner is the worst aspect of the problem.

William,

Would you cite five (5) courses built for that purpose ?

Real Estate or residential community courses have seemed to have done quite well in Florida, California and Arizona, good winter and retirement destinations.


As there are too many courses now for the number of golfers, the business of golf and its marketplace will sort it out.

Anyone thinking of building any golf course now in the US really has to have 4 aces to make a go of it.

Ivan Morris

Re: Is it a good thing that golf courses have become businesses?
« Reply #10 on: August 22, 2012, 12:54:00 PM »
Probably not!

Bruce Katona

  • Karma: +0/-0
Re: Is it a good thing that golf courses have become businesses?
« Reply #11 on: August 22, 2012, 01:07:19 PM »
If you run a golf course in the same manner you you would your own business, you have a chance of being profitable and successful. 

If you run the golf course like a hobby or inexpensive entrance in the world of sports ownership, please call me.  Your golf asset is one I may want to acquire.

Dan Kelly

  • Karma: +0/-0
Re: Is it a good thing that golf courses have become businesses?
« Reply #12 on: August 22, 2012, 02:05:12 PM »
I could argue either side.

Isn't that why you went to law school?

Reminds me of something I've read about the young LBJ, in Texas, applying for a teaching post.

The school board asked him if the world was round or flat.

He reportedly replied: "I could teach it either way."

And that's why he went into politics.

Now I'll go read the thread and maybe have something intelligent to say. Big maybe!

Dan

"There's no money in doing less." -- Joe Hancock, 11/25/2010
"Rankings are silly and subjective..." -- Tom Doak, 3/12/2016

Nigel Islam

  • Karma: +0/-0
Re: Is it a good thing that golf courses have become businesses?
« Reply #13 on: August 22, 2012, 02:23:44 PM »
I have a question with real estate developments built around golf courses. What exactly is the appeal to buy a house directly on the course? Personally as much as I love golf I have never understood it. The house values are often inflated (at least initially), and you still have to join the club or pay the daily fee. You can often live just as close by not being in the neighborhood at least in Southern Indiana. The majority of those developments around my part of the country have not done well. I know a lot of people who live right next to Victoria National and the majority of them don't even know anything about golf. They just want to buy a $650,000 house.

Adrian_Stiff

  • Karma: +0/-0
Re: Is it a good thing that golf courses have become businesses?
« Reply #14 on: August 22, 2012, 03:05:37 PM »
I have a question with real estate developments built around golf courses. What exactly is the appeal to buy a house directly on the course? Personally as much as I love golf I have never understood it. The house values are often inflated (at least initially), and you still have to join the club or pay the daily fee. You can often live just as close by not being in the neighborhood at least in Southern Indiana. The majority of those developments around my part of the country have not done well. I know a lot of people who live right next to Victoria National and the majority of them don't even know anything about golf. They just want to buy a $650,000 house.
View, and often a water view helps increase the plot vaue.
A combination of whats good for golf and good for turf.
The Players Club, Cumberwell Park, The Kendleshire, Oake Manor, Dainton Park, Forest Hills, Erlestoke, St Cleres.
www.theplayersgolfclub.com

Adrian_Stiff

  • Karma: +0/-0
Re: Is it a good thing that golf courses have become businesses?
« Reply #15 on: August 22, 2012, 03:16:34 PM »
Probably not!
Its a question that could be taken different ways. My take is that private money is the only way for new sports facilities in the Western World (certainly UK) so they have no choice but to be business's. There are good ones and there are bad ones but they rarely equal the best golf course is the best buisness and more often the best golf buisness's are actually nearer to the WORST golf courses. The secret is more to make a reasonable course that is cheap to maintain/operate. Very few people I have met/come across have the ability to run a golf course for profit and a lot would BUST THE PLACE in record time that reside here unless they are very quick learners. Most have crackpot ideas like 'bringing the flagsticks in each night' to stop them getting stolen. Its a very difficult business to make money.
A combination of whats good for golf and good for turf.
The Players Club, Cumberwell Park, The Kendleshire, Oake Manor, Dainton Park, Forest Hills, Erlestoke, St Cleres.
www.theplayersgolfclub.com

SL_Solow

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Re: Is it a good thing that golf courses have become businesses?
« Reply #16 on: August 22, 2012, 03:53:29 PM »
On the surface, the question is an easy one.  Except for the rare exception, they always were businesses.  The difference is that the old clubs were "not for profit" so that the membership decided the level of service it required and paid for it.  But the question raised regarding CFAD's and real estate development courses is a bit more complex.  I suggest that the discussion thus far has been somewhat oversimplified.  The problem was not the concepts, both the high end CFADs and real estate development courses met a need when they  began.  I note that Colt was planning housing around courses around the turn of the last century.  But the problem occurred when developers believed there existed a nearly unlimited appetite for these "products".  I suggest that we may be seeing the same problem for "destination" private clubs at the present time.  Pat is correct, there are many successful golf communities in the SE and SW.  But there are also a tremendous number of complete failures, many of which are working their way through bankruptcy because the market overestimated the baby boomers' desire and ability to fill them.  The first to go were those with less desireable locations.  Witness the demise of developers like WSI.  Second were those in overbuilt locations.  Similarly CFADs failed when the economy weeded out the less committed player and/or when there was too much competition.  Even private clubs are feeling the pinch.  As the economic downturn has extended, the universe of those willing/able to pay for the private club experience has decreased and competition among clubs has increased.  Second tier clubs have been squeezed and many are closing or teetering.  Eventually the market should sort this out but at the cost of numerous courses and clubs.  Until there is another "boom", we are likely to see a decrease in amenities which many of us will view as a good thing.
« Last Edit: August 22, 2012, 05:24:34 PM by SL_Solow »

Andy Stamm

  • Karma: +0/-0
Re: Is it a good thing that golf courses have become businesses?
« Reply #17 on: August 22, 2012, 05:19:24 PM »
I morn the passing, or at least the changing, of "Municipal courses [that] were essentially parks," in my area. When I was a kid (15 years ago), I could play at any municipal course (in my city) for $2 ($3 adjusted for inflation) with a sub $100 annual card. Even at $15 a round, I wouldn't have have played very much as a wee lad. It's a shame that that's still not around.

In my area, courses that were formerly run by the parks department are now contracted out, which has been the death of these programs as well as any citywide card, as no single operator controls more than 2 courses. And, of course they're run a lot more like businesses, which has been the ruin of a couple of them.

And I think there's now a greater sense that the courses are revenue centers instead of parks, which certainly doesn't look good going forward.

Tom Fagerli

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Re: Is it a good thing that golf courses have become businesses?
« Reply #18 on: August 22, 2012, 08:14:09 PM »
Perhaps I am off thread a tad, and if so, I apologize, but the business of private clubs was dealt a near mortal wound when dues became non-deductible and T&E deductions were limited. I can't believe the club industry hasn't been able to get Congress to revert to the old ways.
THere is a course across from my house that was private and the membership sold to an individual because it was losing money. This buyer didn't change a thing and his failure to run it as a business will ultimately result in his losing the lion share of his investment. Golf is a business and if it is going to survive it has to be run like one.

Matt Day

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Re: Is it a good thing that golf courses have become businesses?
« Reply #19 on: August 22, 2012, 08:36:59 PM »
We run the council owned and managed golf course as a business, everything that happens on the course is self funded and the dividend returned is increased annually by the same amount as what the ratepayer bills. This year the dividend is just over $1.6 million.

We've upgraded retic, range, course and car parking and its all paid for from course revenue vi athe course reserve of bank loans

Our council has a modest outdoor 50 metre pool across the road which costs around $250,000 per annum to run. They are going to spend around $6 million to upgrade as its old and needs some love. There is no expectation from Council that this will be paid back from pool revenue.

Pools are a viewed as a necessary community facility, golf is viewed as something nice to have but it should not be a drain on ratepayer funds

Dan Herrmann

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Re: Is it a good thing that golf courses have become businesses?
« Reply #20 on: August 22, 2012, 08:37:09 PM »
Plus, you need to keep in mind the wedding factories that many clubs have turned into.  Without that business, I wonder how many would be closed permanently?

Tiger_Bernhardt

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Re: Is it a good thing that golf courses have become businesses?
« Reply #21 on: August 22, 2012, 09:17:27 PM »
SL is right there with how I see things. The market and options within it have expanded significantly over the last 20 years. I do think there will always be a market for new courses. It just takes good market research to quantify it. in general terms this is a period for renovation and restoration of existing courses in the USA for the most part. Also private clubs will evolve to find their position in larger market.

Mark Johnson

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Re: Is it a good thing that golf courses have become businesses?
« Reply #22 on: August 22, 2012, 10:14:56 PM »
i believe it has been beneficial for a few reasons

1)  course owners are forced to give the customers what they want;   as the result, customers get more of what they want.  (e.g. Rush Creek can have country club quality greens and tight fairways at $100 a round while Hiawatha can provide neither for $18.   Ultimately there will be quality/price correlation and courses will work to align themselves on this line.

2)  It encourages long-term investments in improving qualities.  A well run business is not managing itself quarter to quarter but it willing to invest in long-term returns.

3)  This will be the most controversial of all my reasons, but I don't believe municipalities should be running golf courses at a loss.   I think there are too many other important things and as a big advocate of less government, i dont really think there is a role for government here.


Let me pose one more question as well.

Has our latest recession been a positive or negative for the high-end public courses?   I know it can be argued both ways (people trading down to munis and people trading up from country clubs to high end publics.)   From a small sample, i think it has helped them.   I know it is nearly impossible to get a fri-sun tee times at the 4 high-end courses here and that hasnt always been true.

Patrick_Mucci

Re: Is it a good thing that golf courses have become businesses?
« Reply #23 on: August 23, 2012, 12:21:31 AM »
Jason,

Unfortunately, I don't think they have or are being run as businesses, I think that's what helped get them into financial trouble in the first place.

Belonging to a Private club is a luxury, and in most cases many members want services that can't be cost justified.

As an example, at a club I'm familiar with, they were serving food at six locations.

At their pool/tennis pavilion, at a bathers porch, at the men's, lady's and mixed grille and an on course snack bar.

Despite the dinning room opening early, they opened the on course snack bar early.
The bathers porch was essentially for members who wanted to have lunch with their kids/grandkids without having to go to the pool, and the pool/tennis pavilion was primarily used by those wanting to eat in their bathing suits.

If you were running that club as a business, the first thing you would have done is restricted and streamlined the dinning operations.

The monthly statements indicated that the more meals we served, the more money we lost, so did the club revamp operations ?
Absolutely not.

Typically, the culture of the clubs is such that they can't run themselves like an efficient business.

There tends to b a mentality that says, "I'm paying dues and I want full services for my money"

Andy Stamm

  • Karma: +0/-0
Re: Is it a good thing that golf courses have become businesses?
« Reply #24 on: August 23, 2012, 12:09:22 PM »
3)  This will be the most controversial of all my reasons, but I don't believe municipalities should be running golf courses at a loss.   I think there are too many other important things and as a big advocate of less government, i dont really think there is a role for government here.

What about other sports and activities. The pool example above is an excellent one, but there's also tennis, basketball, shooting, archery, etc. (and in a decent sized municipality, the diversity can be impressive).

Do you think that municipalities should not be running any of these at a loss? Or is golf somehow different? Whereby it's ok to run the pool at a loss, but not the adjacent golf course?

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