[Mike_Young]

At the recent Golf Inc. Conference at the Camelback Inn & Resort in Scottsdale, Ariz., Jeff Silverstein, president of I.R.I. Golf Group, offered some blunt opinions about how the standard operating model for many courses is making it difficult for them to control costs.

Here are some of the things Silverstein had to say about this critical issue:

"I think it's time that the owners of golf courses start taking responsibility for the fact that the associations and the employees that are working at our golf courses have actually taken a stronghold in the industry. The Golf Course Superintendents Association [of America], the USGA as an advisor to our clubs [and] the PGA of America have set standards that the owners have allowed to be set, that have created an expectation from our customer base, that has made, in most cases, the viability and the investment in golf, not very strong.

"In a place like Arizona where your water costs are rising significantly, and your labor costs, your fertilizer costs, are going up, you need to start taking a look at alternative ways to run your facilities. Do you need an $85,000 head professional in your golf shop? Do you need a Class A certified superintendent? Do you need to have fertilizer put down four times a year? You need to take a look at all of those things.

"If we're going to survive as an industry, we're going to have to stop doing things status quo, because too many golf courses have been built that shouldn't have been built and too many golf courses have been purchased for economic reasons that are different than just the operation of that golf course.

"Back in the late '70s and early '80s, when we operated golf courses, our average operating margin at a public golf course was north of 42 percent. Over 50 percent of our portfolio had a 51 percent net operating percentage. We're now in the low 30s. We only have one part of our portfolio that's still in the 40s, in North Carolina. Here in Arizona, we're lucky to be in the high 20s.

"If that continues, the viability of owning these golf courses is not going to be something that we all want to have and the game of golf will be threatened by it. I think we need to all take a look at how we go about operating these golf courses so that we can grow the game of golf and make it a good business."

[John Kavanaugh]

Is he our own Agman who so infrequently posts here?

[Joe Bausch]

I don't think so JK.  That is Jeff Silverman.

[Patrick_Mucci]

Mike Young,

While I understand his points, member owned clubs present a different model because they have a different goal, and it's not margins of profitability.

[Mike_Young]

Mike Young,

While I understand his points, member owned clubs present a different model because they have a different goal, and it's not margins of profitability.

Pat,
Agree....but he has good points where they apply.....
hope all is well.
Mike

[John Kavanaugh]

"I think it's time that the owners of golf courses start taking responsibility for the fact that the associations and the employees that are working at our golf courses have actually taken a stronghold in the industry. The Golf Course Superintendents Association [of America], the USGA as an advisor to our clubs [and] the PGA of America have set standards that the owners have allowed to be set, that have created an expectation from our customer base, that has made, in most cases, the viability and the investment in golf, not very strong."

Seems like I've read on this very site about the dangers of the power of the GCSSA.

[John Moore II]

Mike Young,

While I understand his points, member owned clubs present a different model because they have a different goal, and it's not margins of profitability.

But Pat, member-owned clubs do not represent anywhere near a majority of golf courses. In Pinehurst, I think we had 1 club, maybe 2, that was member owned. The rest were being run as for-profit operations. This guy is speaking from the perspective of his business and the majority of all golf businesses. If you are not profitable, you will not stay in business for long. And frankly, he's right. The GCSAA and the PGA have a stranglehold on the 'professional' employees at clubs. Good golf professionals don't have to be PGA members and good Supers don't have to be GCSAA members. But the facts are, you almost can't get a job in a 'professional' position without membership in one of these organizations (or possibly the Club Managers Association).

[Steve_ Shaffer]

Except for Raven at South Mountain and Arizona National(formerly Raven at Sabino Springs) the courses under this company's management are low profile, at least to me:

www.irigolfgroup.com

[paul cowley]

I've felt the warning signs for a while as I've watched the upper end in the industry grow.....from the bells and whistles that somehow have been recognized as the new standard....to the various groups and individuals that benefit most by its promulgation.

Bloat.

Golf doesn't have to be, nor it should be this complicated.

Those that have always been able to build or maintain with little will survive......hopefully.

[John Kavanaugh]

Exactly.  I am afraid the Walk in the Park may soon become the Run on the Bank.

[Mike_Young]

Mike Young,

While I understand his points, member owned clubs present a different model because they have a different goal, and it's not margins of profitability.

But Pat, member-owned clubs do not represent anywhere near a majority of golf courses. In Pinehurst, I think we had 1 club, maybe 2, that was member owned. The rest were being run as for-profit operations. This guy is speaking from the perspective of his business and the majority of all golf businesses. If you are not profitable, you will not stay in business for long. And frankly, he's right. The GCSAA and the PGA have a stranglehold on the 'professional' employees at clubs. Good golf professionals don't have to be PGA members and good Supers don't have to be GCSAA members. But the facts are, you almost can't get a job in a 'professional' position without membership in one of these organizations (or possibly the Club Managers Association).

I put the CMAA at the top of the list.....they had to justify F&B as a line item just as golf instead of an amenity to the golf......and it went from there.....

[M. Shea Sweeney]

I'm trying to figure out where this thread is going...

Is this going to turn into a bash on the GCSA, PGA, CMAA?

[paul cowley]

All the above organizations have become too self possessed.

I hope I never see the formation of the the GCIDSA.
[the golf course irrigation specialists design association]...but hell....they probably already exist.

[paul cowley]

I'm trying to figure out where this thread is going...

Is this going to turn into a bash on the GCSA, PGA, CMAA?

Maybe.....probably.

[John Kavanaugh]

All the above organizations have become too self possessed.

I hope I never see the formation of the the GCIDSA.
[the golf course irrigation specialists design association]...but hell....they probably already exist.

At one of the Kings Putters I played with an irrigation specialist at Barona.  He was a fat guy with a loopy swing, you might know him.  When he found out that I could no more buy pipe than lay it he dismissed me as unworthy and took off to rub up against the associate of that course whose name is long forgotten.  I hope he died estimating a job he never got.

[Mike_Young]

All the above organizations have become too self possessed.

I hope I never see the formation of the the GCIDSA.
[the golf course irrigation specialists design association]...but hell....they probably already exist.

No different for golf than the auto industry......except they call them unions.....and any bailout there is a bailout of auto unions not auto companies......

[paul cowley]

Maybe I should try to unionize the ASGCA.....that would be a hoot.

[RJ_Daley]

I can't think of one significant profession or commerce group that doesn't have an advocacy professional organization.   Doctors AMA; Lawyers, ABA; Fertilzer Companies, IFA (International Fertilizer Association); Autoworkers, UAW; some auto manufacturers, AIAM, so on and so forth.  

Every one of these associations or professional groups have at some basic root of their function, to cut the best deal they can for their members, and lobby for advantageous laws that favor them!

The certification game is rampant in everything from State licensing of barbers via strict oversight and insistance on their professional organization, to teachers State certification via their professional groups.  Every one of these organizations is there to protect turf and make their piece of the pie more important and lucrative.  The more complex they can make certifications in the name of 'so-called' professional standards, the more cash they can command via the control of who gets in the game.  

And, if we didn't have these organizations controlling their professions to some extent, it would be the wild west and Mike Young could open a hairstylist shop or sell homebrewed medicine to cure the shanks...  

[paul cowley]

I much prefer the wild west.

[RJ_Daley]

maybe it should read, 'one of the fastest opinions on golf' 

[Mike_Young]

RJ,
FYI a stylist does not require a license in Georgia or in most states...I saw one the other day in Atlanta work on my wife and another lady.....200 per hour...dressed in white jeans, white cowboy hats, white cowboy boots and a really nice sway in his walk.....he flitzed around in his studio and told all these ladies what colors looked best on them...referred to hair stylist and could perform small feats sch as plucking eyebrows....but he was legal.....and this guy stays booked.....  OH and he used to be in the paving business in Arizona I tink....

[Ken Fry]

Mike,

I was once a PGA Member but no longer so my comments aren't to defend or grind an axe.

Let me throw a different perspective on this.  Someone brought up the auto industry and the parallel between the unions and the professional organizations.  To me, this gentleman sounds like the upper management of the auto manufacturers that also should shoulder responsibility for their company's problems.

On one hand, he discusses the impressive operating margins their properties achieved in the past, which in turn made him more money.  Contrast the current market where he blames higher salaries, tighter competition and higher dollar maintenance practices all providing a higher quality product that now customers demand.  Then he comments how he's worried about growing the game of golf?

Is he stating he wishes to grow the game to make more money to better fit his business model or grow the game for the betterment of golf's future?

Ken

[SB]

I don't blame these organizations for the problems, they merely responded to the customers who, after watching TV and reading books, demanded more services, bigger clubhouses, and better course conditions.  Certainly these groups did not stand up to the trends, but why would they?  If you're a superintendent, why would you stop a trend toward larger budgets?  If you're a GM, who wouldn't want a nice big clubhouse with flowers and spas?  It became a competition to see who could do everything the best, and cost was irrelevant.  As Paul stated, that became the new standard and now everyone has to pay.

[RJ_Daley]

Mike, you raise another question; what is the licensing standard on Dentists in Georgia? (like I with two missing teeth should talk...hee haw  )

[RJ_Daley]

Ken Fry, excellent points, IMHO.

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