The state of the golf industry isn’t where anyone in the business would like it to be. Retail sales have been volatile. Millennials aren’t busting down the doors to get tee times. Course maintenance and other costs are rising. And then there’s that big bugbear of recent years: too many golf courses, not enough golfers.
While there is a golfer market out there, a Golf Canada/PGA of Canada report revealed only 25 per cent play, follow and endorse the game. The other 75 per cent are of the “take it or leave it” mindset. Bringing the latter group on board is where the challenge lies.
For the club owner, the supply-demand imbalance and other factors have made it increasingly tough to run a profitable operation. Turning a profit is the raison d’être for being in business, but it can be a double-edged sword, says Greg Seeman, founder and managing partner of Wooden Sticks in Uxbridge, Ont.
“There are two opposite answers to that,” Seeman laments when asked about what makes ownership rewarding. “The most rewarding is being profitable and having a facility that people are thrilled to play and return every year. The least rewarding is not being profitable. Not everyone is cut out for the ups and downs.”
So, as owners/operators look into the big crystal golf ball, what’s the best way to deal with those ups and downs?
Rethinking old ways is a great place to start, says Barry McWha. He’s seen it all in his distinguished 50-plus years in various roles in the business. Now a Vancouver Island-based consultant, his Wedgewood Golf Management provides management expertise for private club, resort and public play facilities. He cites a current project, Sparwood Gold Club in Sparwood, B.C., as an example of how clubs need to think differently.
Declining revenues at Sparwood prompted the club to enter into a five-year club management agreement with Wedgewood. So, was Barry’s initial solution a membership drive?
“I don’t even think about members,” McWha says. “Membership sales are the high-hanging fruit. Members represent only 10 per cent of people playing golf.
“Making the club’s restaurant work year-round was a priority. Only one in five Canadians play golf, but 100 per cent of Canadians eat.”
He sees the restaurant as being sustainable year-round, and he and his team have also worked with the community to bring in paint nights, cross-country skiing, snow shoeing and other events. Says McWha: “I don’t know whether they golf when they come up the driveway.”
McWha’s philosophy that “we can’t get stuck in what used to work” is already paying dividends at Sparwood. Golf increased over 20 per cent the first summer, and future plans include fully developing all golf services.
In Winnipeg, Harry Brotchie is sole owner of Lakeland Golf Management Inc. What started with one course, Harbour View in Winnipeg in 1982, has grown to an interest in 10 courses. Though he sees costs going up and revenues basically flat, he believes in building customer loyalty but not by selling discounted tee times through online booking services.
Winnipeg weather can be tough on revenues, which Brotchie says makes it important to “save your budget for when you are busy.”
“You have to work hard at it and give people what they want, Brotchie says. “We’ll offer 10-, 20-, 30-games passes and reward golfers for playing more.”
Chris Miranda is a co-owner of the Cambridge Golf Club in Cambridge, Ont. Given the strong stable of juniors and thriving men’s and women’s leagues — and a course that’s always in exceptional condition — his focus on being positive and working hard are paying dividends.
“The days of working during the summer and going south in the winter are long gone,” Miranda says. “If you don’t work hard and be creative, do not get involved.”
He even has a positive way to deal with that biggest fly in the ointment — Mother Nature.
“Make the most of good days. You need to manage the tee sheet on sunny days a lot closer. Fill down times and ensure the guest experience is such that they want to return.”
In other words, don’t cut off your nose to spite your face. Cutting expenses (e.g. course maintenance) to make up for lost revenue from “lost days” is risky business. If the golfing experience suffers customers won’t come back.
Nonetheless, expense management is a bigger challenge than ever, Seeman says.
“There are certainly more stress points, notably increases to minimum wage. Courses have been forced to comply with many more rules and regulations around health, labour and the environment.
“Managing expenses as related to revenues is something you have to have a finger on at all times. It’s not about cutting staff and cutting costs, it’s about being as efficient as you can all the time.”
Looking ahead we’re likely to see more courses sold for development. “For the price developers are paying, yes we will,” Miranda says. Seeman believes that any club that can be developed for real estate will go that route over the next 10-20 years.
Leasing will also be more commonplace, especially for those clubs that need what McWha calls the “sophisticated best practices” required in today’s environment. He adds that the days of “build it and they will come” have been replaced by the need for professional management, marketing, systems and training.
“We don’t have to reinvent golf, “McWha says. “We have to recognize that people play the game for many different reasons, and ensure that those reasons can be accommodated.”
