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The Honolulu Advertiser
Updated at 3:06 a.m., Wednesday, January 28, 2009

Golf: Florida courses struggling to remain green in poor economy

By Josh Robbins
The Orlando Sentinel

ORLANDO, Fla. — It seemed like a good day for Shingle Creek Golf Club.

Exhibitors from the Surf Expo trade show at the nearby Orange County Convention Center arrived around noon on Jan. 14 for an afternoon golf scramble. Attendants at the complimentary valet parking stand addressed guests as "Sir" or "Ma'am." Near the first tee, one worker looked up at the clear-blue sky and grinned as he said, "A beautiful day for golf!"

But on closer inspection, that snapshot wasn't so beautiful. Surf Expo golf scrambles at Shingle Creek usually draw 60 golfers; last week's brought in only 30 people, even though it cost only $95 to play.

"You have to stay in a room if you come to Orlando," said Dave Scott, Shingle Creek's director of golf. "You have to eat when you come to Orlando. But you don't have to play golf."

As the country faces a deep recession, and with Central Florida hit hard by the foreclosure crisis, many recreation sports businesses across this region are suffering. Nowhere is that more obvious than in the golf industry, where many course operators and retailers experienced drops in revenues during the latter stages of 2008.

"We were so optimistic in July and August," said Jeff Hamilton, who owns Golfpac Travel, an Altamonte Springs, Fla.-based company that sells custom golf packages and runs the Web site GolfOrlando.com.

"But as the economy really started falling apart people's wallets did start snapping shut very quickly."

That lesson has become painfully apparent at Central Florida courses in recent months. Golf Datatech, a Kissimmee, Fla.-based firm that tracks the industry's trends, estimates that the total number of rounds played in the Orlando area declined by 3.4 percent last November compared to November 2007.

The PGA of America also tracks rounds played. Paul Metzler, the association's senior director of consumer marketing, industry research and industry relations, said preliminary information shows rounds played at Orlando-area courses in December were down 7-8 percent from December 2007.

While those decreases might not seem especially large, consider that those numbers don't take into account that some courses are discounting rates sharply to lure players.

Perhaps more than ever, Orlando — one of the country's golf meccas because of the warm weather and the quality and quantity of its courses — has become a buyer's market, which is especially good news for local golfers.

Savings deals do exist. ChampionsGate Golf Club, near the boundary of Osceola and Polk counties, is offering local residents who book three or more days in advance unlimited golf and a cart for the day for $60. That special didn't exist a year ago.

Last week at ChampionsGate, regular rates to play 18 holes with a cart ranged from $105 to $130, depending on the time of day and on which of the two courses the golfer was going to play. Even those regular rates were down $10 to $15 from the same period the previous year.

"Every golf operator is trying to be as creative as he possibly can," said Alan Findlay, the course's general manager. "It's going to be those with the best innovations and creativity that will get through this storm and see better times ahead."

No one knows for sure just how much money is spent in this market on golf. But a 2006 study conducted by D.K. Shifflet & Associates for the Orlando/Orange County Convention & Visitors Bureau said 1.38 million people who visit Orange, Osceola and Seminole counties each year play at least some golf during their trips. On average, the study said, those golfers spend $753 million annually on lodging, food, golf and other expenses while they're here.

A resort such as Shingle Creek depends on out-of-towners for much of its business. Scott said 35 percent of Shingle Creek's golf business comes from its hotel, while another 10 percent comes from other properties also owned by hotel magnate Harris Rosen.

Last January, outings and tournaments such as the Surf Expo event accounted for 1,200 rounds of golf at Shingle Creek. This January, Scott said, the resort might sell just 500 rounds for tournaments and outings.

"It's going to be an interesting year," said Justin Kuehn, the director of business development for ExecGolf, a Jacksonville-based company that offers reduced rates at select Central Florida courses in exchange for yearly membership fees ranging from $149 for four memberships to $179 for one membership.

"Rounds will continue to decrease as we struggle through this economic slump, and we feel it could potentially get worse. You can gauge rounds as simply as watching the Dow. When the Dow is down, people don't play."

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For the most part, the golf industry is profitable. According to the PGA of America's PerformanceTrak figures, courses in this state on average enjoyed an operating profit margin of 19 percent in 2007.

Now, however, there is a general sense that 2009 will be tougher. Even some private clubs are experiencing difficulties. At Rio Pinar Country Club in Orlando, some people who work in the real estate, mortgage and housing industries have given up their memberships, said General Manager Nick Dunleavy.

"We are assuming that it will get worse before it gets better," Dunleavy said. "Our budget plans reflect that."

Still, he said, the total number of rounds at the country club played has remained fairly steady. These days, Rio Pinar's most popular golf memberships are introductory ones that offer unlimited golf with carts for $2,750 for singles and $3,250 for families.

And for the first time, the country club is offering payment plans on its memberships because of the economy.

At Orlando's Eagle Creek Golf Club, a 5-year-old course that's open to local players, administrators have intensified their marketing efforts. They offer videos on their Web site. They send out e-mail messages to existing clients with tips on how to improve their games. The e-mail blasts sometimes include discounts; last week's blast included a $10 discount to play on weekdays.

"Every little thing we can do, we do," said David Collins, the club's director of sales. "In business, there's always windows of opportunity. When it's good, you don't have to open all the windows. Now, you have to open all the windows."

And that has some people in the industry concerned. They worry that if some courses discount their rates too aggressively, it will be more difficult to raise the rates back to normal levels once the recession ends.

"When an eight-minute window goes by (without someone teeing-off on a course to begin a new round), that's a piece of inventory you've lost," Kuehn said. "Golf courses need to find new ways to save that lost inventory but not through decreased pricing to a point where it becomes damaging — damaging to a market, damaging to an industry and damaging to a golf course."

In the meantime, the recession's trickle-down effect has been felt across the industry.

A spokesperson for the PGA of America said that the unemployment rate among its members has reached 4.7 percent. Although that's well below the national average, a report distributed at a recent meeting of the PGA's local chapter said that the employment services specialist for Georgia and Florida is "receiving more calls than normal from PGA professionals who have lost positions, lost staff . . . or who are concerned about their positions."

As business has declined at Shingle Creek, more managers are doing the work typically done by hourly employees. While there haven't been any job cuts, those hourly employees are working less, and the managers are working more.

Tom Stine, Golf Datatech's co-founder, said sales for golf equipment — basically, everything besides apparel — at on-course pro shops and golf specialty stores were down 4.7 percent nationwide from January-November 2008 compared with those same 11 months the previous year.

"That's a significant drop; it's not a drop that the industry likes," Stine said. "But in this economy, which is as bad as this country has seen for a very, very long time, being down 4.7 percent is fortunate compared to other industries."

Mike Erickson, the regional manager for Edwin Watts Golf's six Central Florida stores, would not disclose sales figures for his shops. Still, he acknowledged times are rough.

Business, he said, started to drop two-thirds of the way through 2008.

"Golf is a disposable-income business," Erickson said. "It's not a necessity business. Our business is off a little bit just like everybody else. We're still doing well in comparison to everything else that is going on."