Rounds and revenue: How golf industry survivors keep out of the rough
REGION – Despite "the Tiger Woods phenomenon," the golf business isn't what it used to be, particularly here in northern Michigan. In fact, a decade after a late '90s boom when experts insisted we couldn't add courses fast enough to keep up with demand, the scorecard has changed considerably.
Some northern Michigan golf courses are "treading water," while others have faded away, victims of a sluggish economy and stiff competition.
Those that have closed in recent years include Matheson Greens in Northport, Mitchell Creek and Cedar Hills in Traverse City, and Veronica Valley in Suttons Bay.
"There's just been a downward trend since the hey-days of 1999 and 2000 in the number of rounds played, which is a function of the many other recreational activities and other options for discretionary income," said Steve White, owner of Bay Meadows Golf Course, located just outside downtown Traverse City.
"In this economy, it's a challenge for golf courses all over the state," added David Graham, executive director of the Golf Association of Michigan. "But we're a golf state. We're still No. 1 in the nation in the number of public golf courses. We lost six courses last year. That's not bad when you consider a state like Ohio lost ten. But the challenge for the golf industry in Michigan is to find creative approaches."
Graham admits that the state's golf market has been flat. "But it's better than the alternative," he said. "And I think, on the whole, we're more optimistic this year than we were last year."
Three other "survivors" have each lasted more than 30 years in the Grand Traverse golf industry-Rodger Jabara, guest services manager of Crystal Mountain and former PGA pro at Schuss Mountain; John Olson, co-owner of Elmbrook Golf Course; and Chuck Olson, general manager of King's Challenge Golf Club.
Chuck Olson believes that attracting repeat business is as important as bringing in first-time golfers.
"I'm a dinosaur in this business," said the 50-year-old Olson, who started at the Traverse City Golf & Country Club in 1979. "I've seen a lot of changes in golf up here during that time. In our business it boils down to two things: rounds played and revenue.
"I read somewhere where it's seven times more expensive to get a new customer than to retain an old one," he continued. "So I think golfers, like any other consumer, want a level of consistency. And in our business, they want to go out and play golf and get a respite from the big, bad world."
Olson is general manager and the PGA pro at King's Challenge Golf Club outside Cedar. The course has faced problems of its own, but will forge ahead in 2007 despite a foreclosure on the $4.4 million property and an impending change of ownership.
"We have a great course-an Arnold Palmer course-and our prices are reasonable," said Olson. "For instance, we've been marketing our Steak & Play for five years. That's 18 holes of golf, with cart, on a premier course, plus a steak dinner for $45 during weekdays. It's one of the reasons people keep coming back."
Still, Olson admits that the golf season in northern Michigan is short compared to warm weather states like Florida and California.
"We open as early as we can in the spring and stay open as late as we can in the fall," he said. "But a lot of our business is done during the month of July and the first two weeks of August. Those six weeks are so crucial to your business."
White from Bay Meadows echoes the frustration about weather. "It just seems we haven't been able to piece together a good spring and fall in the same year."
At Elmbrook Golf Course, which opened its first nine holes in 1966 and went to 18 holes in 1969, co-owner John Olson (no relation to Chuck Olson) feels there are three main reasons for Elmbrook's success.
"We feel that your course has to be user-friendly, that people want to come back and play," he said. "Secondly, you have to have a friendly staff, which we do. We have a great staff. And you can't discount having a good proximity to your customers. We are just off Hammond Road and within an easy drive for anyone in Traverse City."
But even with all of that in Elmbrook's favor, Olson says it's been a challenge.
"We've had to really stay on top of our marketing," he said.
So what helps courses survive the "weeding out" process? Besides niche marketing, competitive pricing and a good golf course, there are other factors. "One way is to help golfers improve their game," said Brian Lawson of Crystal Mountain, which offers two 18-hole courses and has plans for another course on the drawing table, although there is no timetable yet. "We have a great golf staff, first-class practice facilities and two beautiful courses, plus we have rooms and restaurants."
White at Bay Meadows will be putting a greater emphasis on the course's playability and location this year. "We're betting that our type of facility-a shorter, more playable course-will appeal to a broader audience, including beginning golfers, families, and retirees."
"It still comes down to trust," adds Jabara, who has worked in the northern Michigan golf business for 35 years and has a good handle on what separates the survivors from the scooters. "People trust that your facility will be customer friendly-from the course to the staff."
For the survivors, those intangibles have added up to long-time success in an industry where stability isn't par for the course. BN