Golf clubs are eyeing new revenue streams to improve their lie.
By Mike Lewis
The past few years have been tough for the nation’s golf industry, and different establishments are taking different approaches to hack out of the financial rough.
In the Crossroads area, for example, some golf clubs have invested in event venues to broaden their revenue stream. Some are sponsoring leagues, reducing rates and offering events that target a younger generation. One golf pro reported that the business “is the best it’s been in a long time.” Another reported that small clubs, in particular, are in “survival mode.” And a third reported that the golf numbers are rebounding, although they remain down from the peak years.
Some golf pros said the industry still feels what they called the “Tiger Woods factor.” The golfer’s popularity soared with his success in the 1990s, and the golf industry as whole soared along with it. But then the industry ran into a series of hazards, from Woods’ sagging fortunes to the Great Recession to a millennial generation that has less interest in the links.
At bottom, it’s a matter of supply and demand, said Damon DeVito, managing partner of Affinity Management, which manages Musket Ridge Golf in Maryland and other hospitality and recreational ventures. The basic challenge, he said, is that the industry overbuilt nationwide, particularly with day-rate and residential facilities. But the number of golfers did not surge. DeVito attributed that to a host of factors, from the time it takes a play a round to young people not picking up the game because of other interests, such as club sports.
“It’s just math,” he said.
The National Golf Foundation reported last year that about 205 courses closed in 2017. The foundation called it “a continuation of a correction in supply and demand.” That cut the total to about 14,800 facilities. The effects have hit the Crossroads area, with, for example, the closing of the Waynesboro, Pa., municipal golf course last year. The borough’s leadership is looking for alternative uses for the property.
Even with those closings, the United States remains “the best-supplied golf market in the world,” the foundation reported.
Just as different golfers approach courses in different ways, DeVito said different courses are approaching their business models in different ways.
Musket Ridge, for example, faced an investment crossroads about a decade ago. One option was to increase the number of holes, looking to attract more players. Another was to use that money instead to invest in an events venue. Musket Ridge went with the latter, which has been ranked among Maryland’s best wedding venues.
“That’s half our business,” DeVito said of the events center.
To get a feel for the state of golf this spring, Crossroads interviewed leaders at three different types of golf establishments. Here are their views.
‘A lot of stuff going on’
“Golf is the best it’s been in a long time. … Last year was one of the wetter years on record, so that was a long year. But overall, it’s been great,” said Josh Ricketts, head golf professional at Musket Ridge Golf Club, a public facility near Myersville, Md.
Ricketts said Musket Ridge offers “pure golf.” The course was designed by the renowned “Gentleman” Joe Lee, and golf publications have rated it among the finest in Maryland.
“This is one of his final designs, and it is believed to be one of his best. … It’s very playable, which we’re proud of. Every hole is different and unique in its own way,” Ricketts said.
“It’s probably the finest piece of property in Frederick County,” he added. “The views are breathtaking.”
Still, the business has changed.
“We don’t see all the corporate stuff we saw back in the early 2000s,” Ricketts said, and millennials “do treat it a little differently than the guys did 20 years ago.”
Among other things, Musket Ridge has developed several different membership classifications to appeal to a variety of golfers. And it has partnered with other businesses, such as Flying Dog Brewery, to appeal to other people.
“We run a lot of different events with them through the season,” Ricketts said.
‘Have to get younger’
“I think most golf courses across the nation are in survival mode,” said Don Harriman, general manager of the Waynesboro (Pa.) Country Club.
“It’s very important for us to stay private,” Harriman said. But, particularly for small clubs, the business model is “very difficult.”
“We’ve really done a lot of out-of-the-box things. This is the biggest year yet. We’ve dropped our rates,” he said.
The club has slashed basic memberships from $400 a month to $230 a month. There are even lower rates for people who are younger than 35, and still lower costs for those younger than 30.
That’s intentional. The average member at Waynesboro is 67 years old.
“We have to get younger. We have no choice,” Harriman said.
The program started in February. In the first month, the county club picked up 24 new member.
“For it to work, we’ve got to get to a sweet spot. … We have to have between 80 to 100 new members to make this work,” he said.
From the initial response, he’s pretty confident the club will hit that sweet spot.
The Penn National property near Fayetteville, Pa., includes 36 holes of golf as well as a residential development and an inn. It’s destination spot for golfers, said David Beegle, the head golf pro.
“We attract people from a large area,” he said. “We have a strong following from New York state. We get a lot of people from New Jersey. … Once we get a group here, we have a retention rate of 80 to 90 percent. … Many of the groups come back year after year after year. I can call them by name.”
Penn National is considered a semi-private course. Most golfers are either residents of the development or people who have traveled to the area specifically to play there, he said.
Beegle has been at Penn National since 1987. He’s seen the ebbs and flows. At one point in the 1990s, he said, the nation was adding 400 new courses a year.
“Well, they couldn’t create the demand like they thought they could,” he said.
At Penn National in the late 1980s, he said, there might be 25,000 rounds a year played on the course, which was 18 holes then. Now there might be 50,000 on 36 holes. That’s down from the peak years, but it represents a recovery, he said.
People aren’t retiring as early as they once did, he added, so they do not have as much time to play golf. And younger people don’t share the same passion for the game.
And Beegle said interest still ebbs and flows with the fortunes of a certain PGA professional.
“There’s definitely a Tiger factor,” he said. When Woods plays well, “it’s good for everyone in this business.”
This story was updated at 1:42 p.m. April 1, 2019, to correct the spelling of Don Harriman’s name. Crossroads Business Journal apologizes for the mistake.