Golf courses hit a rough patch
In today’s economy, golf is in the rough. And with a bad lie. Once-haughty country clubs are offering specials. Courses have closed or cut back on maintenance. The world’s top golf ball manufacturer has seen demand for souvenir balls stamped with company logos drop off.
And so officials in the golf industry have joined the nation’s bankers, auto makers and insurance companies in marching to Washington in search of understanding. They’re not asking for a bailout, but they do want greater appreciation of their industry’s importance.
“There are a number of congressmen who do not understand the economic impact of golf on their local community,” said James B. Singerling, chief executive of the Club Managers Assn. of America. “Our message to Congress is that when you pass legislation that makes it difficult for the golf industry to stay in business, you don’t hurt the wealthy. Who you hurt are the employees.”
Singerling and others will be in Washington today to make sure Congress does not lump the golf industry in with massage parlors, suntan facilities and liquor stores as businesses undeserving of federal help.
“We’re in an unprecedented era of government involvement in business, so we have to be in D.C. to be able to make sure that people, when they’re writing law or making comments about our industry, realize all of the positive impact that golf has,” said Joe Steranka, chief executive of the PGA of America.
Federal aid to golf has been a touchy subject since the 1990s, when the Federal Emergency Management Agency came under scrutiny for spending that included $872,000 to repair an Indian Wells, Calif., course damaged in 1993 flooding. According to FEMA’s inspector general, the city-owned course was clearing about $1 million a year.
This year, golf courses, along with casinos and zoos, were excluded from receiving economic stimulus funds passed by Congress.
But Steve Ellis of Taxpayers for Common Sense was unsympathetic. “If you’re a private country club, people are paying you a lot of money to be a member. And maybe those are the people who should be picking up the tab for cleaning up the golf course after a disaster. . . . At the end of the day, this is not an essential function that has to be returned immediately to get the country working again.”
The lobbying effort gained some urgency after lawmakers reacted angrily this year to the news that Northern Trust Co., a recipient of financial bailout money, hosted parties in connection with its sponsorship of a golf tournament at Riviera Country Club in Los Angeles.
Already, executives say, there has been a cutback in the corporate golf outings that could help the industry get through tough economic times and raise money for charity.
“When things are bad, they’re bad for everybody,” said Robert L. Bouchier, executive director of the California Alliance for Golf, which has fought a proposed tax on golfers to help bail the state out of its financial crisis.
Signs of strain are everywhere.
“Due to difficult economic times in the country, especially Michigan, we have decided not to open High Pointe Golf Club for this 2009 golf season,” the course’s website says. Nationwide, club membership waiting lists have been reduced or eliminated. The Detroit Golf Club has cut its $18,000 initiation fee by more than half. Pebble Beach Co., announcing job cuts last week, said that group cancellations at its prestigious Northern California course have exceeded new bookings in four of the last six months.
“Even in a recession, people are pursuing their passion, but they’re moving down the value chain, sort of the Wal-Martization of golf,” explained Mike Hughes, chief executive of the National Golf Course Owners Assn. “Where they were paying a $60 green fee, they might go to the lower end and pay $20 to $30 for a round.”
Even so, golf’s troubles have affected city coffers. In Los Angeles, for example, a 6% drop in play at the municipal courses is expected to translate into about a $1-million drop in revenue to support recreation programs this year.
Amid the downturn, some courses are doing the once unthinkable: cutting back on maintenance. “That’s messing around with the Holy Grail,” said Todd Beals, chief operating officer at the Detroit Golf Club.
But others in the industry think that equation may be changing.
Less mowing only means that “it’s just going to be a little bit slower on the fairways,” said John Dodge, government affairs coordinator of the Michigan Golf Course Owners Assn.
Despite the belt tightening, most industry executives believe golf will weather the storm.
“I think we’re similar to the movie industry,” said Jorge Badel, senior golf director for the Los Angeles County Parks and Recreation Department. “People need stress relief. They need to get their minds off of the economy.”