The Pellucid Perspective - October 2012 - (Page 2)

MANAGEMENT COMPANIES Pacific Links – golf ’s new kid on the block Former ClubLink CEO launches 3-pronged reciprocal membership and travel program targeting Chinese tourism By Jim Dunlap P acific Links International is the newest company making waves in the golf industry, buoyed by a rising tide of freespending Chinese golf tourism and the reciprocal club membership lessons learned by CEO Bruce Simmonds during his years as the founder and CEO of Canada-based ClubLink. Based in Canada but operating primarily in the U.S. and China, Pacific Links currently owns eight courses, primarily in Hawaii and Las Vegas, but with the purchase of the two courses at Ka’anapali Resort on Maui and others under contract or in the final stages of purchase in California and Las Vegas, Simmonds and Pacific Links will soon be halfway to their portfolio target of 30 courses in their first five years of operation. Backed by the deep pockets of owner Du Sha, a Canadian citizen and Chinese entrepreneur who founded and sold the 97-store Home World Group chain in China, and his shareholders, Pacific Links has purchased – for cash – approximately $100 million in golf course assets to date, with the additional purchases at Ka’anapali, three courses in California and several others in the Las Vegas market pending, according to Simmonds. The company is also redeveloping its 36-hole property in Tianjin, China into what it will call The 27 Club, featuring individual hole designs by 27 famous golfers. The former ClubLinks owner, who quietly founded Pacific Links in 2009, said that in addition to the 30 owned properties that Pacific Links is targeting, the company plans to expand its member access portfolio to 60 courses through affiliate relationships with other prime destination properties, including a number of the TPC-branded courses. Acquisition targets for the company are primarily located on the West and East coasts of the U.S. – largely the West, including Las Vegas and perhaps the Phoenix-Scottsdale area – to facilitate international tourist access. “While those areas are our primary focus, we’ll look at anything that is a good opportunity and would add value to our members,” Simmonds said. “The Pete Dye Course in West Virginia, for instance, is a highly rated course and a unique property that we purchased from Textron, and is the quality of golf course that was attractive to us.” Pacific Links offers three basic membership products, Simmonds said, all with reciprocal access to other Pacific Links properties. The first is designed for residents of the locales in which the company has courses, which Simmonds described as “realistically” priced. A second, even less expensive dues proposition, is a national membership for golfers who do not live near a Pacific Links course, but would like access to the company’s courses during vacations or business travel. The third option is the international membership, primarily targeting Chinese travelers, which Simmonds believes will develop into a phenomenon similar to the Japanese golf travel boom in the 80’s, without falling victim to the economic woes in Japan that torpedoed that revenue stream (and some Japanese U.S. course buyers’ bank balances). All three memberships, and to a large degree the economic viability of the Pacific Links strategy, will be tied to a third party travel agency operation based in Las Vegas which the company is currently finalizing, complete with a full service supply network of multi-lingual concierge personnel and call center operators, including a heavy concentration of Mandarin and Cantonese speakers. Simmonds said the fact that Chinese travelers can now apply for a U.S. travel visa via Skype, rather than enduring a lengthy interview at a consulate in China, is an additional boon to Chinese tourism in the U.S. Simmonds and the rest of the Pacific Links management team, which includes former CNL and ClubCorp executive Rudy Anderson, are in this for the long haul, Simmonds said. He said that being wholly owned, rather than a publicly traded company, enables the company to take a long-term perspective without the pressure from shareholders to generate immediate returns. Eventually, Simmonds said, Pacific Links will operate all of its properties in-house, although in the case of some acquisitions, existing managing entities may stay on through the ownership transition process for a time. “Our management team, our owner and our internal shareholders all agree that to be successful in the long run, it will take time, and we’re willing to grow slowly,” Simmonds said. “We plan to do things right long-term. It’s not about numbers. We’re looking for the right destinations, the right kind of properties, not trying to be all things to all people.” Simmonds and Pacific Links may have taken a while to loosen the kinks out, but it appears that they are picking up the pace in a hurry, and people – especially those with plum West Coast properties for sale – are noticing. n OctOber 2012 2 The Pellucid PersPecTive

Table of Contents for the Digital Edition of The Pellucid Perspective - October 2012

The Pellucid Perspective - October 2012
Contents
Pacific Links – golf ’s new kid on the block
Which markets will recover first? A guide to supply absorption patterns
Moving forward, in different directions
Don’t sign away your web domain
September golf weather impact: Stayin’ alive
Growing Nashville market holding its own
Cordillera to be sold by year-end according to mediation decision
Trick or treat!

The Pellucid Perspective - October 2012