The Pellucid Perspective - April 2014 - (Page 7)

Golf course operations Beating the high end daily fee blues GM O'Brien blends sales, F&B and a good golf course to buck industry trend By Jim Dunlap i t can easily be argued that the hardest hit segment of the golf course industry during the past decade has been the high end public facility. Fueled primarily by real estate developers hawking golf course view lots, a strong pre-911 economy, available financing, a fair number of ego-driven owners vying with each other to have the longest, hardest and best-conditioned properties in the market, and those still worshipping at the NGF's "build-a-course-a-day" altar of the late 1980s, expensive to build and maintain courses proliferated in the years before and immediately after the turn of this century. Many of those are now on their third owner, now priced in the mid tier at best, or closed entirely. Maderas Golf Club, located in the San Diego suburb of Poway, California, would seem to be a target for the same fate. Designed by Johnny Miller and the firm of Robert Muir Graves and opened in 1999 in a low density, high priced community within a San Diego County market containing nearly 100 golf courses, Maderas is a challenging course with greens fees among the highest in the county - peak weekend rates of $210 for visitors and $165 for area residents, although the facility's dynamic pricing model provides some lower price points depending on times and days of the week. Given those factors, combined with an ongoing struggle with water supply and quality, most industry observers would expect the Maderas books to be awash in red ink and the course to be slashing greens fees like an afterChristmas sale at Macy's. That's not the case, and the savvy guidance of General Manager Bill O'Brien is a big part of the reason. When the books closed on 2013, Maderas showed an 8 percent increase in rounds over 2012, and a 10 percent hike over 2012 in golf green fee revenues. To date this year, rounds are basically on pace with 2013 and green fee revenues are up over last year by approximately 10 percent due to some modest rate growth. Granting that Southern California has fared better on the weather front than most of the country during the past 15 months, although not dramatically better than its usual sunny norms, increases like those would have champagne corks popping at similarly positioned courses in most corners of the U.S. golf industry. O'Brien is an Arizona native and golf and hospitality industry veteran with stops at facilities including The Arizona Biltmore in Phoenix, Troon North in Scottsdale, the Westin Savannah Harbor Resort & Spa in Georgia and the Westin Mission Hills Resort and Spa in Rancho Mirage before taking over the reins at Troon Golf-managed Maderas in 2006. O'Brien is a PGA professional who admits that he doesn't get out to play often these days, but it's obvious that the business plan he has carved out for Maderas is based much more on his hospitality www.PellucidCorp.com industry experience than an ability to correct a faulty swing, merchandise a golf shop or maintain the course itself. At Maderas, just as in hotels, sales is the engine that keeps the facility ahead of the curve, with a solid dose of F&B and the highly rated golf property itself thrown in. "We've put a lot of emphasis on crafting and developing a legitimate sales force," said O'Brien, who employs a general sales manager, two golf sales managers and two catering sales managers. "I feel strongly that people make deals with people, and a dedicated sales force will generate an immediate return, and we're not in a position to sit around and wait for things to get better with the economy and the golf industry in general. I tell people, and I believe it, that there's more value in five salespeople than in a half million dollars in print advertising." While O'Brien and his salespeople work diligently to develop relationships with local and regional corporate, administrative, charitable and civic organizations, O'Brien has also expanded the course's marketing reach to the other side of the Pacific. The emergence of a Chinese middle class and the historic love affair between golf and the Japanese and Korean traveler have not escaped O'Brien's notice. It doesn't hurt that the Maderas price point, which may deter price-conscious local golfers or groups, is a bargain to the typical Asian traveler who is used to much higher greens fees back home if they can get on the course at all. "I'm more optimistic about domestic travel than in the last four or five years, but it's not growing at the same pace as international," O'Brien said. "There's a direct flight from Tokyo to San Diego now, and I'd be foolish not to get in front of the right tour operators and try to bring some of those golf travelers to Maderas. We also work to put together packages of lodging and golf at Maderas and other local courses and also promote those in conjunction with some of the larger OEMs in the golf industry who are located here." f&B big in the p&l The dining facilities in the relatively modest Maderas clubhouse are not elaborate, but O'Brien said their contribution to the overall facility bottom line far outstretches their square footage. Although dining options abound in the Poway community, other nearby upscale neighborhoods like Rancho Bernardo and San Diego itself, Maderas has carved out a successful F&B niche with pre- and post-golf catering, wedding catering and other social event catering as well as corporate luncheons and meetings. O'Brien also guessed, correctly as it turns out, that the rolling hills of the golf course, plenty of free parking and a uniquely themed casual dining event might be a hit with local clientele, even if they'd never set foot on a golf course. The Pellucid PersPecTive 7 http://WWW.PELLUCIDCORP.COM

Table of Contents for the Digital Edition of The Pellucid Perspective - April 2014

TOC
Can "hacking" reverse golf's demise?
Putting for profit, and participation
Affordable golf: Back to the future?
Beating the high end daily fee blues
March '14 golf weather impact: Winter finally yields
Some Busch Garden patrons, Tampa golf market have had too many
City course gambling charges dropped, but GM resigns due to stress
Social media - more message, less massage, please

The Pellucid Perspective - April 2014