Monday, January 22, 2018
Business

Golf industry in slump as courses struggle for profitability

TAMPA

Golf courses in Colorado and Minnesota are promoting cross-country skiing on their fairways to earn cash in their offseasons. Business deals are now more common on high-end bicycles than on the greens, according to the New York Times. And a shuttered Michigan championship course will soon produce rounds of beer instead of golf — a farmer is planting the course in hops.

Even Tiger Woods is in a slump.

"It's hard times in golf," said Lavon Simmons, 67, as he loaded his clubs into a car after a recent round at Rogers Park Golf Course, one of three city-owned courses in Tampa that have collectively lost $3.5 million since 2009. "It's a real shame because it's a great sport."

Like a weekend hacker with a bad slice, the golf industry both locally and nationally is in deep rough. Tough economic times, coupled with a glut of golf courses, have produced losses for the industry for much of the past decade, industry people say. In that time, the game has lost 5 million players, according to industry figures.

The 462 million rounds played in 2013 is the lowest since 1995's 441 million and down from the peak of 492 million in 2000-01, according to Golf Datatech.

The trend is seen throughout Tampa Bay.

The Cheval Golf and Country Club in Lutz is in bankruptcy. Pinellas County closed its Airco Golf Course in Clearwater in 2011 after mounting losses. The Plantation Palms Golf Club and its 11,000-square-foot clubhouse in Land O'Lakes closed last year. The Temple Terrace Golf and Country Club, located on city land, is struggling with solvency and is more than $100,000 behind in lease payments and reimbursements to the city.

That is just a partial listing of troubled courses.

The thousands of fans attending the Valspar Championship at the Innisbrook Resort and Golf Club in Palm Harbor that opened Thursday and continues through Sunday may provide evidence professional golf is healthier than the game in general.

"For the professional player, golf has never been better," said Rick Lucas, director of Clemson University's PGA golf management program.

But even with the PGA Tour handing out millions in prize money at its events, the courses where the recreational golfers play struggle to fill their tee times.

At the Tampa Sports Authority, the agency that runs public sporting venues like Raymond James Stadium, officials have cut costs yet have struggled for a decade to bring collective profitability to the three courses it manages for the city of Tampa. Losses at the TSA's three courses — Rocky Point, Rogers Park and Babe Zaharias — are expected to continue this fiscal year.

"Lack of play," Eric Hart, executive director the sports authority, said when explaining the losses. "Our courses are in the best shape they've ever been in. They're in wonderful shape. It's really truly (a lack of) play. It's not any other part of our business."

Golf-related businesses big and small are smarting, too.

On a sleepy Thursday afternoon at the Tampa Golf Range in North Tampa, fewer than a half dozen golfers took practice cuts on the 13-acre driving range. Owner Philip Cole said business got real slow a few years ago.

"There are days when it's tough," Cole said, "days when you're out here and you know you still have to make your loan payment and pay the electric bill and all the other bills and the revenue just isn't there. Those are the days you question whether you should shut the door."

Why the downturn?

Some point to the slow pace of play where rounds can take far more than four hours, driving impatient fans from the game. Tiger, the sport's biggest draw, is now a middle-aged golfer in a slump with his gimpy knees and a bad back, sapping golf's buzz factor.

Golf management experts point to simple economics — a glut of courses and an economy that has struggled for much of the past decade. Groceries in many homes take precedence over a relatively expensive game.

Lucas at Clemson said golf peaked in 2000 as new courses opened with regularity in anticipation of demand, especially among the young and minority groups drawn by Tigermania. But Lucas said the industry had unrealistic expectations on continued growth.

Lucas said the nation now has just fewer than 15,000 courses. Industry figures show more courses have closed than opened for eight straight years with an average of 137 closing annually since 2011. Lucas said another 500 to 1,000 will have to close within the next decade without new growth in golf's popularity.

"It's just like any bubble," Lucas said. "It was predicated on a 'sky is the limit' mentality but not on a good business plan. Now reality is setting in."

Lucas said golf will stabilize once the fat is cut. Despite losing 5 million golfers in a decade, he said, "I think 25 million golfers is still a big number."

To be sure, times are not awful for everyone, and the National Golf Foundation often slaps the media for telling a "negative narrative" about a sport it believes is still in fundamentally good shape.

St. Petersburg's three municipal courses would be earning a small profit except for money they are required to pump back into the city general fund, said Jeff Hollis, the city's director of golf. In the past year or so, weather more than economics seems to be the culprit when business is slow, he said.

"I wouldn't say we're doing great," he said. "But we're doing better than some. It's not like it was 10 or 12 years ago. But we've got guarded optimism about the future."

Municipal courses have been hit particularly hard as private clubs with their sparkling courses lower prices to draw golfers. Hart at the Tampa Sports Authority said Tampa's three public courses have lost golf leagues to some of the private clubs.

At the public Largo Golf Course, "FootGolf" helped the city-owned course earn a small profit in 2014, said Chip Potts, Largo's recreation program manager for athletics and the golf courses. The game has been introduced to a handful of courses nationally. Potts said his course still gets most of its revenue from the regular game, and sometimes players for the two versions of the sport are on the course at the same time.

FootGolfers kick a soccer ball down fairways and eventually sink them in 21-inch diameter holes cut into the turf. Of 49,500 rounds played in 2014, Potts said, 5,500 were FootGolfers.

"We'd be hurting without FootGolf," said Potts, acknowledging the marriage of FootGolf and golf can be challenging. "There's a learning curve on both sides. Golf is steeped in tradition and strict expectation on how you act. FootGolf is like soccer. Players hit the ball and cheer."

But at least in Largo, the weird new sport, Potts said, is helping the old traditional one stay afloat.

Contact William R. Levesque at [email protected] or (813) 226-3432.

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