Fixing Florida

A five-step plan to help the courses in the largest golf state in the union—and eventually the rest of the country—emerge from the worst market in decades

By: Ronnie Musselwhite

Appeared in Winter 2010 LINKS

Perhaps it was fitting that the most infamous car wreck in golf history took place in the community of Isleworth, located outside Orlando, Florida. Because the Sunshine State’s golf industry has taken a hit as severe as the dents on Tiger Woods’ black Cadillac Escalade.

While the economic downturn has now affected golf everywhere, Florida felt it first, several years ago. In addition, the ailing real estate market has hit Florida golf especially hard, as half of the state’s 1,200 golf facilities are tied to housing. Now, aside from the Woods scandal, the primary golf news seemingly emerging from Florida are tales of bankruptcies, foreclosures and member-led takeovers.  

But the Sunshine State’s golf industry can be fixed. And because of Florida’s leadership position as the state with the most courses, its recovery can shine the way for the rest of the nation.

“Florida has led the way through these cycles repeatedly, and I view it as a leading indicator of market trends,” says Henry DeLozier, a principal with Global Golf Advisors and former head of Pulte Homes/Del Webb’s golf portfolio. “All of the ingredients that have made Florida attractive historically are still in play, and those attractive elements will continue to draw travelers and people who are retiring or relocating. So Florida will also start to recover faster than other troubled markets.”

That recovery won’t return the health of the game to its heyday of the 1990s and most of the 2000s. Nor will it happen by itself. But there are solutions to the current crisis, and here are five things that must happen to fix golf in Florida—and the rest of the country.

1. There must be a true economic rebound.
The stock market has rebounded quickly and the housing scene is gradually improving, albeit mostly among lower-priced and distressed properties. Most analysts believe there won’t be a true recovery until companies start hiring again and enough people feel secure enough financially to loosen their wallets for golf.

“I believe golf is a real lagging indicator,” says Hud Hinton, president and CEO of Troon Golf, a Scottsdale, Arizona-based management company that operates nearly 200 courses, resorts and private clubs worldwide, including 10 in Florida. “There’s not too many things more discretionary than golf or a private club membership. In terms of our industry, we’re going to follow the rest of the economy.”

2. Supply must come in line with demand.
Not long after the National Golf Foundation issued its now-infamous declaration in 1989 that one course needed to open every day for a decade in the United States to keep up with demand, developers heeded the call.

And to maximize profits, many of the courses were attached to real estate communities, especially in Florida. The problem was, the premise was flawed: The market wasn’t quite there. After reaching a peak of 27.8 million in 1990, the number of golfers in the country has hovered at about 25 million.

“The biggest mistake made in the past is that golf courses and residential communities were being built with no reference to customer demand,” says DeLozier. “People just weren’t paying attention to their customers and what they wanted and needed.”

This resulted in an oversupply of courses, and golf now finds itself with two plausible options: Attract substantially more players or close some courses.

To date, the latter is proving to be the more efficient method. The first net declines in courses since 1945 occurred nationwide in 2005 and in Florida in 2006, and the closures have accelerated in the last 18 months. Among the most afflicted are mid-level daily fee and semiprivate courses, which don’t have deep-pocketed members to purchase the facility from developers, along with resorts, a category that DeLozier says “has yet to hit bottom.”

Historically low occupancy and guest room rates, coupled with massive debt loads, have set the stage for a fallout that could mirror the ones that have already transpired in residential properties.

Almost on cue, Amelia Island Plantation near Jacksonville recently filed for Chapter 11 bankruptcy protection, while Grenelefe Golf and Tennis Resort, a once-proud property near Tampa, is on the market again—just eight years after being purchased at auction by Westgate Resorts.

“The bulk will be rescued in some form of recapitalization or increase in investment buyers,” says Don “Toby” Tobin, a licensed real estate broker who lives in coastal Flagler County and blogs about Florida’s real estate market at

Other courses unable to find new ownership will have to close.  While the closing of a course is always painful, it is good for the overall health of the industry.

3. The model must change.
Over the past 20 years, the lure of easy money spawned a level of one-upmanship that reached absurd proportions with each new course, community, club or resort that opened. No longer was it enough to build a clubhouse and a golf course; facilities were stretched to palatial dimensions, and developers anted up millions just to have a big-name course architect walk their property.

For a while, Tesoro in Port St. Lucie was the gilded standard bearer for luxury golf real estate in Florida. To complement two courses designed by Arnold Palmer and Tom Watson, developer Bobby Ginn spent $45 million to build a 115,000-square-foot clubhouse—nearly twice the size of the main building at California’s Hearst Castle, the archetype for opulence and extravagance.

“Most of these developments loaded up their projects with too much debt,” asserts DeLozier. “The debt was no problem as long as the home-sales velocity was good, but as soon as that velocity slowed, the debt meter didn’t slow but the revenue meter did. And so, you had the perfect storm.”

Rather than build monuments, golf communities must offer comfortable, real settings. According to Jim Gilmore, an Ohio-based consultant and former Procter & Gamble executive who co-authored The Experience Economy, consumers respond to authenticity.

“It’s the reason someone buys a particular product or why someone chooses this course over another course,” he says. “It’s not just about cost or quality, but how much consumers perceive a course to be real.”
Bigger is no longer better, and the golf real estate industry must go through a period of retrenchment, producing lower-cost products that offer shared, memorable experiences. That is, if they move ahead at all, especially in Florida.

“There’s so much inventory and the cost structure is so high that I think it’s going to be 10 to 15 years before we see any major golf community development again,” predicts Whitney Crouse, founding partner of Affiniti Golf Partners, an Atlanta-based management firm that operates courses and clubs throughout the Southeast.

4. Courses must know who their customers are and deliver true value to them.
The financial damage inflicted by the current recession forced most Americans, regardless of their wealth, to reconsider their spending habits. Conspicuous consumption is out; value is in. And like most businesses, all courses—munis, daily fees, clubs, resorts—must provide plenty of value to their clients.

A one-size-fits-all approach no longer works. The golf team at Walt Disney World Resort, for example, knows that most guests have to bring strollers, car seats and other detritus that leave no room for golf clubs.

So any guest who stays on property and pays a full-price green fee at any of Disney’s five courses receives complimentary use of a Titleist or Cobra rental set—a $55 value.

Private clubs must think of their members as customers and provide enough value for their dues and fees. “In Florida, most clubs have an older clientele, so coordinating events and programs that remind them of yesteryear always resonates well,” says Erin Herzog Bisceglia, managing director of the Florida chapter of the Club Managers Association of America.  

For instance, “Turnback Tuesdays” have proven popular at the Club at Longshore Lake in Naples. The chef prepares comfort foods like meatloaf and pot roast, while music from the 1950s pipes through the dining room. “The members love it,” says Bisceglia. “It gives them an opportunity to relive their youth and be reminded of a time when life was simpler.”  

Eventually, a growing number of clubs in Florida and elsewhere may do well to follow the lead of courses in other parts of the country that have begun banding together. Last year, the semiprivate Olde Homestead Golf Club in New Tripoli, Pennsylvania, unveiled a promotion dubbed the “Preferred Golf Membership,” which provides unlimited access to five clubs in the area for a $1,495 annual fee.

5. Golf must reach out to new markets and embrace change.
Golf is justifiably proud of its rich heritage. But in order to grow, the industry must shed some long-standing notions of what the game entails.
“I think there’s a whole new generation that would play golf if they could wear jeans, backward hats and untucked shirts,” says Larry Hirsh, founder and president of Golf Property Analysts. “I’m not saying I’m a fan of that, but there may be a lot of people who just say, ‘Screw this, I don’t want to change my clothes or act differently.’ Maybe that’s good and maybe it’s bad, but it is discouraging a certain segment of today’s youth from golf.”

A way to reach other segments, including younger generations, is better communication. Many businesses have begun leveraging the power of social-networking media to connect with customers, yet golf has historically resisted technology and lags woefully behind other industries on these fronts.

In addition, courses can no longer rely on the core group of golfers, so they need to create a sense of excitement that extends beyond their usual pool of customers. Every resort offers packages and deals, and just issuing press releases and putting it on their Web sites are inadequate.
Last October, Innisbrook Resort and Golf Club created “National Mulligan Day,” a promotion in which any overnight guest who played one of Innisbrook’s four layouts could play the same course again for free that day.

The resort also offered non-golf promotions, including two-for-one “mulligan-tinis” at its bars, as well as spa, retail, driving range and tennis specials.

At face value, the package was fairly mundane. But the marketing was not. Innisbrook established a URL,, where visitors could vote on the sports figure most in need of a mulligan, from 1986 World Series goat Bill Buckner to Jean Van de Velde, the tragic figure of the 1999 British Open.

The resort leveraged the power of social media to generate additional buzz, encouraging people to share other mulligan-worthy incidents, sporting or otherwise, via Facebook and Twitter. The campaign was fun, engaging and memorable, standing out from the white noise of typical marketing efforts.

Finally, in Florida and elsewhere, golf needs to reach and retain traditionally underserved groups, including women, minorities and people with disabilities. Efforts like the First Tee and “Get Golf Ready in 5 Days,” the industry’s most recent initiative, have introduced the game to thousands. The problem is that there are just as many, if not more, people who put down the clubs as those who pick them up for the first time.

“You’ve got to have people that aspire to play the game but haven’t found a reason to do it,” says Troon Golf’s Hinton. “You have to match them up with golf partners so they can have a regular game. You have to go after women; you have to go after families; you have to go after minorities.

“That’s what we have to do and we have to keep doing it.”


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