Golf business finds this a summer of bogeys

Some private clubs have relaxed membership requirements to woo prospects, with payment of initiation fees delayed or reduced. Some courses have cut greens fees.

But cost-conscious families, many affected by the economic downturn, still aren't readily stroking checks to join clubs whose memberships can easily run to $25,000 with some above $50,000, in addition to monthly dues and food and beverage charges.

"Business golf" is down, too, with executive perks trimmed and employees spending more time in the office. This summer's  extreme heat, on top of last winter's endless rain, hasn't helped.

"When I go to a club managers meeting, the guy who says everything's great is lying," said Bill Wagner, general manager of Hawks Ridge Golf Club, a private course  in Ball Ground.

"We have been in a downturn for the last three years at least," said Mike Waldron, executive director of the Georgia State Golf Association, whose members include 121 courses in a 16-county metro Atlanta area. Membership, he said, has fallen 3 to 4 percent in each of the last three years, and Waldron observed, "Golf is a recreation, not a necessity, and during the recession it seems some people have just put the clubs away for a while."

Waldron said that as far as the fate of area courses, "The critical issue is how long some clubs can stay in business during the economic downturn. The clubs and courses that can continue to provide a quality experience for the golfer at a fair price, not necessarily a low price,  are the ones that will remain viable in the long run ..."

Wagner said that because courses are "not doing the volume you were two or three years ago, we've all had to get leaner and meaner."

That's not easy given the high cost of maintaining delicate courses (perhaps $1 million a year) and, in some cases, the need to pay down debt taken out to build the course.

Local golf industry executives say that newer courses tied to expensive real estate developments are more exposed now because the demand for the pricey homes adjacent to the courses fell off with the economy. That left developers without the expected cash flow from home sales to cover their debt payments.

Joe Guerra, CEO of Canongate Golf, estimated that about two dozen of Metro Atlanta's courses are in financial straits, the result of some combination of poor location, bad design, debt and a poor price-to-value ratio for customers. The problem was fueled by a golf course building boom during more prosperous years.

Canongate, which has a network of 23  clubs with 26 courses in the Atlanta area and other courses elsewhere, is headed to a relatively stable year locally with business off only about 5 percent despite the economy and weather, Guerra said.

The company clusters courses in densely populated areas. It  spreads expenses over multiple properties while offering reciprocal playing benefits at a total cost well below that of traditional private clubs. The firm is looking for courses to buy, Guerra said, as the industry is ripe for consolidation.

"There are very few clubs that have prospered in the last two years. The stress in the golf industry and the country club industry is endemic of what's happening in the economy in general," said William Shiver, vice president of  the Hodges Ward Elliott Golf Division, a brokerage in Atlanta.

Clubs in the best shape to make it are those known as legacy clubs, with deep and affluent membership bases, and those offering a quality golf experience at a reasonable price.

"The golf industry is in flux and suffering quite a bit. It's heavily tied to the housing industry, especially in metro Atlanta," said Megan Stuckey, of Affiniti Golf Partners, which owns or manages 11 courses including the renamed Heritage Golf Links in Tucker.  Affiniti, she said, has improved the course and cut fees to boost business at the club which is still bank-owned.

Stuckey said the number of golfers who play regularly and often has not kept pace with the number of courses opened. The result: too much supply, not enough demand.

For now, clubs are doing what they can to retain members and attract new ones.

Pinetree Country Club in Kennesaw is touting the private club experience, which includes no tee time requirements, personal service, a top-flight course and a full social scene and athletic facilities for members and families.

"You feel taken care of. You feel a little more privileged," said Barbara Jodoin, Pinetree's general manager.

To attract members, the club made an introductory offer to prospects in which they would be required only to pay monthly dues for a  six-month trial period.

"We were trying to find ways to get them into the club life and see what we have to offer,"  she said.

Gary Dee, executive vice president of Heritage Golf Group, which owns courses  including Atlanta National Golf Club, Polo Golf & Country Club and White Columns Country Club in metro Atlanta, called the current environment "challenging."

He said his clubs lowered their initiation fee for new referred members and the members at each club responded to support the club and make the program successful.

"We're confident we'll get through this cycle just like we have before," he said.

The  GSGA's Waldron also sees a better future. "We don't believe (golfers) have quit playing altogether or that they have forgotten how to play," he said. "They will come back to play when times are better."