For the first time in several years, there wasn’t a significant drop in golf rounds played on the Grand Strand in 2010, according to statistics compiled by marketing cooperative Myrtle Beach Golf Holiday based on a $1.50 per-round transaction fee.
But that doesn’t mean golf course revenues didn’t fall last year.
A challenging economy and pricing competition within the Strand golf market kept the essentially flat number of rounds played in 2010 compared to 2009 from boosting coffers. “There isn’t any business that hasn’t been challenged with [the economy], especially when it’s an industry that is totally discretionary income,” said Jim Woodring, vice president of golf operations and marketing for Myrtle Beach National Co., which operates 14 courses and also markets for the TPC of Myrtle Beach.
“It was a challenge. We had to be creative. We all lost a little revenue and had to come up with new ways to get golfers here. But Myrtle Beach did a good job of doing that and I’d say we did better than other golf destinations out there.”
Golf Holiday reported its transaction fee showed rounds played on the Strand’s nearly 100 public courses in 2010 were down 1.86 percent compared to 2009.
Rounds had fallen nearly 12.5 percent in 2009 compared to 2008, and that followed an 8.4 percent decrease in ’08 compared to 2007.
For the first time in several years, Strand rounds were down less than the national average, which most destinations will lag behind during an economic downturn because of a decrease in travel. Rounds were down 2.3 percent nationally in 2010 according to annual research conducted by the National Golf Foundation.
“I believe Myrtle Beach is doing better than other destinations,” Golf Holiday president Bill Golden said. “I believe destinations are off more than [2.3 percent] because they get hit harder.”
Rounds were up approximately 5.5 percent in the busy and profitable months of March and April, and were up between 1.5 and 2.3 percent in October and November.
Rounds were down at least 12 percent in January, February and December, when unusually cold temperatures kept golfers off the links.
The extreme winter weather has had course operators seemingly starting from behind in the past two years. Golden said rounds were down 13 percent last month compared to January 2010.
“It’s hard to make money in golf when the courses are closed,” Golden said. “We had a particularly brutal January in 2010 and I didn’t think we could have a worse January in 2011, but it seems like we’ve come close, and December was particularly bad as well. We certainly haven’t caught a break these past couple of months with weather. … Luckily they’re the months with the fewest rounds.”
Despite decreases in total rounds played on the Grand Strand in the mid-2000s, individual courses prospered. Each got a larger percentage of total play because 20 courses closed in the Myrtle Beach market – stretching from Georgetown to Southport, N.C. – from 2005 through early 2007, and the increased demand per course allowed them to increase rates through 2008.
But the significant drop in paid rounds in 2008 and 2009, combined with the lack of course closures since ’07, has resulted in more affordable golf for consumers and dwindling profits for courses.
“The rate is what you put in the bank and that’s what you pay your bills on,” Woodring said. “It’s now the question of what kind of offers you give to people to get them to play, and maybe stay and play a little longer.”
Courses have dropped green fees as golfers have become more frugal and selective in a tough economy with high unemployment, high foreclosure rates and diminishing real estate values.
“The downturn has people thinking very differently about the way they spend money and obviously golf is not at the top of the list of things they’ll spend their discretionary income on,” said Tommy Smothers, general manager of Classic Golf Group, which manages four Strand courses. “[The golf business in 2010] wasn’t terrible, but we certainly don’t want it to get any worse.”
Arnold Palmer Golf Management, which operates the former Legends Group’s five courses, was a catalyst of the low pricing in the market with specials that included 18 holes, a cart, breakfast, lunch and two drinks for as low as $30. Other courses employed competing specials and the deals proliferated.
“It was a very competitive marketplace in Myrtle Beach trying to fight for the rounds that we did get,” Smothers said. “Obviously pricing is a major factor in fighting for those rounds, and Classic Golf Group tried to hold its price as long as we could.”
Many in the industry say early bookings for the spring golf season are up over last year’s numbers, and Golden said that will have to continue in order to re-establish higher greens fees and profits.
“We’re seeing an increased amount of [online] traffic, we’re seeing an increased amount of quoting, we’re seeing some optimism there, and we can’t lose a single golfer. There’s no margin for error,” Golden said.
“We need to restore demand and we need to increase rounds in the marketplace, and that will help with price stability. If there is a silver lining it’s that the [rounds in the] market stabilized.”
Golden credits an increase in direct flights to Myrtle Beach in recent years, and marketing programs built around those flights in the originating cities, for the rounds stability and increasing interest. Direct flights are available from more than 20 cities – primarily northern cities that traditionally attract golfers – on airlines including U.S. Air, Delta, Continental, Spirit, Myrtle Beach Direct Air, Allegiant and Porter Air.
“As you look back at 2010 I think the market stabilized, we’ve got a lot of marketing momentum out in the marketplace, and we’ve got air service,” Golden said. “The seats we’ve added these past couple years are really going to start paying off now as the economy begins to warm up in the coming years.”
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