According to the National Golf Foundation, third-party golf course management companies continue to exert a growing influence on the industry.
The NGF reported that in 2006 the number of golf courses in the United States working with third-party golf course management companies amounted to 10.6 percent. By the later part of the second decade of the 2000’s it was up to almost 16 percent and trending upwards. The figure was estimated by some in the industry to surpass 20 percent of all golf course facilities by 2021, said the report.
The NGF said there were more than 230 companies with at least two golf course facilities under management and 76 percent of those manage less than five facilities. Together, these businesses have in excess of 2,130 properties under management, including 10 companies with 40 or more courses in their portfolio.
Changing Golfer Expectations and Buying Power
The reason for this trend? Changing expectations from consumers and simple economics said the NGF’s study. Independent owners of a single course face a lack of buying power, which is something third-party golf course management companies, with their portfolio of courses, can provide, along with enhanced marketing (i.e. social media savvy), more in-house resources to run operations, and state-of-the-art technology that many courses may be woefully lacking.
Third-party golf course management companies can provide a depth of expertise in such vital areas as agronomy, front-of-the-house operation, food and beverage, digital marketing, accounting, and human resources, said the study.
The Golf Course Trades magazine recently chatted with Doug Hellman, president of business development for Bobby Jones Links, to get his take on when courses and clubs need to consider hiring a third-party firm to manage their operations and what third-party golf course management companies can bring to the table.
Course Owners Often Know When They Are in Trouble
“Many golf course owners just know it,” said Hellman as to when should a third party be brought in to manage all or part of their operations. “They feel they are losing ground. At some point, most owners realize they are not keeping up and they may be so far into the weeds they can’t see their way out.” Then Hellman’s phone rings.
Hellman said he has heard “many times” that a club’s members, who are also serving on a club’s board of directors and at least tangentially involved in the operational process, can’t enjoy member benefits “as much as they would like to”. And that, he adds, is a big red flag saying that a storm is quickly approaching or may actually be over the club. Hellman also said a course may be suffering financial distress because it is not being maintained properly and golfers may be opting out as members or daily fee customers.
“When a golf course superintendent isn’t provided with the proper resources in manpower, equipment, and supplies because of budget restraints, courses begin to suffer. First, it’s the landscaping, then the fairways, then the tee boxes, and then the greens.” Poor golf course conditions are an indication that whatever a club is doing operationally isn’t working.
A Period of Review and Analysis
When Bobby Jones Links is called in to consider managing a club or course, the firm conducts a 30- to 90-day period of review and analysis where all aspects of the potential client’s operation are studied, said Hellman.
“It’s really about understanding why the course or club is not operating at peak efficiency. We do a lot more listening than talking during the initial phase of the process. The focus is on understanding why the club or course is having problems, and we find out what is working and what is not and why.”
Hellman said, “unfortunately”, there are times when ownership perhaps has waited too long to seek outside help. “We have gone in and said to some club and course owners they waited too long and the situation is too far gone. They may have deferred capital improvements, lost their course to a large degree, and the customers or members have left. Now, if there is a willingness to make an investment in money, time, and resources and the ownership is really committed to that approach then we can help. But we don’t have magic fairy dust or a magic wand and can make problems disappear without those commitments from ownership. We always are forthright and honest with our potential clients upfront.”
The role of golf course management has evolved and running a daily fee or private golf course is a complicated, multi-faceted endeavor as consumer expectations have changed, said Hellman.
Course Owners Seek Knowledge and Expertise
“The bandwidth of knowledge and expertise Bobby Jones Links has is enormous and our goal is to work hand in hand with clients to solve any problems they have. In terms of, say, agronomy, one of the major benefits we have is a great amount of buying power because of our size and relationships we have developed within the industry as it applies to the purchase of equipment, chemicals, and fertilizers.”
Hellman said when Bobby Jones Links enters into a third-party golf course management agreement with a club or course there has to be a “mutual understanding” that the client needs to have a commitment to improve their operation by taking the lead from the company’s best practices and staff training and make the necessary investments. “If our goals are aligned, then we can have a productive partnership that will result in renewed or enhanced financial status, course conditions, pro shop and food and beverage operations, and customer satisfaction.”
The influence of third-party golf course management companies in the golf course industry appears to be a trend that will only increase, given challenging economic times, changing consumer expectations, the need for savvy social media, and technology in marketing, and the various assets these firms bring to the table.
John Torsiello is an award-winning journalist who writes for a number of national, regional, and local golf publications. He is an avid golfer as well.