At the recent Golf
Inc. Conference at the Camelback Inn & Resort in Scottsdale,
Ariz., Jeff Silverstein, president of I.R.I. Golf Group, offered some
blunt opinions about how the standard operating model for many
courses is making it difficult for them to control costs.
Here are some of
the things Silverstein had to say about this critical issue:
"I think it's
time that the owners of golf courses start taking responsibility for
the fact that the associations and the employees that are working at
our golf courses have actually taken a stronghold in the industry.
The Golf Course Superintendents Association [of America], the USGA as
an advisor to our clubs [and] the PGA of America have set standards
that the owners have allowed to be set, that have created an
expectation from our customer base, that has made, in most cases, the
viability and the investment in golf, not very strong.
"In a place
like Arizona where your water costs are rising significantly, and
your labor costs, your fertilizer costs, are going up, you need to
start taking a look at alternative ways to run your facilities. Do
you need an $85,000 head professional in your golf shop? Do you need
a Class A certified superintendent? Do you need to have fertilizer
put down four times a year? You need to take a look at all of those
things.
"If we're
going to survive as an industry, we're going to have to stop doing
things status quo, because too many golf courses have been built that
shouldn't have been built and too many golf courses have been
purchased for economic reasons that are different than just the
operation of that golf course.
"Back in the
late '70s and early '80s, when we operated golf courses, our
average operating margin at a public golf course was north of 42
percent. Over 50 percent of our portfolio had a 51 percent net
operating percentage. We're now in the low 30s. We only have one
part of our portfolio that's still in the 40s, in North Carolina.
Here in Arizona, we're lucky to be in the high 20s.
"If that
continues, the viability of owning these golf courses is not going to
be something that we all want to have and the game of golf will be
threatened by it. I think we need to all take a look at how we go
about operating these golf courses so that we can grow the game of
golf and make it a good business."
Responding to
those concerns, PGA of America Chief Executive Officer Joe Steranka
presented a differing point of view as he discussed his own
presentation at the conference.
I noted in
our panel discussion that in tough times there are two distinct
strategies: cut costs to address shrinking margins or realign costs
and priorities to invest in growing your business. There were a few
industry executives who espoused the former and pointed critically at
golf course management staff, be they PGA professionals or GCSAA
superintendents. The criticism suggested professionals are out of
touch with contemporary customers and course needs.
Nothing could
be further from the truth.
I discussed
the second strategy of aligning costs to reinvest in the business of
golf, starting with the key employees that drive any business -- PGA
professionals. I pointed out the value of flying the PGA flag at a
facility as a point of differentiation in these challenging times.
The PGA of America is focused on supporting PGA members at their
facilities with education, employer, marketing and research services
(our four building blocks). We are investing millions of dollars
annually in these services and see ourselves as the HR resource
for the employers in the industry. We know we have golf
professionals for every type of facility and skill set required.
I also
urged collaboration or "co-opetition" as important in
these challenging times. With an industry as big as golf, even the
PGA can't go it alone. Our industry must use collaboration and/or
co-opetition to reduce redundancy of operations and spending or to
exploit joint opportunities. I referenced PerformanceTrak as an
example of reducing redundancy and Play Golf America as a joint
opportunity to be exploited. I cited PerformanceTrak data that showed
year to date rounds level and revenue slightly up at PGA facilities
reporting their numbers through August. The PGA's work with the
Golf Course Superintendents Association of American and Club Managers
Association of America is paying dividends in improving the level of
shared information and communication at the national, regional and
local course level.
I believe
wholeheartedly that in these challenging times, the best strategy is
to invest in our future. The PGA of America's $3 million investment
in member education, our expanded employer services, our developing
junior collaboration with the USGA and increased investment on golf
instruction research will prepare PGA professionals even better for
the future. Education which incorporates the latest best practices
will lead to better operating performances, more programs geared to
show amateur golfers how to improve their ball striking will
lead to more participation, and junior golf shares the healthy
qualities of the game with our nation's youth and is a proven
long term player development program.
What's your
opinion? What do you think is the best way to start controlling
costs? Which business model works best for you?
Comments
The PGA needs to
I believe that clubs that
As a class A superintendent,
Mr. Silverstein's comments
There are a number of issues
We are experiencing a
Mr Silversteins comments are
While being a consultant to
I entered the golf industry
We in the golf industry have
“Broad Brush” I found
I have been in the golf
I take great offense to Mr.
I have a great idea for Jeff
I did a little research on
Had these comments come from
I have unfortunately worked
Golf professionals and
For all the golf pros out
Bringing this back to the
Having been a Class A,
Key staff (qualified
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