There’s Often Some Rough Going in the Business of Golf
It looks like fun and sometimes it is. But owning and managing a golf course is also hard work, and there are challenges around every dogleg. Owners must contend with mounting competition, swings in the economy, and even the weatherman and the dreaded five-day forecast.
If Tim Kurty could do it all over again, he would probably change the name.
When some people hear Mill Valley Golf Links, they summon memories from a few decades ago, he said, when the always-picturesque course in Belchertown had only nine holes, was too short by most players standards, and was in pretty tough shape, primarily because previous ownership didnt invest in automatic watering equipment.
None of that is true anymore, said Kurty, a retired MassMutual employee who bought the facility nearly a decade ago with two partners and is now the sole owner. But a lot of people go with what they remember, and they only know the old Mill Valley.
Getting them to try the new version, which opened nine new holes in 2004, is one of many challenges facing Kurty, who is a proud member of a fairly unique fraternity entrepreneurs trying to make it in a changing, and in many ways more difficult, golf industry.
A lot of people say this is a dying sport, said Kurty, repeating an often-voiced opinion that the game does not resonate with younger generations, despite the presence of Tiger Woods, and that the future doesnt look as bright as the present or certainly the past. He doesnt agree with that sentiment, at least based on what he can see from his clubhouse porch. Indeed, Mill Valley, despite those perceptions he noted, remains a popular venue, especially among women and couples, who come to socialize as much as to play golf.
Still, this is a tough business, he acknowledged, one in which players meaning those owning the golf courses, not those playing them must be diligent about all the factors they can control, especially the applicable contributors to overhead, because there are many things they cant control, like diesel fuel prices or the state of the economy.
And dont forget about the weather or the daily forecasts of same.
Ted Perez Jr. gives the five-day forecast a prominent place on the list of challenges facing course owners, right there beside soaring insurance costs and a growing population of municipally owned courses that dont have the same expenses, or revenue pressures, as the privately owned tracks.
People like those five-day forecasts, said Perez, the pro at East Mountain Country Club, a course built by his father in the early 60s only a drive and a wedge from the main runway at Barnes Municipal Airport in Westfield. The problem is, the forecasters tend to play up the negative, even the slightest bit of it. If theres 30% chance of rain, that means theres a 70% chance that it wont. But what graphic do they use? the one of the cloud with rain coming out of it; people see that on Tuesday, and they change their plans for Saturday.
Paul Napolitan doesnt like the long-range forecasts, either, and he says the shorter-range variety can also cause trouble.
They kept saying it was going to rain yesterday, said Napolitan, co-owner with his brother, Tom, of St. Annes Country Club in Agawam, which was built by their father in 1963 on his familys farm. My office has all kinds of windows I kept looking out them, saying, wheres that rain? We never got a drop, and that happens all the time.
Despite those inaccurate forecasts, St. Annes has seen steady increases in rounds and revenues over the past several years. Napolitan attributes this to his ability to deliver value St. Annes has one of the lowest rates in the area and is in generally good condition and some imaginative steps that bring benefits to players and, especially, associate members.
Take his so-called points program, for example.
Members get points for each dollar they spend beyond their yearly dues, he explained. When they reach 200, theyve earned a free round, and at lower thresholds they can earn a sleeve of balls or other equipment.
Were innovative here we do a lot for our members, he said. You have to be creative today and really focus on customer service. Its not like the old days when you could wait for business to come to you; now, you have to earn their business.
In this issue, BusinessWest talks with some individuals who wont round up or down when talking about how many Saturdays were washouts last year they know exactly, and, fortunately, it wasnt a big number and who say that, while golf is a sport, its also a very competitive business, and in both cases, its not as easy as it looks.
Avoiding the Rough
Before talking with BusinessWest on the warm but misty Tuesday that Napolitan referenced (in fairness to the forecasters, it did rain a little in Belchertown), Kurty had just finished putting out yardage markers on several holes. These are white poles placed on the edges of the fairways to tell players when they are 200, 150, or 100 yards from the middle of the green. Earlier in the day, he rung up a few greens fees, sold a membership, took a beer delivery, and met with his insurance agent.
This, he said, is life for a golf course owner like himself, and it is a matter of necessity, not want.
People have to be able to do everything here, he explained, adding that it is not uncommon for those who mow the fairways to fill in behind the bar or in the kitchen if needed.
There is no counter in the pro shop at Mill Valley people get trapped behind a counter, said Kurty and one person will usually act as cashier, armed with a wireless credit-card swiper, starter (the individual charged with getting groups off in good order), and designated checker for coolers; courses lose money when players bring their own beer on the course, and there are strictly enforced rules forbidding such action.
Perez can relate to all this. On the day he spoke to BusinessWest, he opened the pro shop, as he always does, but also got a pot of coffee going in the snack bar area in preparation for a group of senior men heading out in about a half hour; its still early in the season, and the person handling the snack bar doesnt come in until 8:30 or so much later than she would in the middle of summer to reduce costs.
The ability to multi-task is just one skill that golf course owners and managers must possess, said Napolitan, adding that they must also be determined, imaginative, and responsive to the needs of customers.
These are all lessons he learned while growing up with the game and the business.
His father started with nine holes that he designed and built himself, and added a second nine in 1970. Napolitan said he handled every job there is on a golf course, starting when he was in grade school. I was a cart kid, I washed dishes I did everything.
Those experiences gave him an appreciation for how a staff has to work together efficiently to make an operation run profitably, he said, before returning to that word innovative to describe the approach he and his brother take at St. Annes.
Sometimes its little things, but important things, like our cart enclosures, he explained, referring to the devices that protect occupants from cold, wind, and rain. Things like that add up; overall, though, it comes down to having what every business must have a good product.
That adjective couldnt be applied to Mill Valley, or at least not to the course, said Kurty, when he and partners Silvia Bertolaccini, a former LPGA player; and Stan Kogut, the long-time course superintendent at Ludlow Country Club, acquired it.
So the three pumped some money into the layout and the clubhouse, with the goal of building upon a loyal membership base that existed despite the courses problems. The biggest investment came in the form of a second nine holes.
The partners acquired 150 acres from the Canadian National Railroad, then swapped that land for 54 acres closer to the original nine holes that were owned by the town. Kurty and Kogut, who passed away last year, designed a few of the new holes themselves, and also did some of the tree-clearing work while also handling the extensive permitting and red tape that accompany such an undertaking.
When you build a golf course, you get to meet a lot of people at the DEP, said Kurty, referring to the state Department of Environmental Protection. And you get to know them on a first-name basis.
The investments, totaling roughly $3 million, have paid off, said Kurty, noting that they have helped to stabilize and expand the membership base, while also (through the help of some aggressive marketing) bringing some new players to the course. Overall, the Mill Valley operation is at or near the break-even point financially, and with most of the hard work and major expenditures in the rear-view mirror, the future looks bright.
The course just has to mature some, noted Kurty, adding quickly, however, that he, like all course owners, must be diligent to control expenses, while making the venue attractive to a broad range of constituencies.
Going for the Green
Perez concurred. He said there was a time when the nickname Easy Mountain used to bother members of his family. It doesnt anymore.
The moniker has become part of the local golfing lexicon to connote that the layout is not as demanding as most others, primarily because its short and, for the most part, wide open. Some steps, such as the addition of a few new sand traps, have been taken over the years to make the course a little tougher, said Perez, but the Mountain, as its also called, will always be what his father intended it to be a place for working people of average golfing skills and it wont pretend to be anything else.
Nowhere on the scorecard does it say that this is a championship course, because its not, he said, adding that the track appeals to a broad range of players, including women, and this helps at a time when competition is mounting, the number of golfers remains relatively flat, costs are soaring, and courses like East Mountain simply cant pass on all those increases to the players in the form of higher greens fees.
Not when there are several municipal courses in the area that have lower fees, lower expenses, and even get grants from the Legislature, like the one given to the Ledges in South Hadley to build a new clubhouse.
They got a $260,000 grant they dont have to pay that back, said Perez in a voice displaying a sense of astonishment, as he referenced the Ledges, the still-struggling muni that opened a few years ago. Some legislators told us that municipal golf courses were long ago put in the category of parks and recreation. Well, its not recreation, its a business.
Its not a level playing field, he continued, referring, again, to the municipal tracks and some of the competitive advantages they enjoy. We put a big addition on our clubhouse years ago we got a grant, too; it was called a loan from the bank, and we had to pay ours back; banks are rather insistent about that.
While he tried, unsuccessfully, not to rant about municipally owned courses, Perez said they comprise just one of the challenges facing golf-course owners today. Overall, he said, there are still ample revenues for the courses in the area, but expenses are rising at an alarming rate, and facilities like his cant pass them on.
Using diesel fuel as an example, he said those skyrocketing costs touch everything from the equipment used on the course to the food served in the snack bar. Meanwhile, other costs, from labor to insurance, are also soaring.
Our insurance bill this year is $149,000, he said. Just 12 or 15 years ago, it was more like $50,000. Many of our expenses are moving in that same direction, so you have to get as many rounds as you can.
Thus, East Mountain opens early in the season and stays open late it has developed a reputation as a course one can play when others are closed but sometimes Mother Nature prevails, such as this past winter.
We closed last December 3rd, and didnt open again until March 14th, said Perez, adding that he doesnt have to check those dates theyre etched in his memory. In the winter of 06 and 07, we were closed for seven weeks total; this past winter it was three and a half months. Things have a way of balancing out, but its hard when you have no control over things.
To survive and thrive in this environment, said Kurty, privately owned courses have to do whatever is necessary to control overhead, while also being creative in developing new revenue streams and creating new customers.
As an example, he pointed to the two large card tables that were still occupying the pro shop in early April. They were used for Texas hold em events on Friday nights during the winter, one of the many steps taken to keep revenues coming in during the long offseason.
Kurty went as far as to describe Mill Valley as a great sports bar with a golf course wrapped around it. Elaborating, he cited events such as regular summer clambakes; for $45, participants can play a round of golf and eat lobster and clams.
Napolitan told BusinessWest that the focus on customer service at St. Annes has yielded strong results. The club now boasts 600 members and has been averaging nearly 50,000 rounds per year, which is about the max.
We peaked in 2005 it was so crowded we couldnt get people out, he said, adding that volume has decreased only slightly, and he believes the future is looking good for his club and the industry in general.
I think golf is picking up, and Tiger Woods has certainly had something to do with that hes bringing people into the game, he said. Overall, this is still a fun business. I love it; its great coming to work every day.
Perez wouldnt go that far.
This used to be fun, and a lot easier if you had a course in the 90s and it wasnt making money, something was wrong, he said. Now, its a lot harder.
Perez told BusinessWest that his now-semi-retired father still jokes about one of the things he would do if he could do it all over again.
He said he would have bought up all the radio stations in the area, said Perez, and for the weather forecasts, every day they would say sunny and in the 80s.
That would have eliminated just one of the challenges facing golf course owners, and there are plenty more, as Perez and others noted.
This is a realm the Legislature may consider parks and recreation, but it is really a business one in which adversity as well as storm clouds (real and proverbial) are par for the course.v
George OBrien can be reached at[email protected]