Golf courses struggle to regain footing
Photo/Amber Waterman
Jim Day, co-owner of Martindale Country Club in Auburn, says converting the club to semi-private status has opened up a new income stream
Jim Day and his business partner, Nick Glicos, expect they will make the Martindale Country Club in Auburn profitable again despite the ongoing recession and excessive rainy weather that has plagued the sport for the past two golf seasons.
The pair purchased the golf club for $1.83 million in the fall 2009, the same year the city assessed its value at $2.4 million. Besides getting a deal, the new owners converted the formerly private club into semi-private status, opening it to walk-on golfers. Day says the change allows the club to rely on members for steady revenue and capture some walk-on greens fees from casual golfers, without denying private club members their desired weekend morning tee times.
He sees the change as a way to “open up another avenue of income to get over that hump” created by previous owners who failed to generate enough revenue solely from golf club memberships. Day says he and Glicos hope to generate 4,000 to 5,000 rounds annually from walk-on golfers, which would comprise 20% to 25% of the country club’s total golf revenue.
That kind of thinking is on the rise as golf course owners around the state struggle to make up losses of the last two years and position themselves to attract new customers. Others are throwing in the towel, frustrated by the weather and a reluctance by recession-strapped golfers to spend money on greens fees.
At least a half dozen of Maine’s 140 nine-hole and 18-hole golf courses are for sale at less than their previous market value. For example, Savings Bank of Maine in Gardiner assumed through foreclosure the 117-acre Bath Country Club for $1.95 million from BCC Holdings in March and tried to auction it off in April, but could not attract any bidders. The bank intends to sell the Bath facility on the open market, once it establishes a listing price, expected by the end of May. The course continues to be managed by BCC Holdings, which originally purchased it from Harris Golf for $3.4 million in 2006.
Mark Koshliek, an associate broker with Maine Business Brokers in Portland, says they are trying to sell a nine-hole Saco golf course for $1.5 million. He says the weather, which brought an unprecedented 60 days of rain in June and July in 2009 during the height of the golf season, proved too much for some golf course owners who rely heavily on walk-on golfers’ greens fees.
“You can’t make up the revenue,” he says.
But investors who are willing to take a leap of faith that Maine will have less rain this summer can enjoy a buyers’ market. One of them, Harris Golf of Bath, purchased the Falmouth Country Club earlier this year and recently leased the Highland Greens Golf Club in Topsham. Harris Golf now owns and operates eight golf clubs, including Sunday River Golf Club in Newry, the Penobscot Valley Country Club in Orono and the Freeport Country Club. The company also built the state’s last new golf course, the Old Marsh Country Club in Wells, for $8.5 million in 2008.
“We believe in that old saying, ‘a pessimist sees the adversity in every opportunity — an optimist sees the opportunity in every adversity.’ We’re optimists,” wrote Jeff Harris, owner of Harris Golf, in an e-mail.
Harris says his company managed to weather last year’s soggy season by heavily promoting their early-season, pre-purchase passes in April and May, which gave the company some strong cash flow. Owning multiple golf courses gives his company more revenue options, says Harris, who would not disclose the company’s sales figures or discuss the number of rounds played at its courses.
“With the early start we had to the season and as long as the weather cooperates, we could certainly break through 2008’s numbers, which was a record year for round counts in our operation,” Harris wrote.
Hitting out of the rough
Pete Webber, executive director of the Golf Maine Association in Scarborough, says more of Maine’s golf clubs need to use a fresh approach to reach today’s golfers.
He says some golf clubs, such as Point Sebago Golf Club, are using social networking tools such as Facebook to offer casual golfers great deals. This month they offered 18 holes of golf with a cart for $25 Monday to Thursday or $35 from Friday to Sunday until May 23.
By offering such deals, Webber says courses can retain their weekend golfers and capture additional revenue by appealing to casual golfers who may only play when the price is right and the weather is perfect.
The Sugarloaf Golf Club and the Belgrade Lakes Country Club also offered a $99 deal that allows golfers to play both courses. Golfers can play 18 holes at Belgrade with a cart from opening day to June 30 and then play 18 holes at Sugarloaf from July 3 until the end of the season.
Day says Martindale has 275 members this season, which he hopes to increase to 325 next year. To encourage that, membership fees dropped about 25% for single members, from $2,499 to $1,899 per season, and family memberships decreased by the same percentage, from $3,799 to $2,899 per season.
Webber says golf courses need to market themselves to whole families the way ski areas have so they can grow their business. But that can be a challenge because novices will slow down the pace of play for experienced golfers.
“Customer service is going to be more important than ever,” he says.
Business as usual won’t make financial par at traditional golf courses. Webber says they need to embrace technology; some golf clubs in Maine don’t even use e-mail to reach prospective golfers.
“They need to reach golfers in a way that golfers want.”
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