By Steve Eubanks
Remaining committed to your core mission can be a boon for business
Al Geiberger won a major, the PGA Championship in 1966, and racked up 10 other PGA Tour and 10 Champions Tour victories, as well as an impressive 5-3-1 record in the Ryder Cup. But most people in golf don’t know any of that. To the majority of fans, Geiberger will only be known for one thing: the second round of the 1977 Danny Thomas Memphis Classic. That’s when he became golf’s Roger Bannister, breaking the game’s four-minute mile by becoming the first player in history to shoot 59 in a professional event.
Now, at age 74, Geiberger is a sage of the game in the California desert, a go-to guru for all things golf—business and pleasure—throughout the Coachella Valley. From his current position as Ambassador of Golf for PGA West and La Quinta Resort, he has become a keen observer of trends in the game. And on that front, he has noticed a pattern in the successes and failures of golf operations in Palm Springs.
“The privately owned public courses in this area are doing OK because they’re the ones that stay close to the golfers,” Geiberger explains. “They understand what they do well, and they stick to that. You don’t see those courses changing midstream and trying to become something they’re not.”
Geiberger includes the five resort courses at La Quinta as part of that group, even though the property has gone through its share of troubles. “It would have been easy for these guys to change and go an entirely different direction, especially after going into receivership,” he notes. “But you can’t abandon a brand that has built up a good reputation. Once that’s gone, it’s gone for good.”
This succinct analysis sums up the dilemma facing many clubs today. Whether it’s a private club in need of revenue that opens some afternoon times to the general public (the kiss of death for future membership sales) or an upscale public facility that runs a half-price coupon in the local paper to compete with the discounters, too many golf operators are abandoning their identities, moving away from what they do best and what they’re known for in their markets. As a result, many are harming their brands and, perhaps, destroying their long-term viability for short-term gains.
Sea Island, the exclusive Georgia enclave that was a haven for well-heeled Southerners for most of the 20th century, is a prime example. After a well-publicized bankruptcy, Sea Island Resort ran special packages last year that were half the previous rack rate and included two rounds of golf. They even had a “stay two nights, get the third night free” special, a style of coupon-like discounting that’s completely out of character for one of the country’s preeminent destinations.
Perhaps Sea Island didn’t have a choice; regardless, they no longer have a crown-jewel reputation, either. The value of their golf is equal to the lowest price people remember. For some resorts, that might not be a problem, but Sea Island’s stock in trade had always been its cachet and grandeur. With one seemingly harmless discount promotion, the resort undid much of the branding it had built up since 1930. The new management went away from what had defined Sea Island for decades and, as a result, the tradition and identity of the place has been lost.
Consider, on the other hand, Pelican Hill Resort in Newport Beach, California, a high-end facility with two Tom Fazio courses that opened in 2008, just as the financial crisis was shaking the golf industry to its core. It would have been easy for the club’s management to shift gears. The doors were barely open, and with the collapse of the housing market and institutions like Lehman Brothers and Wachovia Bank vanishing overnight, the whole world seemed to be on shaky footing. But rather than alter the mission statement, vice president of golf Steve Friedlander, an eight-year veteran of the Kohler Resorts who had also worked at Doral, stuck to the business plan and refused to change the things he knew would separate Pelican Hill from the competition.
“I won’t compromise the brand, nor would I consider getting into a price war,” Friedlander says. “Doing that does nothing but attract a clientele that’s motivated by rate. Those people are not loyal to you or your brand. And we believe in rewarding loyalty by being loyal.”
True to that ideal, Pelican Hill offers two annual membership packages that are on the extreme high end of the industry. The first goes for $22,000 a year per couple, which provides access to both golf courses. The other is priced at $10,500 per person for one golf course. Both packages require the prospective member to be interviewed by Friedlander, and they’re limited to 100 members.
“They sold out in 30 days, and we have a waiting list,” Friedlander notes. “When people ask me how long the waiting list is, I will only say that if every one of our existing members went away, I could replace them and still have a waiting list.”
Meanwhile, Pelican Hill has been able to maintain its $270 per-round rack rate because Friedlander is “willing to risk unsold inventory to protect the integrity of our brand.” That brand includes a golf course that is in consistently excellent condition, with service touches that separate the club within its market.
“No one thinks about sending out a range ball that appears anything less than brand new,” Friedlander says. “And every golf car that goes out looks like it’s been freshly detailed or come straight out of the showroom.” Because of these types of details and the commitment management has made to preserve the brand, Pelican Hill has seen consistent double-digit growth every year it has been open.
Other high-end operations have stuck to their guns (and their pricing) and experienced similar success. The Kohler properties continue to thrive with a reputation as one of the finest resorts in the world. And Pebble Beach Golf Links was completely sold out—every single tee time—from Christmas through Valentine’s Day at an average total yield of $1,000 per round.
Fortunately, sticking to what you do best isn’t a concept reserved exclusively for the most elite clubs and resorts. Tim Reinke, manager of Pinecrest Golf Club in Idaho Falls, has persevered through the current discounting craze by remaining true to his niche. Pinecrest features a standard $21 green fee and a number of “punch pass” programs.
“We work very closely with the leagues,” Reinke says. “That’s what we’re known for, and that’s what we make sure we do well. By remaining dedicated to our most dedicated customer, we’ve been pretty immune from the downturn the rest of the industry has seen.”
Continued customer touches, and doubling down on the things you do well, are sure-fire winners regardless of the size or scope of your operation. As Reinke notes, the economy has taken a toll on everyone—customers included—but it’s crucial to “hold the line and keep providing the service to them that they’ve come to expect. As long as you do that, and stick to what you do best, you should be able to ride out the rough times.”
According to Jerry Breaux, a fellow Idahoan who operates Banbury Golf Club, Tamarack Resort and Teton Springs Golf Club, remaining true to yourself is a strategy that resonates with the paying public as well.
“The customer can see when you’re trying,” says Breaux, who experienced a slight uptick in rounds and revenues in 2011, and sees his trend lines moving in the right direction going forward. “We continue to touch our customers every two weeks with e-mails. I send out 9,800 e-mails twice a month, [in which] we’re very open about what we’re doing and what we hope the golfers will do in return.”
For instance, Breaux prides himself on the mentoring programs his clubs offer for juniors, and he’s committed to doing them better than anyone. That’s one area of his operation where Breaux refuses to cut corners, no matter how tough the times. “We have kids lined up on the range as part of that program,” he says. “Even in the winter, we turn the lights on, scrape the snow off the mats, and they’re out there hitting away. There are some things that you just do.”
Doing things a certain way, of course, doesn’t mean you should be completely resistant to tweaking your approach to the game or the business. As Geiberger notes, “Everybody has to change some things.” To illustrate his point, Mr. 59 offers the example of a private club in Palm Desert in which the average age of the membership is 73. “You wouldn’t find a junior golfer out there no matter what,” he notes. But what does that say for the club’s prospects in, say, 10 years?
“That’s a club that needs to change its thinking,” Geiberger says. “But they don’t need to totally change who they are. They’re an established private club with good amenities, good location and great weather. They don’t need to become a public course. They just need to soften the edges a little so they have a future.”
In a sense, the best approach may be to mirror what could be viewed as a solid approach to life in general. “We all need to change a little,” says Geiberger with a laugh, “but we have to stay true to who we are.”
Steve Eubanks is an Atlanta-based freelance writer and frequent contributor to Golf Business.