Musing: Golf, business relationships & failure
Ranking: Vancouver's Most Prestigious Courses
Sorrow: A Tour of B.C.'s Crumbling Resorts
Video: A Dictionary of Weird Golf Slang
But how are things closer to home in B.C.? That depends on where in B.C. is home. In the Interior, and especially along the Rockies, the situation is, well, rocky. On Vancouver Island the outlook is cloudy but improving. And in Metro Vancouver, the great golf depression was barely even felt. In all regions, operators look forward in 2010 to what they hope will be a magic combination of a revived economy, a post-Olympic tourism bounce and continued brilliant weather. At the same time, they are taking steps to guard against another, less-welcome combination that could include a post-Olympic hangover locally, lower-cost competition internationally and the ongoing issues of rising costs and dropping revenues. And the strategies they adopt to cope could be dramatic enough to affect the everyday golfer.
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The battle to balance the ledger books – and even, in some cases, to keep the courses open – will be most intense in the Interior. There, well over a dozen expensive new 18s have come on stream in the past half decade, most tied to real estate developments geared in large part to vacationing or migrating Albertans. “The Invermere area has been the hardest hit,” says Marshall MacLeod, senior sales associate at CB Richard Ellis in Vancouver, which currently has two B.C. golf course resort developments listed and in 2009 attempted to sell the Fairmont Hot Springs golf resort before pulling it off the market. All through the east Kootenays, planned developments geared to an expected influx of rich Albertans are being scaled back, slowed down or reorganized.
The Rise, in Vernon, is perhaps the poster child for the over-the-top golf-residential megaprojects that developers have launched since the turn of the century, with its Gene Bates-designed (and Fred Couples-signed-off-on) mountaintop golf course, its vineyard and winery, its beach club, its Tuscan-themed design, its planned resort hotel, and its capacity for some 1,200 residential units on 300 hectares. Who could have been surprised when in late 2008, after credit markets crashed, developer Okanagan Hills Development Corp. was forced to seek protection under the Companies’ Creditors Arrangement Act?
Yet things did not go so badly in 2009, points out MacLeod. The development was completed despite the developer’s financial straits, and while trustees continue to seek a buyer to take over from Okanagan Hills, “The Rise did extremely well last year with $5.5 million in real estate sales,” he says. Multiple offers are currently being considered for the development, and MacLeod expects one of them to complete this spring for an amount in line with a 2009 assessed value of $124 million.
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Elsewhere in the Interior, there’s an undeniable glut of residential real estate, which will continue to dampen the property sales that almost every course constructed in the past 20 years depends upon. The situation was further muddied in 2009 by a cold winter and late spring that not only cut into the golf season but left many courses in poor shape. By contrast, many courses in the Okanagan, and even the Kamloops area, were able to open before the end of February this year. And as always, local considerations sometimes trump the overall picture. In the west Kootenays, where a revived Teck Resources Ltd. will have to hire some 700 workers to replace its aging workforce in Trail, cosy Redstone Resort in nearby Rossland closed on 10 lots in 2009.
If the Interior generally struggled through its 2009 round, Vancouver Island completed the 18 well enough that it could still contend in 2010 – despite some high-profile imbroglios and collapses. Victoria-area Bear Mountain Resort had an extraordinary year in 2009, with property sales of nearly $100 million. However, it wasn’t enough to stave off court protection from creditors in March this year. And just over the Malahat at Duncan, the long-running saga of Cliffs Over Maple Bay appeared to be entering a new phase with the expected spring completion of a sale to Vancouver-based Salish Park Holdings Ltd. Salish president Dana Carroll believes the development will benefit from some of the same local factors that Redstone has, though on a necessarily larger scale. The area appeals to sailing and food and wine aficionados and draws most of its buyers from the healthy Vancouver market and from Alberta, he says. “There is limited product and lots of demand.”
Farther up the island’s east coast at Union Bay, one of the province’s most eagerly anticipated courses also received what appears to be good news when in December, after 11 years of contentious debate, the proposed 320-hectare Kensington Coastal Point development and its half-built links-style golf course received third reading (admittedly for the fourth time) by the Comox Valley Regional District.
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Like Vancouver Island, the Lower Mainland benefited from almost ideal weather during much of 2009 and again over the winter. It remains something of a mystery why no enterprising TV crew visited a course such as Capilano Golf and Country Club in West Vancouver during the Olympics: surely a shot showing green grass, blossoming trees and short-sleeved golfers in the foreground with slushy Cypress Mountain looming beyond would have encapsulated the reality of the “Spring Games.” During January alone, the City of Vancouver’s Fraserview course hosted a record 3,000 rounds, says Howard Norman, director of golf operations at the Vancouver Parks Board.
Yet as important as good weather was in helping the Vancouver area skirt the golf recession, there was also another contributing factor, perhaps even more crucial: the Korean phenomenon. It’s widely recognized that Koreans have overtaken Scots as the globe’s most enthusiastic golfers, and now many believe that they deserve the same distinction in B.C. People of Asian descent make up about 35 per cent of the Metro Vancouver population, and those of Korean descent only 2.2 per cent, but over the winter Asians accounted for about 70 per cent of rounds played at the City of Vancouver’s three courses, estimates Norman. No one kept the stats, but many golfers feel the majority of those were Koreans. What could possibly account for the imbalance?
Beyond a national infatuation with the game that rivals even the Canadian taste for ice hockey, Korean immigrant and avid golfer Jeanne Chung chalks it up to the frustrations of playing back home, where a round is difficult to obtain, takes up an entire day and costs $300 to $400, when obligatory socializing is taken into account. As well, she says, “many immigrants from Korea arrived in the Lower Mainland with financial resources but have faced difficulties in becoming established here.” That circumstance provides them with a rare combination of time and money, which is ideal for golf. Whatever the explanation, operators have taken notice. The West Coast Golf Group, which operates three courses in Vancouver suburbs, offers coupons in Korean, and GolfBC, which operates nine courses across the province, in addition to three in Hawaii, advertises in Korean-language publications. “Koreans make up about 20 per cent of our membership,” says GolfBC marketing manager Rita Rennie, referring to Metro Vancouver courses such as Richmond’s Mayfair Lakes.
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None of this is to suggest that Vancouver-area courses have cruised through recent times without challenge. West Coast Golf Group’s Rich Peverley believes there is an oversupply of courses, and although rounds played have remained consistent, it’s largely because operators have been marketing aggressively, with widespread couponing and reduced rates during off-peak periods. GolfBC vice-president of golf operations Andy Hedley sums up the current approach: “If you want to play golf, we’ll try to find a time and price for you.”
That accommodating attitude is especially important given that corporate golf dropped by as much as 50 per cent in 2009, according to operators. Tournaments and corporate outings only account for about 10 per cent of revenues at West Coast Golf Group, says Peverley, but losing so much of that is still a challenge in a low-margin business. The good news is that business seems to be returning in 2010, agree Rennie and Peverley, with early bookings well ahead of last year, if not yet back to previous levels.
In addition to all that aggressive marketing, there are a few more changes golfers can expect to see in 2010 and years to come.
One will be a concerted effort to alter the direction of golf participation rates, which are definitely dropping in the U.S., and flat at best in Canada, where recent data are harder to come by. Doug Ferne, regional director of the B.C. chapter of the National Golf Course Owners Association, says the emphasis will be on making golf “fun, affordable and fast.” Andy Hedley provides specifics: “Playing less than 18 holes, kids play free, family days, big discounts for tee times later in the day.”
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There will also be an increased emphasis on getting and keeping younger players. That’s good news for anyone with a child who might like golf. Chances are, a nearby course will find a way for him or her to take lessons and get out onto the course for a lot less money than might be expected.
Finally, look for a discernible change in course maintenance. With golf revenues mostly flat and real estate sales no longer the fat subsidy they’ve been in recent years, courses will have to cut costs where they can. Wages make up about 80 per cent of a typical course’s operating expenses, with water, fuel and chemical inputs accounting for much of the rest. All of these costs could be cut considerably if courses reverted to the less-manicured conditions that were prevalent in North America 30 or 40 years ago and remain the norm at even the best courses in Europe and Australia.
It’s a line of thinking that has led to so-called minimalist courses such as Oregon’s Bandon Dunes and Richard Zokol’s Sagebrush Golf and Sporting Club in the Nicola Valley, but now the trend is going mainstream. For example, in 2008 Golf Digest magazine changed its rating criteria to recognize “firm, fast and rolling fairways,” a tweak that not only rewards courses of that description but actively penalizes those that are too lush and green. The rationale is threefold: courses that use less water and chemical inputs are more environmentally friendly, they’re cheaper to maintain and they are more fun to play.
So, let’s review: the worst seems to be over, but in dealing with their current problems B.C. golf courses are making the game more accessible, more affordable, more environmentally friendly and more fun. The scorecard is looking better already.