'Lame duck' clubs causing concern
THE thorny issue of 'unfair trading' -- whereby golfing facilities in receivership or NAMA can lower their green fee prices significantly -- got an airing at the 'Road to Recovery' conference last Friday at the Convention Centre in Dublin.
Over 280 people from all sectors of the golf industry in this country attended the event. Ranging from GUI and ILGU representatives through tour operators, course owners, members of golf club committees and golf management companies, the participants were united in a common purpose -- to do whatever they could to improve business and in some cases, find a way to survive the recession.
There was much to discuss and in a Q&A session, Mount Temple GC owner Michael Dolan raised the issue of 'lame duck' clubs that are pushing green fees to the floor.
"We have unfair trading and it's not a nice thing to say, but the longer they're left running the more harm they're going to do to the industry," he said.
Dermot Desmond, chairman of IIU (International Investment and Underwriting), took up the point, and called for some creative thinking, including possible swaps where older clubs could move to the newer facilities and the courses they leave behind could be transformed into football pitches or recreational grounds.
"Let's think about it. Let's put the best brains together in all areas and see what the possible solutions are.
"There will be solutions to the problems and it would be a pity if great golf courses, because they're uneconomic, because they were built on the premise of selling properties that can no longer be sold, that those golf courses can't be used by other clubs and those (vacated) clubs can't be used for some social or recreational purposes," he said.
Ian Duffy of financial advisory firm FGS, when asked to comment on the issue, said: "Yes. I just echo that. The innovation needs to come from the room (gesturing to the delegates). It won't come from the banks in my view and it won't come from NAMA.
"As Dermot says, the key is to think the unthinkable, like 'maybe we should move from our current club to the one down the road which has just been built and which is better. We could combine the finances and go to the bank with the proposal.'
"And that's the space, in this current climate, we need to go to if we're going to find solutions -- and there are solutions. I'm quite sure of that," said Duffy.
Given that membership numbers in the ILGU and GUI have dropped by almost 10pc each over the last two years and that figures show an over-supply of courses, the kind of creative thinking urged by Desmond and Duffy could be required sooner than later.
There was plenty of positivity, however. For a start, all were agreed Ireland has an excellent golfing product to present to the rest of the world at competitive prices.
Buddy Darby noted that our links golf is of high quality and way cheaper than courses in the USA which offer a 'links' experience. Whistling Straits, Bandon Dunes, and Pebble Beach cost an average of €240 to play, yet Doonbeg is available at €80. He said the fact that US golfers are willing to pay premium prices for a links experience was a major opportunity for Ireland.
"Ireland needs to communicate better, not alone the value available to the US golfer, but also the unique experience awaiting them here," he said.
Hopefully, part of that equation will be helped by Failte Ireland's launch of a new website, www.golf.discoverireland.ie, featuring Padraig Harrington as Ireland's Golfing Ambassador.
Three central themes came out of the conference: (1) The industry is fragmented and needs an 'Ireland Inc' central golf body to lobby for the golf product; (2) domestic growth won't be a saviour in the foreseeable future, so tourism becomes more important than ever, and (3) the airlines need to be encouraged or paid to up their game and bring in more golfers from overseas.
Also highlighted was the need for clubs, particularly those who want to attract more green fee income, to really focus on enabling golfing visitors from home and abroad to book tee-times online.
All clubs could do more in terms of 'yield management' -- ie, do their best to maximise green fees at times when the course is available by varying price structures accordingly.
And more should be done by clubs to find ways of co-operating to lower costs, including sharing machinery, and, where possible, staff.
Chaired by Roddy Carr, CEO of TwentyEleven, the promoters of the Solheim Cup to be played at Killeen Castle next year, the event had a strong line-up of speakers, including: Dermot Desmond (Chairman IIU); Ian Duffy and Declan Taite of FGS; Charles 'Buddy' Darby, CEO Kiawah Partners/ Doonbeg Golf Club; Mark Nolan (CEO Dromoland Castle Golf and Country Club), Frank Bowen (GUI), Sinead Heraty (ILGU), Keith McCormack (Failte Ireland) and Mike Loustalot (Golf Channel Solutions).
There are big deficiencies in the area of Junior golf and in attracting men and women aged between 25-40 to join golf clubs, and the ILGU and GUI are encouraging clubs to find ways to address these problems.