Overhaul needed to combat surfeit of Irish courses
The Irish Open is expected to survive its latest crisis, caused by the shock withdrawal of title sponsors, 3Mobile. When the European Tour embarks this week on finding a replacement sponsor, I understand their fall-back position will be a return to direct financial support, which they provided in similar circumstances in 2007 and 2008.
But should this happen, a consequently reduced prize fund would mean sacrificing the plum, August Bank Holiday weekend slot which proved to be a huge success at Killarney this year. And it would have to be a short-lived arrangement, norwithstanding the healthy state of the Tour's finances.
George O'Grady, the Tour's chief executive, is on record as stating that the Irish Open has no God-given right to survive. Still, he remains extremely anxious to maintain a meaningful presence in this country with an event which was once rated second only to the British Open Championship.
Pressure is certain to come on Failte Ireland, who invested €1m in the Killarney staging. "We view the Irish Open as a flagship marketing event, promoting Ireland not just for fantastic golf but as a welcoming and beautiful destination," said Keith McCormack, their head of business tourism and golf.
McCormack may have cause to publicly address the issue earlier than expected, given his role as a keynote speaker at a one-day Golf Business Conference in Dublin's Convention Centre next Friday. Promoted by Carr Golf Services and Farrell, Grant and Sparks (FGS), the admission charge is €125 (www.golfconference.ie).
Conference speakers will also include financier, Dermot Desmond, and Buddy Darby, owner of Doonbeg GC and Kiawah Island Resort, along with Mike Lousalot from the Golf Channel in the US. And there will be contributions from Marty Carr of Carr Golf and Frank Bowen and Sinead Heraty representing the GUI and ILGU respectively.
A recent study commissioned by the conference organisers covering 160 clubs, indicates a serious over-supply in the Irish golf market. For instance, if you take all the time-sheets at all the operating courses, allowing for 20 days of annual closure and 10-minute tee-times, utilisation comes out at 47 per cent of overall capacity.
More specifically, there are 100 courses within an hour's drive of The K Club. So, among the recommendations down for debate will be the disbandment of at least 50 clubs -- both member and proprietary -- on a regional basis.
Back in 1994, at a time of crisis in the British golf industry, I received a letter from a Galway-based leisure consultant, Martin Carrigan, warning of danger signs on the Irish scene. His words, 16 years on, have proved to be eerily prophetic.
"The most neglected factor in the private membership golf course business plan is marketing," he wrote. "At best, it is grossly miscalculated..... Romance and greed will encourage entrepreneurs to blindly pursue their golf course fantasies. But let us learn from the British debacle. All too quickly the dream can become a nightmare."
Interestingly, the ultimate survival of certain British clubs from the early 1990s had much to do with their coming under a marketing umbrella like the DeVere brand, which currently promotes 11 courses attached to hotels.
Against this background, it is fascinating to note that Irish clubs spend only one per cent of their revenues on marketing. "We also found that 40 per cent of courses appear not to have any strategic plan whatsoever," said Marty Carr. "This indicates a serious deficiency in management."
The worst excesses of the Celtic Tiger years found memorable expression in the sight of Europe's victorious Ryder Cup captain, Ian Woosnam, standing on a K Club balcony with champagne streaming like soapsuds from his nostrils. Yet the damage of over-supply in the Irish market was actually done prior to that.
From 275 clubs at the end of 1990, the number rose to 394 by the end of Millennium Year -- a 10-year increase of 119, or 43.4 per cent. Now, for the first time in living memory, affiliated club numbers have fallen this year from 431 to 430: Fernhill is the lone newcomer while Limerick County and Clonlara (Co Clare) have departed the scene.
"Management committees need to look at what's going on in the marketplace regarding joining-fees, annual subscriptions and green fees," said Carr. "Their decisions, in conjunction with the secretary/manager, should be market-led not club-led.
"To tackle the problem of too many golf courses, two or three clubs in close proximity to each other could get together and agree on one, central location," Carr continued. "With membership numbers falling because of unemployment, you create one viable entity making money, rather than two or three just limping along. As a starting point, we should have 380 clubs instead of the present 430."
Looking at golf tourism, Buddy Darby said: "As the owner of a project in Ireland, I consider myself Irish. And it strikes me that we're more concerned about competing with each other than in selling Ireland as a destination for golfers. Though our occupancy and rounds are going up, I'm not profitable at Doonbeg. But I'm committed to Doonbeg.
"The US is still the primary market for Irish golf. And instead of competing with each other, we should be competing with other world destinations. Places like Whistling Straits, Bandon Dunes or the Ocean Course at Kiawah Island, offer Americans a links experience close to the Irish model. The charges at those courses are about $225 per round.
"So, while pricing inside of Ireland may be a problem, it is not so for Americans coming over. And for the golfer based in New York, it is easier for him or her to get to Ireland than it is to get to Bandon Dunes (Oregon). And I believe our product is the best."
Carr takes the more hard-nosed view. "As the ultimate goal of this conference, I would like to see the emergence of a new body which could oversee an organised restructuring of the entire industry. In the meantime, identifying the problem areas would be a good start."