Tuesday, October 21, 2008

Crunch Time For Irish Golf?

The following article appeared in the Irish Times - it's long but it really should be read by everyone involved with the Golf tourism industry in Scotland.

THE TERM "Credit Crunch" has quickly become a redundant phrase. It's become too understated, no longer sufficient to describe the severity of these troubled times of economic hardship when global markets face financial meltdown and, heaven forbid, golf clubs in Ireland have to drop often exorbitant entrance fees to attract new members.

For well over a decade Ireland has had it good, ever since the Celtic Tiger roared into town, and quickly cash became king. It was thrown about like confetti on whatever notion took the fancy. Five-figure sums to simply join clubs - not to mention annual subscriptions - were waved off as gleaming cars straight from the showroom pulled into club carparks all over the country.

Now it appears to be time to take stock, to show a certain restraint, as people from all walks wait to see how this global financial crisis will ripple down and affect them.

Without golf the world would still keep spinning, but the fact is this game for all ages has been a cornerstone of the Irish tourism industry for many years, contributing millions to the treasury coffers long before the Ryder Cup circus descended on Kildare in 2006.

Over 440 clubs in Ireland are affiliated to the Golfing Union of Ireland (GUI) and the Irish Ladies Golf Union (ILGU), with many suggesting this segment of the tourism industry had already become a saturated market.

Other factors also come into play, with some pointing to less international exposure for Ireland as a golfing destination since Fáilte Ireland stepped back after the Ryder Cup at The K Club.
Ireland has also been a victim of its success as our Celtic cousins, Scotland and Wales, noted the successful Irish way and have been promoting their products heavily in the run up to hosting the Ryder Cup at Celtic Manor in Wales 2010 and Gleneagles in Scotland 2014.
Within this industry framework clubs might fall into several generic categories, ranging from the established private members clubs to the more recent resort complexes and other commercial ventures.

By their very nature, each type of establishment is exposed to and affected to a greater or lesser extent by what happens in the global marketplace. But one thing they all have in common is the need to generate green fee revenues while ensuring membership retention.

Waterville Golf Links in Kerry has certainly felt the pinch this year - and they are not alone.
"Our numbers are down a lot this year, probably about 25 per cent, but I have to say, the poor summer has been as bad as any recession," explains former Ireland international Noel Cronin, secretary-manager at Waterville.

"We rely heavily on overseas visitors, particularly the American market which accounts for anything up to 75 per cent of our green fee revenue.

"It's the same problem everywhere and the weak dollar is a huge factor for us."

Waterville is a privately-owned company, which leases the club and facilities to members, and the club is one of the main stop-offs for overseas visitors who come to play some of Ireland's best links courses.

"A lot of our business is generated through tour operators, plus we're part of the South West of Ireland Golf Swing along with Ballybunion, Lahinch, Tralee, Ceann Sibéal and Dooks," adds Cronin.

"We all pull together, with Paddy O'Looney and Brendan Keogh doing a lot of good work for us on the marketing side at trade shows all over the world."

Cronin also said losing transatlantic flights into Shannon has had a "big impact on the region".
Waterville will ride the storm, but they have had to become creative to attract business and early morning or late afternoon green fees can be obtained for €115 instead of the €180 rack rate. During winter, rates will drop to €60 midweek or €75 at weekends, while the closed membership is expected to open again next year.

Even Killarney Golf Fishing Club, a former Irish Open venue, hasn't been immune to the downturn. This idyllic setting on the Killarney Lakes, with three top-rate courses, doesn't rely as heavily on the American market but has experienced a sharp decline in the second half of this year.

"We are finding it a difficult year. We were okay up to June, but it has really nose-dived since then. In these circumstances it's very much a case of cutting your cloth," explains Maurice O'Meara, Killarney general manager, who has been forced to put his staff on a three-day working week from Monday until next March.

"We estimate we are going to be down 20 per cent on our green fee revenue, but the current climate is also impacting on new members joining. That's a big issue from a joining fee perspective."

That joining fee is currently €15,000, but annual membership is relatively low at €720, considering the three courses and fishing entitlement. Like Waterville, O'Meara also cited the poor weather as a major problem.

"Right across the board golf clubs have become more price sensitive this year, and though we've had to make some very tough decisions this year we'll trade our way out of this. To be honest, my concerns are for next year because I think the corporate market will be non-existent," added O'Meara, who is also working closely with local hotels to put attractive overnight packages together.

"We're all competitors but we're working together on this one."

Strandhill Golf Club in Sligo operates on more modest numbers, with the entrance fee costing €700, the same as the annual subscription, but they too are feeling the effects of the current climate.

"Most golf clubs are struggling at the moment and we will run at a loss this year. Because of the financial situation we have had to cut way back in administration costs," explains Cyril Devins, who runs the pro shop at Strandhill. Their secretary-manager has gone to a three-day week.
Strandhill's more illustrious neighbour, Co Sligo Golf Club, was forced to make their secretary-manager redundant to cut costs. This is surprising given the club is renowned as one of the finest links courses in Ireland.

At the other end of the scale to the Strandhills of this world, The K Club and Old Head Golf Links in Kinsale still charge top dollar. The standard joining fee at The K Club is a staggering €80,000, with annual subs €6,950.

The Palmer and Smurfit course green fees are normally €380 and €230 respectively, but have dropped to €195 and €125 for winter. Old Head is very much geared to the corporate market, but single green fees start at €295.

Some of the private member clubs, particularly those near city centres, appear to be better placed to cope in times of recession. Peter Ribiero at Delgany Golf Club puts part of that down to location and a strong membership base.

"Fortunately we're not like a resort development or commercial venture whose business model relies on property sales. Although we rely on our membership base, we also need to compete for green fee business and in challenging times you need new ideas," explains Delgany's secretary-manager Ribeiro.

Aside from full membership, Delgany also offer a five-day clubhouse membership with limited playing rights. There is no joining fee and costs less than €1,000 - depending on the exact specification - a clubhouse member will get "X-number of green fees per annum and be eligible for up to four competitions a year, plus obtain an affiliated handicap".

John McCormack is secretary-manager at Castle Golf in Rathfarnham and he, too, believes location plays a crucial role. McCormack is also president of the Club Managers Association of Europe (CMAE) and believes investing in people in difficult times is crucial.

"In a downturn you should invest in people. The businesses that will survive are the ones with the best service and product. That's why both at the Castle and through CMAE we work very hard on ongoing education," says McCormack.

"We're already operating in a very saturated market and we have seen new golf developments being halted or plans restricted because money is tight. Thankfully I believe the Castle is insulated from the economic downturn better than most."

Other ventures are not so fortunate, with some either having to reduce their entrance fees or in the worst-case development, work simply stops.

Carrigglas in Longford was to have been designed by Retief Goosen, but this multi-million euro project came to a grinding halt earlier this year. Pádraig Harrington's first venture into course design at The Marlbrook, near Clonmel, suffered a similar fate as the owners, the Kent family, put the project on hold.

For others there has been the need to reduce prices to more realistic levels.

Paul McGinley designed his first course at Macreddin Golf Club in the Wicklow Mountains where the full 18 holes opened in July, but they've already had to review the numbers at this €12 million development.

Membership was originally set at a €30,000 redeemable preference share entrance fee with a €1,500 annual subscription, but the current climate caused that to drop to €8,000.

The Darren Clarke-designed Moyvalley Golf Club in Kildare were forced to reduce their entrance fee from €17,500 to €10,000, with annual subscriptions €1,250.

Castleknock Golf Club went a step further and introduced a completely new membership option. Instead of their original €30,000 preference share joining fee and €1,500 annual membership, they have introduced option two, with no joining fee and annual subscriptions set at €2,750.
But it's not doom and gloom everywhere. Bunclody Golf and Fishing Club in Wexford appear to be bucking the trend and have had a strong membership pick-up ahead of their official opening early next year.

"It's a local consortium of 13 people, 12 from Bunclody and one from Carlow, who are behind the development which has an investment of over €20 million," explains Michel O'Carroll, general manager at Bunclody.

To play the Jeff Howes design, preference share entrance is €8,000, with annual fees €1,200. O'Carroll said they got great feedback from the open weekend and advertisements they ran during the Ryder Cup and hope to have membership up to 350 by the end of the month.
"Had we launched three, four years ago the fees would have been considerably higher, but there's no point in being unrealistic. I'd say we're one of the few (developments) with a positive story at the moment," added O'Carroll.

Ballyliffin Golf Club is one of the great outposts of Irish links golf on the Inishowen Peninsula in Donegal. They boast two wonderfully natural links courses, The Old Course and The Glashedy, where the Senior Irish Open was held last year.

"It's still business as usual but things have certainly tightened up. We haven't had much of a hit this year but we are expecting a drop next year," says John Farren, general manager at Ballyliffin, who is thankful for a vibrant club with over 1,400 members.

Ballyliffin started Friday open competitions for €30 to attract visitors, but they have also tapped into the local hotels to encourage overnight stays. "The latest thing we are doing is overnight stays where residents can get their green fees for as little as €50. It suits us and it suits the hotels, and if we can get people to stay then they spend a few quid in the local economy," adds Farren, who still remains upbeat.

"There's no doubt like everyone else we are feeling the pinch, but there's no panic buttons being pressed just yet."

With economic uncertainty set to rumble on for some time yet, clubs all over Ireland have been forced to consolidate, reassess and become altogether more efficient to ride out this economic storm. In a bizarre sort of way, it's a good time to play somewhere new when there's real value for money on offer.


  • K CLUB: Joining fee - €80,000; annual subscription - €6,950. Green fees: Palmer - €380 (€195 winter) Smurfit - €230 (€125 winter)
  • KILLARNEY GOLF AND FISHING CLUB: Joining - €15,000; annual - €720.
  • MACREDDIN: Joining - was €30,000 redeemable preference share, now €8,000; annual - €1,500
  • MOYVALLEY: Joining - was €17,500, now €10,000; annual - €1,250.
  • WATERVILLE: Joining - closed, re-opens next year. Green fees - €115 instead of €180 rack rate; winter €60 midweek, €75 weekend
  • STRANDHILL: Joining fee - €700; annual subscription - €700
  • OLD HEAD OF KINSALE: Green fees - start at €295.
  • DELGANY - Alongside full membership, five-day membership: joining - free; annual - up to €1,000
  • CASTLEKNOCK: Joining - was €30,000 preference share, now free; annual - €1,500, now €2,750.
  • BUNCLODY: Joining - €8,000; annual - €1,200

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