Still Swinging

At $500 per day plus taxes for the Wisconsin couple’s stay, Southwest Florida could use more visitors like Randant and Huiras. An uptick in golf tourism would be a boon to Southwest Florida’s housing industry—and, by extension, the regional economy as a whole.

Directly and indirectly, the sport has pumped millions of dollars into Southwest Florida’s economy through tourism, real estate, capital expenditures, golf course operations, merchandise and other outlets. A University of Florida study titled "Economic Dimensions of the Florida Golf Course Industry" cites golf tourism in Collier and Lee counties as producing $672 million in revenues in 2000—$476 million in Collier and $196 million in Lee, the most recent information available for the state.

But the industry has suffered here in recent years. Anticipating an onslaught of golfers, developers carved numerous new golf courses out of the region’s woods and wetlands in the 1990s and first few years of this decade. The economy took a turn, though, and new generations of golfers are approaching the sport with different demands than their predecessors. As lifetime memberships and weekends at the golf club go the way of the three-martini lunch, golf courses and golf-course communities are forging new strategies to adapt.

Golf For The Masses Florida claims more golf courses—about 1,216—than any other state, and it topped the nation in 2006 in the number of new courses opening. Now we have a golf-course glut.

"We overbuilt golf courses," says Steve Eisenberg, director of Florida Gulf Coast University’s PGA golf management program and a private consultant. "[Reports] said the United States golf industry could support the building of one new course a day indefinitely. People took that information to heart and built golf courses left and right.

Then came the housing slump, and the hordes of golfers that were expected to populate all those courses didn’t materialize. Between 2000 and 2006, the total number of available memberships in the region grew by nearly 50 percent, outpacing the number of potential members. So the absorption rate—the number of memberships bought as a percentage of homes sold—has been on the decline for several years, says Henry DeLozier, a principal in Global Golf Advisors and former vice president of golf for Pulte Homes. "The current absorption rate is less than 17 percent against [a] historical profile of more than 30 percent," he says. "There are more than 4,000 unfilled memberships available within the Naples market," up from 3,200 three years ago, he adds.

The silver lining is that the sport has become more accessible to residents and tourists. Local golf clubs have lowered fees, and with fewer buyers, equity membership prices have dropped. At Gulf Harbour Yacht and Country Club in Fort Myers, for instance, equity membership cost has dropped from $85,000 to $45,000, says Jenny Moorhead, vice president and broker associate of Amerivest Realty.

Equity memberships, which typically range from $25,000 to $100,000 in Southwest Florida, have been declining to $15,000 to $75,000, says DeLozier. "I don’t think we’ll continue to see a lot of erosion in initiations because a lot [of clubs] are offering nonequity memberships," he adds. Short-term or seasonal nonequity memberships allow golfers to try out a club without the long-term financial commitment in the hope that they’ll commit when the economy brightens. Until then, more golfers on the green mean more opportunities to sell lessons, gear and even, possibly, real estate.

Homebuyers Win The soft housing market has affected golf communities in different ways. Generally speaking, those that were built before 2005 closer to the Gulf fared better than newer communities that are farther from the water, says Moorhead. "If you had bought a home in Estero 10 years ago for $160,000, it would be worth about $500,000 today. Two years ago, however, it would have sold for $650,000," she says.

Housing prices in golf course communities are down about 30 percent from their peak—which, by early summer, was spurring sales. "Prices have dropped to where they’re more palatable for investors or homebuyers," Moorhead says. "We have tons of foreclosures, but we’re also seeing a tremendous amount of sales. In May, there was a 40 percent gain in pending sales from last year [in Naples and Bonita]."

Communities where homes are priced from $200,000 to $400,000 have been most affected. "There’s just so much inventory [in that price range]," she says. In Pelican Sound, for instance, condos were going for less than $200,000.

"I never thought I would have seen [a sale] for $180,000 in Pelican Sound. They were $300,000," Moorhead says.

Another promising sign: Europeans and Canadians are showing a resurgence of interest in Southwest Florida’s real estate as the weak U.S. dollar adds value to their investment, say Moorhead and DeLozier. Two of Moorhead’s sales in a two-month period recently were to Germans. "They’re second homes, and they paid cash," she says.

Family Links Societal changes are also forcing the industry to adapt. The Eisenhower generation viewed golf clubs as a badge of prestige and a place where they could spend time with colleagues and away from the family. Baby boomers and Generation Xers don’t have the time or desire to spend an entire day on the course—especially without their family, says Eisenberg. "New members in their 20s, 30s, 40s are saying, ‘Golf is something I want to do with my family.’"

Golf club owners have picked up on that message and have sharpened their focus on women and children.

Currently, the number of women golfers isn’t increasing in our area, says Tom Wildenhaus, golf director at Olde Florida Golf Club in Naples. "The same number starts as drops out every year. If we could get more women playing golf, the industry would thrive."

Eisenberg believes that the growing number of women executives is finding its way onto the links, where business deals often are sealed outside the office. Through his consulting firm, he helps golf clubs reach women through "business golf" programs.

"It really is an A-to-Z primer [to make] you comfortable on the course—understand the rules and etiquette and when it might be appropriate to start a conversation. If the person is playing badly, that’s not the time to bring to up [a business deal]. It’s something that women in particular want to learn. The last thing [they] want is to be on an uneven playing field," he says.

A variety of other initiatives that golf clubs are implementing to target a broader base include: the World Golf Foundation’s successful First Tee program, created to engage young people from diverse backgrounds in the sport; golf leagues for children, to compete with the popularity of T-ball and soccer leagues; and course adjustments to make playing more enjoyable for women and others who can’t drive as far or clear a water hazard at the first hole, for instance.

Customized Memberships Short-term commitments are another approach to reviving the golf industry. And Jim Magnusson, a WCI revenue development director for WCI Communities and former PGA tournament director, points to Tour GCX as an innovative way to accommodate busy golfers. Founded about five years ago in cooperation with the founders of Marquis Jet, it provides individual and corporate members with access to private clubs. Members are pre-qualified and purchase intervals of tee times, he explains. "They might not have time to play often, but they come down from New York with clients or friends, and they are viewed as potential future buyers."

As a way to boost home sales, WCI is promoting golf tourism by introducing an online booking tool. WCITravel.com lets prospective visitors book not only their airline and hotel reservations, but also their tee times, says Magnusson. Even if they aren’t ready to buy a home, he says, "We can at least get them on a course, if not in the sales center."

Golf club owners and managers are revising fee and membership structures—by offering more short-term, nonequity memberships, for example—to accommodate smaller wallets and shifting values.

One of the few local courses to open in the past couple of years, Old Corkscrew Golf Club in Estero, which is not attached to a community, anticipated some of the changes when it opened in February 2007. "We came out of the ground addressing what we saw," says Mark Iwinski, general manager and director of golf.

"We customize [memberships]," he says. "We have a type of membership that allows the members to stay in control of their golf budget. For as little as $15,000 for 10 years, [you can get] all the perks and rights to a club [with] a little higher fee when you play. Expenditure is based on how many times you’re playing."

Residents from nearby communities are getting auxiliary memberships at Old Corkscrew, and it has adopted a more lenient guest policy than some clubs, where visiting family members can have a tough time getting a tee time in the busy winter months.