Dana Garmany knows golf, particularly the management side of it, as well as anyone. His company, Troon Golf, reportedly manages more than 130 U.S. golf courses and something like 65 others in 23 foreign nations.
If you’re wondering, roughly a quarter of Troon Golf’s properties are part of private clubs -- and Garmany sees some trouble on the horizon for them. In a recent conservation with KPMG’s Golf Business Community, here’s what he had to say about the future of private clubs:
The days of big initiation fees are gone, and [private clubs] will need to find a new model. In the golf boom of the 1990s, golfers didn’t really play more golf, they just spent more money on it. They had two memberships, not one. They went on more than one golf holiday and bought more than one set of clubs. So private clubs will still need the annual dues (membership income), but they are going to have to find new ways to make money.
Obviously, private clubs make money by signing new members. But to do that, Garmany believes, they’ll need to make themselves attractive to younger generations that doesn’t necessarily do things the way their parents did.
It’s the next generation that is the challenge, Garmany told KPMG. How do we make golf fun for the under-40s, who do not have a competitive zeal and treat a day’s golf like a spa day? Their wants and needs are so different, and we have to recognize this. If a 38-year-old executive has managed to get away from the office to play golf on a Friday afternoon, you can’t then tell him he can’t use his cell phone or log onto the internet in the clubhouse. What chance is there of him becoming a member? If people quit the game, they don’t come back, so we have to keep people playing.
Garmany was also asked where in the world he believes Troon Golf’s best opportunities lie. His answer:
The USA market is going to remain flat for development in the next three to five years, so we want to expand internationally and build a profit base by getting to the right places, including Asia. . . . Morocco is a growing market for us at the moment. And while the Middle East has slowed down, it remains an important market.
And if you’re thinking about selling your golf course, you might want to reconsider. Garmany thinks golf courses are beginning to look like smart investments again.
There is probably a time coming again very soon that you do want to own a golf course, he said. When the market bottoms out, there may be some value. It may be risky now, but we think in 2012 and 2013, we will see more people taking a shot at it.
