Many golf courses in Southeast Michigan saw record numbers of players early this month when beautiful weather met pent-up demand during the coronavirus pandemic.
But the state's $4.2 billion-a-year industry, which employs 60,000 workers, could be sliced in half at the pace it's on now, experts say.
Restrictions on travel, large gatherings and golf carts have slammed most owners of the 750 courses across the state, which generally make more income from amenities than the game itself.
At the same time, golf has perhaps never been a more popular topic in Michigan. It was at the center of local and national debate when Gov. Gretchen Whitmer decided to allow it late last month. The ensuing plea to allow cart use sparked more controversy.
Golf carts apparently are now allowed in Michigan after the Department of Labor and Economic Opportunity issued a clarification late this week.
While the financial crisis will inevitably shrink the industry in Michigan — home to the fourth most courses in the country, despite waves of closures in the past decade — the unexpected surge of interest in a game often viewed as stuffy and elitist could help bring it new life.
"Golf is one of the safest activities you can participate in, and so because of that, we might actually see a spike for golf this summer," said Chris Whitten, executive director of the Golf Association of Michigan.
Whitten said there has been a sizable increase in sign-ups for GAM's Youth on Course program, which allows kids to play more than 100 courses around the region for no more than $5. Around 4,000 participated last year. More than 4,500 are expected to take part this year.
Tom Schwark, owner of Sycamore Hills Golf Club in Macomb County, said his 27 holes have seen more play from younger generations, especially with limited entertainment options during the statewide shutdown.
"I've been pleasantly surprised how many golfers are willing to walk on the golf course right now," he said. "We're not getting cart fees, but on the other hand, we are getting a lot of play."
Detroit's three municipal courses have logged more than 4,300 rounds since reopening April 25 — a wildly high number considering last year the courses were mostly closed for flooding at this time, said Karen Peek, director of golf operations for the courses.
"To some degree, we expected that because of the isolation that's been going on for what seems like a lifetime," she said. "There have been times when the golf course looked like a June day in 2019."
Customers have included the usual mix of Detroit regulars and players from the suburbs, Peek said, but there have been a lot more younger people than usual.
That's a good sign for an industry that has long struggled to attract the coveted business of millennials. That the pandemic could potentially boost the popularity of the sport is a silver lining some can see better than others.
Nearly 60 percent of Michigan's golf courses have reopened since getting the go-ahead April 24, according to a recent estimate by the National Golf Foundation.
Most of them have been in metro Detroit, one of the hardest-hit regions in the country in terms of total coronavirus cases and deaths. For courses up north, which has seen relatively minimal impact from the virus, the financial blow has been worse.
Treetops Resort in Gaylord was forced to move or cancel 2,400 bookings through May 15, the end of Whitmer's current stay home order, said Kevin McKinley, director of golf and ski for the resort. Seeing empty books during peak reservation season worries him.
"Two things are going to kill us and other resort courses," he said. "One is if we can't use golf carts. That pretty much obsoletes three out of the five of our golf courses … The other thing that'll kill destination resorts here is if travel is limited or restricted."
Worst-case scenario, McKinley said he'll go from planning a record number of rounds played this season at 96,000 to 97,000 to being hard pressed to make 20,000 rounds.
"That would be catastrophic," he said. "We would probably make 25 to 30 percent of budgeted revenue."
The resort, which typically employs around 300 people by now, has only about 30 on payroll, mostly maintenance crew keeping courses up to snuff. McKinley said the budget to maintain its five courses and resort landscaping works out to around $400,000 just for April and May.
Only one of its courses is open, for walking only, with a list of safety measures that have become common for courses across the state: online payment only, foam inserts in holes to prevent contact with the cup, spaced out tee times, sanitizer aplenty and closure of bathrooms, drinking fountains and ball washers.
Boyne Resorts, near Boyne Falls, opened one if its 10 courses for walking only, Bernie Friedrich, senior vice president of golf operations, said in an email. Only two of them can be played without a cart.
Coming off a streak of several years making record revenue, the resort prepared three budgets ranging from a 20 percent reduction with a June start to virtually no revenue if the resort is closed all season.
"We have 400 members and thousands of tee times on the books, we need to get carts in play soon," he said in the email. "Even then with single riders in carts, it will be an interesting year."
One bright spot for the resorts is that the pandemic had virtually no impact on ski season. Its damage on golf will become more apparent when the governor provides updates on her stay home order, which on Thursday she extended to May 28.
Alongside golf carts, next on the wish list for resorts is lifting restrictions on unnecessary travel, which have prevented them from selling their main product of package golf with accommodations.
Another chunk of revenue for nearly all courses is tied to food and beverage. They have lost nearly all those sales until at least May 28 due to the extended ban on bars and dine-in service.
Even if restrictions are lifted, resorts could be hampered by lingering health and financial concerns that put a golf outing out of the question.
Golf carts might not be essential to sustaining human life, but course owners argue they are an essential revenue stream.
When the Michigan Golf Alliance asked Whitmer late last month to allow carts on the course, the request was criticized by some as being petty amid a global pandemic. Golf advocates said that not allowing cart use put undue strain on courses already taking a financial hit.
The state eventually caved to the request.
"They are allowed, but like with all outdoor recreational facilities there are mitigation measures that need to be implemented under section 11 (h). Additionally, clubhouses and dining halls in golf establishments are still closed under the public accommodation EO," the labor department said in response to a request for clarification from the Small Business Association of Michigan.
Courses will be charged with implementing safety measures, such as frequently sanitizing the carts and allowing only one person per cart.
On average, cart fees account for around 30 percent of the overall cost to play golf, Whitten said. More importantly, not allowing them takes away the bread and butter for most courses: senior play and league play.
Golf carts are also one of the most significant expenses for course owners. An average course typically runs a fleet of 60 carts, which would cost around $300,000 to purchase, said Vinnie Ciavoni, manager at Motor City Karts, a golf cart dealer in Mount Clemens.
Courses typically sell their carts every five years for half the original value and buy new ones to be cost efficient, Ciavoni said. Many courses also rent the carts, which ends up costing about the same.
Business has been good for the cart dealer, which has seen an increase in demand for parts and services from individual golf cart owners since the shutdown began. The company never closed because golf carts are considered an essential service — depending on their use.
Ciavoni said he supplied five golf carts to the TCF Center to help doctors, nurses and patients get around the makeshift hospital set up to handle an overflow of coronavirus patients. It also has a contract with McLaren Macomb hospital.
Allowing carts does not solve all worries for course owners.
"(Courses) are forecasting already a 50 percent loss from outing revenue, wedding revenue, large-group gathering revenue," said Jada Paisley, executive director of the Michigan Golf Course Association.
Back at Sycamore Hills, Schwark estimates revenue losses to be around $200,000 so far, mostly due to canceled sports banquets. A large chunk of his business comes from weddings, which likely won't be happening there anytime soon.
Schwark said he received a federal Paycheck Protection Program loan that was "well into six figures" to help him meet a weekly payroll at the golf course that he said exceeds $20,000. Cancellation of parties and banquets means lost jobs for the club's typical 40-50 seasonal workers.
Some courses were quick to defy the "no cart" rule or employ policies that allowed them for physically handicapped players. Moose Ridge Golf Course in South Lyon allowed riders in carts with a plastic divider, while courses such as Bruce Hills in Bruce Township allowed beverage attendants to operate carts. Others including Rattle Run in China Township allowed them for golfers who said they couldn't walk the full round.
Some have operated with a strict adherence to their interpretation of the executive orders. There were initially no carts, including for food and beverage, at Shepherd's Hollow, Pine Trace and Cherry Creek golf clubs, said Mike Bylen, managing partner of the courses.
"We were forced to close down when we would normally be opening up, in a springtime where we were experiencing better weather than we had in the past several years," Bylen said. "So you can imagine, we lost revenue."
He said that although the restrictions are bad for business, slowing down a bit could be good for the sport.
"I think more people are rekindling their love for the game because there's not a lot to do right now," he said.
"course" - Google News
May 08, 2020 at 10:23PM
https://ift.tt/3cf92TG
Coronavirus threatens to hollow out Michigan's $4.2 billion golf industry, but course owners see hope - Crain's Detroit Business
"course" - Google News
https://ift.tt/35q9ps5
https://ift.tt/35rCFi1
Bagikan Berita Ini
0 Response to "Coronavirus threatens to hollow out Michigan's $4.2 billion golf industry, but course owners see hope - Crain's Detroit Business"
Post a Comment