Research assistance by David Yochum

 

 

The Territory’s Director of Golf/GM Tim Johnson (ABOVE) and his team have turned land where buffalo once roamed into a Top 10 course where you can get a great filet (TOP).

Tim Johnson, Director of Golf/GM at The Territory Golf and Country Club in Duncan, Okla., took a call recently from a woman in New England who had grown up in Oklahoma and was interested in relocating there for her retirement. So interested, in fact, that she told Johnson she was ready to send a check for the amount she figured would be needed, based on her East Coast perspective of real-estate values, to secure a lot on the club property. After Johnson heard the amount she was ready to pay, he asked in all seriousness if she wanted one lot, or two.

The story captures several trends now in the wind that stand to shape the future of the club and resort industry, which continues to brighten considerably overall.

In a year that brought the news that the U.S. population had reached 300 million—and the even more shocking projection that it will now take less than 35 years to get to the 400-million mark—the population-density charts issued with those reports look like a clumsily executed Jackson Pollock-style painting. Some areas are splattered so completely, it wouldn’t seem possible to drop in even one more dot representing one more person. At the same time, vast sections of white space just beg for something to be thrown their way.

As the American canvas fills in with the next 100 million people, more opportunities for club and resort growth will certainly be created in the already-congested areas as they continue to swell. There will also be a place for new clubs like “The Territory” (fittingly, it markets itself by the shorter name), built on land that still looks pretty much as it would have when it was populated by herds of buffalo.

Happy Homecomings
The projections of where housing will be built to accommodate all the extra people (see chart above) still reflect the migration patterns that marked the march to 300 million, with much heavier activity in the West and South over the Northeast or Midwest.

But as technology makes it more possible to work, or live, pretty much anywhere you choose and still be in close touch with the rest of your family and the world, sociologists predict that more Baby Boomers will start thinking like the woman who called Tim Johnson.

Whether they’re ready for full retirement or not (and many won’t be, given their debt loads from putting kids through college), many Boomers are expected to become less interested in spending the next phases of their lives in traditional Sunbelt communities. For one thing, many of those areas have become crowded and expensive—enough to diminish their initial appeal, no matter how good the weather may be (although global warming may even turn that benefit into an oppressively hot and dry detriment, at the same time it makes other regions more inviting).

As these factors detract from traditional retirement areas, the nostalgic pull of memories from the simpler times and places of their youth may make more Boomers gravitate back to the less crowded areas they came from. Areas with colleges, other entrenched institutions or businesses are expected to be especially appealing because they can offer stimulating activity and the availability of better health care.

And when the Boomers learn just how much they might be able to cash in on their existing home equity by making such a move, the pull may prove to be irresistibly magnetic.

Fleeting Loyalties?
Established club properties may feel they have some degree of protection against this trend because of the foothold they’ve already gained with their existing memberships. But here, too, a significant shift in once-solid sentiment may be taking shape. As the chart below shows, “members for life” is becoming a more elusive concept when even die-hard golfers show a greater inclination to depart from existing club loyalties and lifestyles.

But certainly, having the U.S. population grow by another third in the next 33 years will make it easier to find replacements for any members who may choose to move on. For the properties already in the most congested regions, the appeal of club membership, especially if a full menu of family-oriented services and activities is offered, will only stand to get stronger as the need to find reliable places of refuge intensifies.

In all parts of the country, as the population pool continues to deepen, the connection between golf courses and housing will only tighten further. That’s good for the industry in two ways. Courses that just aren’t cutting it (and there are still more than a few of them out there) will fall out of the picture entirely, so the land can be used solely for its much greater real-estate value. This will further reduce the club surplus that still lingers from the ’90s boom.

Secondly, in the areas where developers are serious about building real communities, and not just squeezing as many units as possible into a parcel, the club business will have the inside track to a vast number of new homeowners.

Bringing San Fran to the Sooners
Even with the bigger numbers and all of these positive trends, making it in the club business won’t be as simple as just being there.

Here again, the story of “The Territory” offers some very instructive lessons. The club earned a Top 10 spot on Golfweek’s Best New Courses list this year, right up there with the Bandons and the Trumps, and ahead of many properties in much more glamorous and accessible locales. But even with this major achievement, it has been anything but easy for The Territory to put itself on the map.

Tim Johnson, in fact, candidly admits that when the club opened for business, it did not exactly spark another Oklahoma land rush.

“This is rural America,” he says. “We don’t have the luxury of thousands of prospective members from large cities or mainstream suburbia. One of the largest hurdles we’ve had to overcome was the sticker shock of an initiation fee, even though ours is relatively small ($6,000) and our monthly dues are only $300. We also underestimated how loyalty to small-town clubs makes people [hesitant] to leave, because they feel they’re deserting their roots.

“Never in my wildest dreams would I have expected it to be so hard to sell memberships when fees and dues were much lower than anywhere else I’ve been,” says Johnson, who previously worked in large markets like Arizona and Dallas, and for leading operators like Omni Resorts.

Endearing Qualities
Today, while The Territory is still not yet halfway to its cap of 450 golf memberships, it stands as a good example of what’s now needed to guide a club or resort property, old or new, to success in what is still a crowded and churning industry.

To begin with, the club has shown the value of not setting limitations on what might be possible, no matter where a property is located. Even while waiting for membership to reach the level that will allow construction of its full clubhouse to begin, The Territory hasn’t held back on its food and beverage offer.

 

Tom Wheary, President of Golf Strategies, didn’t understand why Pennsylvania’s popular Jack Frost ski area had never offered golf, too—but he’s well on his way to changing that.

Johnson brought in Tristan Peck, a graduate of the San Francisco School of Culinary Arts who was interested in returning to his native Oklahoma, to become the club’s Chef and F&B Manager. Already, they’ve had success building business at the comfortable but casual Territory grille (see photo, pg. 12), where diners can now look out at where the buffalo once roamed while enjoying good wines and dishes like harvest duck salad, pan-seared Bombay salmon, or a premium beef tenderloin filet (choice enough to command a $28 check).

“We’ve been white-tablecloth, with an emphasis on service, right from the start,” says Johnson. “As the word gets out, we’re gaining new business and repeat customers. We think it’s already the best restaurant within 100 miles.”

Similarly, The Territory hasn’t restricted itself while building up its pro shop. Items like bath salts, lotions, bracelets, watches and purses have all had appeal to local women, Johnson reports, and all higher-end apparel has done better than expected. “We’ve found that, even in this kind of location, if you give people a reason to come out and shop, they will,” he says.

Perhaps the most essential qualities for success to be found at The Territory, though, are patience and a long-term perspective. The club’s owners, Rick and Barbara Braught—born-and-bred Sooners with roots in the oil business—are clearly in it for the long haul, with a stated goal of making the club a catalyst for “longevity and prosperity” in that part of Oklahoma.

For Johnson, this has been invaluable in helping him get through the early rough spots. “There were certainly days where I thought, ‘God, we’re not going to be able to keep the doors open,’ ” he admits. “But having ownership that understands you can’t put a timeframe on these things, especially in a rural area like this, has certainly been a welcome change from the usual ‘OK, Tim, we’re up and running—now I need $20,000 in outings [revenue] every Monday.’

“By avoiding that kind of panic, now we’re seeing the benefits,” he notes. “The golf course hasn’t been ruined [from too much traffic too soon], and every revenue category is growing.”

Since You’re Already Here…
The alternative to the build-it-and-get-them-to come strategy is to go where they already are, and see if you can do something different to get their attention. An interesting example of this approach is taking place in Pennsylvania’s Pocono Mountains, where Golf Strategies, LLC, a Florida-based golf management company, is developing a new course, Jack Frost National Golf Club, for a major real estate firm in the area.

 

Hershey (Pa.) Country Club is bustling again, after an $18 million renovation that typifies how even well-established clubs have responded to the need to expand and upgrade to stay competitive.

Jack Frost has long been a popular skiing spot, but no one had ever tried to put a warm-weather recreational option on the property. It wasn’t easy to carve out a course from the dense woods and rocky terrain adjacent to the slopes, especially with periods of intensely wet weather during the construction. But when the course—scheduled for official opening next spring—was previewed this fall, the almost universal reaction to its scenic and challenging holes (some featuring elevation changes of up to 100 feet) was, “Why didn’t anyone do this before?”

Beyond luring people who know the area for its skiing and would like to either return there for summer activities, or relocate there permanently, a development like Jack Frost also has real potential for attracting regular play from the millions of golfers from southern New England to Washington, D.C., who could get to the course with a relatively easy drive.

The clubs that stand to lose rounds from this kind of new competition certainly aren’t standing around idly, either. They’ve recognized the need to fight back with improvement and expansion projects for their facilities, as well as their program offerings.

For example, well within the area from which Jack Frost National could draw golfers is the venerable Hershey (Pa.) Country Club. Built in 1930—and home of Ben Hogan as a club pro for 10 years—the club fell off its game in the 1990s.

But after being reacquired in 2002 by Hershey Resorts, the property has gone through an $18 million improvement project, which it unveiled this spring. The renovation not only upgraded the clubhouse (see photo, above left), but also created an impressive new pool complex, a banquet pavilion, and a spanking new kitchen for the new Executive Chef, Michael Collier, whose experience is not with other clubs, but with Disney and ESPN Zone restaurants. All of these efforts reflect the trend toward emphasizing family activities and aggressively expanding beyond traditional club revenue streams.

In the following pages of this special State of the Industry issue, we offer more examples of how club and resort properties, old and new, have executed similar strategies in all facets of their operations to either establish, or solidify, their appeal. In all cases, the emphasis is on expanding beyond the usual offers and presenting a fresh, more well-rounded face to members and guests.

All this work can’t get done fast enough. Afterall, there are soon going to be a lot more faces for everyone in the business to see.