Golf Prices Hold Steady As Supply Growth Paces Demand

While rising demand from both groups and leisure guests has allowed many resorts to boost their room rates, resort greens fees and group golf tournament costs are more stable. A broadening of activity preferences among meeting attendees and a proliferation of new golf courses in many resort destinations appear to be keeping the cost of golf at par.

"Golf pricing is holding very steady—it's about keeping pace with the general inflation rate," said Tom Pasha, executive director of the Orlando-based Golf Event Managers Association. "Demand for golf is coming back strong after two very difficult years, but everyone is still cautious."

Although the recent rebound in corporate meetings and leisure tourism means increased golf business for resorts, many resorts also face mounting competition from dozens of new daily-fee golf courses eager for business. "Golf courses have been built all over the place in recent years, partly because people thought that the Tiger Woods phenomenon would inspire a huge new audience for golf," Pasha said. "It didn't happen. There simply has not been the increase in new golfers to match all the new supply."

As a result of increased golf course supply, some meeting planners find it worthwhile to shop around for good deals with offsite golf courses, rather than automatically contracting for golf at the property where the meeting is based, according to Nina Renaud, principal with Corporate Golf in Durham, N.C.

"It can make sense to go offsite and we're seeing more groups do this," she said. "Often, a famous golf resort is in an area where there are many daily-fee courses that cost far less than the resort course, even factoring in the guest discount. All of this depends on the area. Places such as Scottsdale and Pebble Beach have a lot of alternatives to resort courses. However, in the Northeast, where golf courses are crowded, the resort course is probably the best option."

Like Pasha, Renaud believes that golf costs will remain flat in the year ahead. "Golf costs do not fluctuate the way room rates do," she said. "There was not much discounting that went on in golf even when times were bad."

Renaud also observed that the improving economic scene means that more companies now are more likely to spend money on golf than they were a year or two ago. "Companies are still cautious, but they are more willing to buy peripherals," Renaud said. "They're spending more on gift items and are more likely to book a celebrity golf pro for the group.

Demand for golf during corporate meetings this year is up at the La Quinta Resort & Club, a resort hotel near Palm Springs, Calif., with five golf courses on site, but a spurt of new golf courses in the area is keeping pricing flat at the resort, said director of golf sales Jeff Zamenski. "Five new golf courses are opening in the Palm Springs area this year and seven or eight have opened in the past few years," he said. "After 9/11, a lot of groups began shopping around and taking their golf off property. Now, more are keeping their golf here, but things are still very competitive."

Another trend that emerged after Sept. 11, 2001, is companies abandoning golf tournaments in favor of giving attendees the option of scheduling either a round of golf or spa treatment. "Tournaments have started to come back, but the trend is still for groups to choose the individual activity approach," Zamenski said.

Under this scenario, the resort golf course ends up competing not only with offsite courses, but with other aspects of the resort, Zamenski added. "We used to be strictly a golf resort, where everything revolved around golf," he said. "Now, we have competition from other activities – especially from our spa, which has been very popular since it opened a few years ago. Some people who once participated in tournaments, even through they're not avid golfers, now go to the spa instead."

Similarly, Rick Nagaoka, director of sales and marketing for the Mauna Kea Beach Resort and Hapuna Prince Resort on the Big Island of Hawaii, said that corporate meeting attendees are increasingly choosing activities other than golf. "Golf is still the top activity here, but it's not as popular as it once was," he said, adding that changing demographics are the likely cause.

"Older people still favor golf, but younger people have a mixed bag of interests," Nagaoka said. "They want to get out and hike, have some adventure The spa has also become more popular and not just with women. It used to be that the husband would play golf and the wife would go to the spa. Now, they are going to the spa together."

He also believes that the proliferation of new golf courses is another factor. "Now that people have more opportunity to play golf close to home, they want to do something different in Hawaii," he said. "Plus, more people are bringing family along to meetings and the family may not play golf."

Although some 90 percent of the groups meeting at the Doral Golf Resort in Miami include golf, director of sales and marketing Chris Bielski also acknowledged that golf no longer is the only game in town at the 650-room property which features five onsite golf courses. The Doral's spa and offsite activities such as sports fishing or Everglades tours have emerged as alternative options in recent years. "We're seeing more demand for golf this year because we're getting more groups who had cut back on going to resorts," the Doral's Bielski said. "However, people want a broader variety of activities than they once did. They are less likely to come here only for golf."

Onsite golf also can be a money-saver, according to Bielski. "With smaller groups of 50 or less, we tend to package golf in with rooms and food and beverage. It's packaged so that attendees can be offered a choice of golf or spa. The price point is about the same, so it works out well." For larger groups, golf tends to be contracted separately. "They get a discount too, but it's not packaged in with the overall price," he said.

Along with improving demand from corporate groups, resorts also are finding that negative perception issues that used to surround golf are abating. Zamenski said it was not unusual during the post-9/11 period for companies that held meetings at La Quinta to ask the resort not to bill golf to the master account. "Instead, attendees would pay for their own golf rounds at the pro shop and then expense it once they got back to the office," he said. "This is happening much less now and even golf tournaments are no longer viewed as frivolous. They're looked on as a teambuilding experience."