Huffman: Arizona golf industry braces for slump - East Valley Tribune: News

Huffman: Arizona golf industry braces for slump

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Posted: Wednesday, October 29, 2008 8:54 pm | Updated: 11:51 pm, Fri Oct 7, 2011.

Tom Patrick is the E.F. Hutton of Arizona golf. When the founding father of the state’s watchdog Golf Industry Association speaks, people listen.

CAPTION

Actually, Patrick, who is the vice president of SunCor Golf, which owns seven courses in Arizona and one in Utah, might scoff at such a moniker, given the state of Wall Street. But he is dead serious when asked for his assessment of golf in the Grand Canyon State.

“I’ve talked to a bunch of (industry) people, and it’s pretty much the same,” Patrick said with a sigh. “Everything was going along pretty well, even this summer, and then it was like someone turned the switch off Sept. 1.”

Golfers who had been playing the state’s 330-some courses “just fell off the earth,” Patrick said. As the economy began to tank big-time, so did most facets of the game as it relates to Arizona.

It wasn’t just a drastic reduction in tee times, Patrick added. Everything from instruction to charity tournaments to food and beverage went dark. Even weddings — a golf course staple at many high-end courses — quit walking down the aisle.

“Absolutely the perfect storm,” Patrick said. “No one could have dreamed this up.

“And here comes our peak season — January, February, March and April, when we make 60 percent of the money from our golf courses — and, well, it’s not good.”

It’s a theme I’m hearing from every corner of the state from every type of golf course. Some in the business of golf have told me privately they are expecting a down year they hope will only be 5 to 10 percent off from years past. Others are predicting worse.

“I’m guessing 10 to 20 percent (off), maybe slightly higher,” Patrick said. “That’s about what the hotels are off in terms of advanced bookings, and that’s usually a pretty good indicator.”

But there’s another factor that looms large in this emerging gloomy global economy.

“I look at the numbers at Sky Harbor (International Airport),” Patrick said. “In 2007, Sky Harbor did 42.2 million passengers, and ’07 was a pretty good year (for Arizona golf).

“In 2009, they’re forecasting 37 million passengers, which is a major drop of 5.2 million passengers. Let’s face it, when people don’t have money, they don’t fly — especially to play golf.”

Despite the negative numbers, Patrick said he doesn’t think Arizona will get hurt as bad as other major golf destinations. After all, Arizona has 330 days of annual sunshine, and that is one of the state’s greatest lures.

“We’ve got snowbirds, and they’ll come, although the Canadian dollar has been a little shaky lately,” he said.

“But the key is going to be the locals, which is a group of golfers we need to pay a lot more attention to than ever before.”

Still, and despite ridiculously low green fees already popping up lately in the West Valley, Patrick doesn’t expect a price war to break out. That’s because costs for rye seed are way up, water has never been more expensive, and maintenance costs are running through the roof after a mass exodus of undocumented workers back to Mexico.

“If people don’t come out to play, the courses will just go broke,” Patrick predicted. “In fact, that’s why so many are up for sale right now, even being foreclosed on — and you’re going to see more of that.”

Case in point: Starfire Golf Club in central Scottsdale went on the auction block this week for $8.5 million.

In another statement on the economy of Arizona golf, Royal Dunes, the former all-men’s club in Maricopa originally named Southern Dunes, completed its foreclosure on Wednesday when it was returned to lender Duane Young of Palm Springs, Calif.

Rumor on the street is the course is going to shift from private to public. (And, yes, women will be able to get a tee time there for the first time.)

“The golf industry is like everybody else,” Patrick said. “Things are not good, and until the banks loosen up some money, it’s going to get worse.”

Meanwhile, Patrick said, the golf industry is bracing for that perfect storm.

“You’re already seeing it,” he said.

“In places like Las Vegas, which really is getting hammered, they’re cutting back on everything, even the size of the courses by taking out turf.”

Here in Arizona, Patrick said owners are doing whatever they can, but mostly it’s been related to the cost of labor, at least so far.

“I’d say that 25 to 30 percent of (the labor force) in Arizona has lost their jobs, and that’s from our core list of workers — maintenance, food and beverage, and pro shop personnel,” Patrick said.

“For instance, we usually have 24 maintenance employees at SunRidge Canyon (in Fountain Hills), and we’re down to 15 to 16 with some part-time employees that are used only when we need them.”

So it goes, as Patrick and the rest of the Arizona golf industry hope for the best in these worst of times.

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