Grand Strand golf course operators hoping to soon be relieved of the pricing pressure placed on them by Century Golf Partners are disappointed today.
The company, which for the past 17 months has managed five Strand courses previously owned and/or operated by Legends Group, has purchased four of the courses and a lease agreement for the fifth from General Electric Capital Corp.
Century Golf's management has been characterized by special programs for local residents and low pricing that includes a current afternoon rate of $32 for 18 holes of golf, a cart, breakfast, lunch and two beverages.
"[Century] has definitely driven this market," said International Club of Myrtle Beach head professional and General Manager Jamie Roderick. "They've driven this market way down, and I think it's going to be tough to drive it back up. They're kind of in the dealer's seat and people have to react to them."
According to Century Golf Partners Chief Executive Jim Hinckley, the company now owns Heritage Club in Pawleys Island and three courses at Legends Resort off U.S. 501 in Myrtle Beach - Heathland, Moorland and Parkland - and has acquired a long-term lease to operate Oyster Bay Golf Links in Sunset Beach, N.C.
Century is headquartered in Dallas and owns Arnold Palmer Golf Management, which has been managing the five courses since August 2009. The pricing strategy at its five Strand courses isn't likely to change.
"I think our business and marketing strategies will remain consistent," Hinckley said. "I think we wanted to put some programs in to attract local golfers, and I think we've been successful."
Prior to the rates instituted by Century Golf Partners, the five courses were priced among the top 30 percent of the nearly 100 public Strand courses. Century Golf's prices combined with the amenities offered immediately placed them among the best values in the market.
"We've had to come up with our own specials to try to get players on the course, though not as deliberate as they have. They're kind of throwing the kitchen sink at you," said Roderick, whose course has offered a special that includes lunch. "We lowered our rates easily between $10 and $30 in October alone compared to what we were expecting to have as our rates this year. ... That's a lot of money, but it's the only way to survive."
Century Golf introduced a Players Club at Legends Resort in the fall of 2009 that has attracted between 600 and 700 members, according to first assistant Matt Veltman. For $35 a month and a six-month commitment, players get unlimited use of the driving range, $18 for golf and a cart after 1 p.m., two free one-hour clinics per week, and a dozen Pro-V1s at sign-up.
The current price for 18 holes of golf, a cart, breakfast, lunch and two beverages is $35 in the morning, and is $3 less for players age 60 and older. The courses offered free replays after 5 p.m. this summer.
Legends Resort head pro Matt Biddington won the Carolinas PGA's 2010 Resort Course Merchandiser of the Year award, and cited the significant increase in traffic at Legends brought on by the special pricing as a contributor to his success.
"We felt we had the best package of the 100 or so courses in the area, and I think the market agreed with us," Biddington said.
Strand course owners and operators, who have been dealing with a decrease in total rounds played on the Strand every year from 2004-09, had hope in October that new owners might change pricing strategies.
Billy Casper Golf officials met with employees at the courses in advance of an expected purchase by investors who were going to hire the company to manage the properties. But the deal fell through, and Century acted. Century owns 45 of the 66 courses it manages throughout the U.S.
"We've always liked the golf courses, and when we had the ability to purchase we jumped right on it," Hinckley said. "We're excited about it. They are great golf courses, we've got a great staff there and we're happy with the performance so far, so we're happy to be part of the Myrtle Beach community."
Century partnered with Peter Ueberroth and private equity firm Contrarian Group to secure their ownership interest. Hinckley said terms and the purchase price were part of a confidentiality agreement with GE Capital.
GE Capital foreclosed last year on the four S.C. courses and Oyster Bay lease. GE's bid of $10 million for Heritage Club and $33.5 million for the Heathland, Moorland and Parkland courses at Legends Resort held up at auction in July 2009. GE purchased the Oyster Bay lease in a foreclosure sale in June 2009.
Court documents show GE was owed more than $52 million by Legends Group for the four courses and Oyster Bay lease that runs through 2032.
The Contrarian Group is a private equity firm with extensive experience in the lodging, hospitality, travel and golf industries. Ueberroth, chairman of the firm, previously served as commissioner of Major League Baseball, chairman of the U.S. Olympic Committee and chairman of the 1984 Los Angeles Summer Olympics.
"Peter has been a friend for a long time," Hinckley said. "We want to continue to invest together in the golf arena, and we felt Myrtle Beach was a great place to start."
Century Golf Partners also recently entered into marketing agreements with Woodland Valley Country Club in Loris and Wedgefield Plantation and Golf Club in Georgetown. Those courses now run golf-food promotions similar to those at the other five former Legends Group courses.
"In this competitive marketplace their pricing strategy has definitely driven other courses to lower their rates to stay competitive," said Tommy Smothers, general manager for Classic Golf Group, which manages five Strand courses. "Whether they like it or not, it's something they've had to do."
Hinckley intimated the company might not be done making acquisitions in the Myrtle Beach market. "As a company we're growing nationwide," Hinckley said. "We're going to continue to evaluate the market opportunities. We're very pleased to have a permanent place in the marketplace and excited about the opportunities."
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