Price leader buys Strand golf courses

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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Tourism picking up, but real estate lags on Strand

Economic recovery is under way along the Grand Strand, but expect tourism to bounce back before real estate does, said Robert Salvino, a research economist at Coastal Carolina University.

"In housing, it will be years before we get to the [pre-recession] level because it was an unprecedented upturn," Salvino said at a university event Tuesday morning. "That recovery will just take some time, but it is there. It's just slowly coming. Tourism, I think, will get back to a normal pace much quicker."

Salvino offered his latest predictions for the regional Waccamaw Council of Governments -- which includes Horry, Georgetown and Williamsburg counties - at the Waccamaw Higher Education Center in Litchfield Beach.

Hotel occupancy is expected to rise 1.7 percent this fall and 0.4 percent this winter, compared with the same seasons last year, Salvino said.Occupancy increased 7.6 percent during the summer. Room rates at hotels rose 1.6 percent during the summer, and will continue to rise through the off-season with a 3.3 percent rise projected for fall and 2.7 percent for winter.

How far the hospitality industry has rebounded depends on how you measure it, Salvino said.

Revenue per hotel room has already returned to pre-crash levels, but tourist spending has been slower to catch up, he said. Retail sales in 2007 were $1.1 million and fell to about $929,000 in 2009 and were up to $972,000 by 2010. At this rate, tourist spending will be 90 percent recovered by summer 2011 and fully recovered by 2012, Salvino said.

In real estate, building permits issued in Horry County have been flat from 2008 to 2010, he said. The number of permits for single-family homes is far from what it was during the boom years earlier this decade, Salvino said. For example, the U.S. Department of Commerce recorded 575 building permits in Horry County in July 2005 but only 90 in July 2010.

Because construction contributed so much to the economic boom, a weak real estate sector will hold the overall economy back from reaching pre-recession peaks, Salvino said.

The real estate market could rebound in 12 to 14 months, provided banks loosen their lending standards and foreclosures go away, but both of those factors are uncertain, said Tom Maeser, a real estate analyst with the Coastal Carolinas Association of Realtors, after the event.

Even if the area returns to the number of homes and condos that were being built or sold during the boom, the properties may not fetch pre-recession prices, he said.

Other recovery indicators, such as consumer confidence, have remained flat, Salvino said.

The amount of shipping through the Port of Georgetown also remains down and that's not likely to change unless the port is dredged, he said. Even if the Georgetown steel mill reopens in 2011 as ArcelorMittal representatives say it will, that is unlikely to make a large difference in the amount of goods that go through the port, he said.

Salvino's biggest message was that the economy will remain relatively flat in the near term, said Tim Tilley, president of heating and cooling engineering firm EnviroSep.

Tilley was one of a handful of businessmen in an audience of mostly academics and municipal and county employees. About 30 people attended the event.

The economy needs to diversify beyond tourism and real estate to get beyond the flat projections, Tilley said.

"We need diversification in the area in the form of manufacturing and engineering resources," he said.

Diversification is a slow process and there's no clear route for the region, which is at the whim of entrepreneurs, Salvino said.

The Waccamaw Regional Council of Government's Economic Outlook Board will next meet in February to renew its forecasts.

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Grand Strand rated one of worst beaches by National Geographic

A panel of 340 tourism authorities has ranked the Grand Strand among the least sustainable coastal destinations in the world, according to a report by National Geographic Traveler magazine.

The Grand Strand was listed as the eighth worst out of the 99 destinations rated. The area tied with three other destinations in Vietnam, Lebanon and Spain.

The report comes after a string of positive ratings from national travel media so far this year. In August, National Geographic ranked Myrtle Beach as having the third best boardwalk in the United States.

"We had the worst coastal destination but they said we had a third best boardwalk in the nation," said Mayor John Rhodes of Myrtle Beach. "You praise one side but you criticize the other."

Earlier this year, travel website TripAdvisor listed Myrtle Beach as the top beach destination in the country and USA Today ranked the area as a Top 5 Affordable Destination.

The latest National Geographic ranking is based on stewardship and integrity of a destination, and the survey of experts was conducted by National Geographic Society's Center for Sustainable Destinations. The results appeared in the November/December issue of National Geographic Traveler.

The destinations were rated on the following criteria: environmental and ecological quality, social and cultural integrity, condition of historic buildings and archaeological sites, aesthetic appeal, quality of tourism management and outlook for the future.

The report criticizes the area's over-development, with one critic calling it, "the definition of unsustainable." But state parks in the area are worth visiting, it said.

Rhodes said he agrees that the city has built more hotels than it needed, but that's being corrected as the economy and business picks up. The experts are mostly academics and travel writers and don't understand how the resort business works, he said. The area had an 8 percent rise in hotel occupancy this summer and is the envy of the travel industry, Rhodes said.

Individual comments made by the experts were kept anonymous although the names of some panelists are listed in the report, including academics, travel journalists and consultants. One comment states:

"A tourism disaster. After my first visit, I vowed never to return. Development is rampant and feels out of control. The quality of attractions is terrible. Uber-consumerism is everywhere. However, the region around Myrtle Beach has lovely state parks, beach areas and some small villages. If I were to ever be coaxed back to the region, that is where I would spend all of my time."

Brad Dean, president and chief executive of the Myrtle Beach Area Chamber of Commerce, said he's skeptical of the findings of a survey that keeps comments anonymous.

"A true academic or expert wouldn't be ashamed to put their name with their opinion," he said.

The National Geographic report stated the comments were kept anonymous so that experts would give objective opinions.

The survey wasn't all bad, Dean said, and does mention that the beaches are clean and that there's affordable retail. The comments referred negatively to cheap T-shirt shops and miniature golf in Myrtle Beach.

"The reasons they chide us are some of the very reasons some visitors come here," Dean said.

Some conservationists may have preferred if nothing were built here, but that would leave no room for business, Dean said.

Mistakes have been made with past developments, but Myrtle Beach is more sustainable than other South Carolina destinations, such as the Hilton Head Island area, which were not in the ranking, said Dana Beach, executive director of the Coastal Conservation League. The Hilton Head area has less sustainable roads and more past problems with pollution, he said.

Too much has been built too close to the ocean along the Grand Strand, but the true test for the area is if it develops sustainably in the future, Beach said. Instead of pursuing large road projects such as Interstate 73 or new roads for the Southern Evacuation LifeLine, existing roads should be improved, he said. Because building has been mostly halted because of the poor economy, lawmakers should take time to revisit zoning rules and ensure that developments aren't built that would affect waterways or other sensitive areas, he said.

"It's a challenge to Myrtle Beach to prove them wrong," Beach said.

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Grand Strand rated one of worst beaches by National Geographic

A panel of 340 tourism authorities has ranked the Grand Strand among the least sustainable coastal destinations in the world, according to a report by National Geographic Traveler magazine.

The Grand Strand was listed as the eighth worst out of the 99 destinations rated. The area tied with three other destinations in Vietnam, Lebanon and Spain.

The report comes after a string of positive ratings from national travel media so far this year. In August, National Geographic ranked Myrtle Beach as having the third best boardwalk in the United States.

"We had the worst coastal destination but they said we had a third best boardwalk in the nation," said Mayor John Rhodes of Myrtle Beach. "You praise one side but you criticize the other."

Earlier this year, travel website TripAdvisor listed Myrtle Beach as the top beach destination in the country and USA Today ranked the area as a Top 5 Affordable Destination.

The latest National Geographic ranking is based on stewardship and integrity of a destination, and the survey of experts was conducted by National Geographic Society's Center for Sustainable Destinations. The results appeared in the November/December issue of National Geographic Traveler.

The destinations were rated on the following criteria: environmental and ecological quality, social and cultural integrity, condition of historic buildings and archaeological sites, aesthetic appeal, quality of tourism management and outlook for the future.

The report criticizes the area's over-development, with one critic calling it, "the definition of unsustainable." But state parks in the area are worth visiting, it said.

Rhodes said he agrees that the city has built more hotels than it needed, but that's being corrected as the economy and business picks up. The experts are mostly academics and travel writers and don't understand how the resort business works, he said. The area had an 8 percent rise in hotel occupancy this summer and is the envy of the travel industry, Rhodes said.

Individual comments made by the experts were kept anonymous although the names of some panelists are listed in the report, including academics, travel journalists and consultants. One comment states:

"A tourism disaster. After my first visit, I vowed never to return. Development is rampant and feels out of control. The quality of attractions is terrible. Uber-consumerism is everywhere. However, the region around Myrtle Beach has lovely state parks, beach areas and some small villages. If I were to ever be coaxed back to the region, that is where I would spend all of my time."

Brad Dean, president and chief executive of the Myrtle Beach Area Chamber of Commerce, said he's skeptical of the findings of a survey that keeps comments anonymous.

"A true academic or expert wouldn't be ashamed to put their name with their opinion," he said.

The National Geographic report stated the comments were kept anonymous so that experts would give objective opinions.

The survey wasn't all bad, Dean said, and does mention that the beaches are clean and that there's affordable retail. The comments referred negatively to cheap T-shirt shops and miniature golf in Myrtle Beach.

"The reasons they chide us are some of the very reasons some visitors come here," Dean said.

Some conservationists may have preferred if nothing were built here, but that would leave no room for business, Dean said.

Mistakes have been made with past developments, but Myrtle Beach is more sustainable than other South Carolina destinations, such as the Hilton Head Island area, which were not in the ranking, said Dana Beach, executive director of the Coastal Conservation League. The Hilton Head area has less sustainable roads and more past problems with pollution, he said.

Too much has been built too close to the ocean along the Grand Strand, but the true test for the area is if it develops sustainably in the future, Beach said. Instead of pursuing large road projects such as Interstate 73 or new roads for the Southern Evacuation LifeLine, existing roads should be improved, he said. Because building has been mostly halted because of the poor economy, lawmakers should take time to revisit zoning rules and ensure that developments aren't built that would affect waterways or other sensitive areas, he said.

"It's a challenge to Myrtle Beach to prove them wrong," Beach said.

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