Finding A Hook
Golfing's demographics are changing -- and developers are responding.
"You couldn't build a new large-scale community in areas like Palm Beach County without golf," says Mike Donnelly, vice president of Toll Brothers in Delray Beach, which has included a number of Arnold Palmer signature courses in its Florida developments.
But the industry has struggled over the past few years. While the number of U.S. golfers has remained fairly constant at about 25 million to 27 million, according to the National Golf Foundation in Jupiter, actual demand, as measured by rounds played, has declined slightly over the past three years.
As golfing demand has fallen, the number of new courses being constructed has slowed in Florida and across the nation as well, according to statistics from the foundation. While nearly 400 new U.S. courses were built in 2000, just 171 came online in 2003 -- a declining trend that is likely to continue next year.
Suitable golf course locations are getting harder to find, especially in urban counties. In the Boca Raton market, for instance, there is simply no land available to build a course. "Basically, supply is coming in line with demand," says Jen Amos, spokesperson for the foundation.
In Florida, it appears that 2000 was the peak year for the golf industry, with the opening of 41 new courses. Then came a national economic downturn followed by 9/11, which seriously hurt the state's tourism industry in the winter 2001-02 season.
"Golfers tend to play less when times are tougher," says consultant John Rossi, president of Rossi Associates in Palm Beach Gardens. "It appears that demand might be improving now, but an improvement will be a slow process."
To thrive, golf course developers must cater to younger golfers with family obligations who can't play as frequently as retirees. "The challenge," says Rossi, "is recognizing the changing demographics of people moving to Florida and creating facilities that relate to this new group."
At one extreme are clubs that offer low annual dues with no equity membership. "This brings in the members," says Janet Dugan, a real estate associate at Coldwell Banker's St. Armand's Circle office who specializes in Sarasota golf communities. "But there is a maximum of 288 people who can play an 18-hole course in one day. So if a club has 900 members, you might be able to play twice a week at less than ideal times."
On the opposite end are private clubs that set strict membership limits but require a six-figure equity. Residents can play all they want and enjoy the prestige of an exclusive community -- as long as they can afford the price. In Naples, for example, some golfers pay well over $100,000 for memberships at private clubs.
"The golf business is tough," says Donnelly, VP at Toll Brothers. "You have a fine line to walk between providing the right services and amenities and watching the bottom line. You can have all the amenities and services, but there is a cost associated with them."
Many developers are adjusting to the changing dynamics by diversifying the amenities associated with golf club communities. Once unseen at golf clubs, large-scale fitness centers and social programs for non-golfing spouses and children have become par for the course. "It's a whole lifestyle," Donnelly says. "Members want to be able to stay in their own community and go to dinner, have their nails done and work out at the fitness center."
And not all golf course community home buyers are interested in playing golf. "Many people don't care about tee times. They just want to walk on the course in the evening," says Bill Coffey, a broker-manager at Coldwell Banker's in Naples. "Others are looking for an investment, and the homes that have increased in value most quickly in Naples are either located near the beach or in a golf course community."
The next round
Today's more conservative approach toward new golf-oriented developments may pay big dividends in the next decade as the first wave of affluent Baby Boomers reaches retirement age. There's no denying the timeless appeal of golf as a Florida pastime.
As Dean Sklar, a golfer and Coldwell Banker agent in Weston, says: "When you drive into a golfing community, it's like entering paradise. A golf course adds value and prestige to the homes, and it certainly appeals to the buyer."
Adds Rossi: "Florida is still the golfing capital of the U.S."
Lewis M. Goodkin is president of Goodkin Consulting, a Miami-based firm that has a strategic alliance with URS Corp., one of the world's largest design and engineering consulting firms.