After the financial market crisis erupted in late 2008, and the AIG incentive controversy then blazed through the media and Washington, DC, meeting groups promptly pulled golf events off their programs if they didn't eliminate their confabs altogether. In the great fallout of 2009, golf resorts, especially luxury ones and some of the most famous in the country, suffered.
As one resort executive in the golf mecca of Florida puts it, "Golf went from one of the most valuable revenue generators to an absolute liability." Another golf hospitality veteran, who was working in Colorado at the time, adds, "I fielded lots of cancellation calls because of the perception problem. It was tough for the luxury market."
Coupled with the recession, last year was a huge hit to group golf and spa, says Jason Parsons, general manager of the Naples Beach Hotel & Golf Club. Around the country, golf resorts saw cutbacks, many courses closed, while countless others sustained themselves on leisure business from the hardcore enthusiasts. One casualty was the PGA Tour Spa Laterra at the World Golf Village in St. Augustine, FL, forced to close last November.
However, the Spa Laterra reopened last month, and it is a microcosm of a business recovery occurring at golf resorts across the country. As golf properties and destinations are fighting their way out of the proverbial sand trap, groups are returning not only because the anti-meetings fervor has dwindled but also because they have come to realize that golf is a meaningful business driver, especially as incentives. That has golf hospitality executives gauging a robust rebound in 2011.
Still, group golf, like most other post-AIG, post-recession meeting line items, is showing more austere proclivities. "We're still seeing tournaments, but they're smaller and there is less catering," says Parsons. "There may be a breakfast before or a small reception afterward, but there is no open bar. There is not as much fanfare and hoopla."
"Although companies are not afraid to do what's good for business, extravagance is definitely out," says David Gabri, president and CEO of Associated Luxury Hotels International (ALHI), a meetings and incentive sales network for high-end properties, including several prestigious golf resorts. "The perception issue is not totally off the map."
Scott Selvaggi, director of sales and marketing at the Renaissance Resort at World Golf Village, echoes what Parsons is seeing, but he says the changes are budget-based rather than perception. "Although we have organizations coming back after a two-year absence, they are cutting back on the scale of receptions and the time on the golf course," he says. If a golf meeting was a five-day program in the past, now it's three days. "Groups don't have as many dollars to play with as three years ago."
Some groups are taking hybrid-like approaches to golf at their meetings, according to both Selvaggi and Parsons. Instead of sponsoring full tournaments, they are blocking out free time for the activity and negotiating group rates with properties, but attendees who play are paying their own way. And if a group has 40 passionate players out of 200 attendees, for example, then it is working with the property on an arrangement of 10 foursomes. Or groups are letting their meeting-goers arrange their own rounds, and what is billed goes into the group master account.
Gabri says in these ways, golf becomes an informal component and not the central focus of a meeting.
At The Broadmoor resort in Colorado Springs, John Washko, vice president of sales and marketing, has seen the number of formally arranged golf events decrease by 10 percent. However, he does add that some groups are staging very high-end golf experiences like those of a few years ago. "The starker programming is not across the board," he notes.
In golf incentives, meanwhile, organizations are cognizant of incorporating business and education components to "legitimize" their trips from appearing to be purely recreational. "Groups are being cautious," reckons Parsons.
Beyond that, David Fine, vice president of sales, marketing, and revenue development for PGA National Resort & Spa, in Palm Beach Gardens, FL, notes that some groups are including corporate social responsibility elements into their golf programs, where they are playing for charitable causes or adding separate local community events.
Return to Relationship-Building
One big reason why golf meetings are returning is companies and organizations are planning sales meetings and incentives again. "Businesses know recognition and achievement programs add ROI to their objectives," Gabri says. "The meetings industry, as a whole, has communicated effectively [to policymakers and the public] that business and incentive travel has a real purpose."
Gabri sees a resurgence in incentive programs this coming year. And golf "is a nice way to recognize folks," Parsons says, adding that the activity is "an important way for organizations to chat with their people about business."
While most C-suites know that golf events are not merely social functions, how can planners convince stakeholders who might not buy that view? Experts say the key is to emphasize the value-add face time and relationship-building that occurs on the golf course.
Fine says he did an auto industry program two years ago at a different property where the organizer "could've sent dealership owners checks. They said, 'No thanks.' They wanted the incentive trip to network, their spouses wanted to meet. It is a relationship-driven business, and they do it on the course."
"You're taking them out of the traditional business setting, and there is fun and laughs," Washko says, noting, "if you spend four hours with an individual on the course, he or she is going to remember you." He adds, "And the opportunity to play on one of the most well-known courses in the country…that's a big deal for the incentive individual."
Everything's On the Table
Golf resorts remain eager to negotiate rates and concessions with groups before the market begins to swing back into their favor next year, as widely forecast by analysts like Smith Travel Research.
"We are still in a buyer's market, and in Arizona and Florida, which are very competitive markets, resorts are giving breaks in rates, terms, and conditions," says ALHI's Gabri. "Golf is still being worked in at much lower price points."
PGA National Resort & Spa is continuing its Meet with No Hazards offer. It removes attrition and cancellation penalties as well as resort fees for groups that book meetings by Dec. 31 and consume them either by that day or between April 1 and December 31, 2011.
Parsons at the Naples Beach Hotel & Golf Club says the larger the group, the more willing it is to negotiate discounts, even on items like golf club rentals and shoes. "We need to be extremely flexible like all other properties," he notes.
For planners, it's also worth being pliable. At resorts and courses that have high volumes of leisure clientele, working in tee times on an off-peak day, such as a Monday or Tuesday, can amount to 20 to 30 percent rate cuts.
Shotgun starts and afternoon tourneys can score savings as well. Says Washko, "Most guests want to get out there and play first thing in the morning. If a group is flexible and can play later in the day, we can create win-win arrangements."
Fine agrees. "We are seeing more afternoon play, when there are additional savings," he says. "Groups are getting creative with their golf time and use of the course, and everybody's negotiating."
Originally published Nov. 1, 2010