The ROI on Course Renovations

SentryWorld in Wisconsin dove headlong into a massive renovation project in 2012, shutting down its course for two full seasons so Robert Trent Jones Jr. and his design team could rework all 18 holes. It was an ambitious undertaking for a facility considered the first upscale public course in the state when it opened back in 1982. Entire holes were rerouted, bunkers and greens were relocated, and the overall layout was lengthened.

Now, four seasons after SentryWorld’s full-scale renovation effort, the benefits of that investment are evident in the bottom line.

“There are a lot of negative stories out there about golf, whether it be about the decline of play or that younger golfers aren’t taking up the sport,” says Danny Rainbow, SentryWorld’s Director of Golf, “but what we’ve learned from our renovation is that the market for destination golfers is alive and well.”

The golf industry’s unprecedented building boom from 1986 through 2005 saw more than 4,000 courses added to a U.S. market that was already, by far, the biggest in the world. Course closures have outweighed new construction since 2006 as the industry goes through a natural balancing of supply and demand, but the investment is still there. In the past 12 years, facilities have invested more than $3.25 billion in major renovations – with many projects involving courses that were built during the boom years.

Jack Nicklaus is overseeing the major renovation at his Great Waters course at Reynolds Lake Oconee in Georgia.

Many of these renovations (which the NGF’s facility database defines as at least nine holes being shut down for a minimum of three months) have occurred more recently, in the years following the Great Recession. Several years after some of these major expenditures, many owners and operators are realizing the benefits of that investment, whether in the form of increased revenue, rounds-played or membership acquisition.

“It’s been a huge positive for us,” says Bev Berardo, the director of marketing at Georgia’s Reynolds Lake Oconee, which in the past five years has renovated several of its courses, including The Landing and The National. “After the renovations, we see an increase in requests for those courses that had the work done. Increased players on the golf course not only builds revenue for golf, but in the clubhouses, from a merchandise standpoint and from food and beverage.”

Thriving Segment

SentryWorld in Wisconsin is seeing the benefits of its major renovation project.

At SentryWorld, a post-renovation increase in greens fees from $85 to $135 has attracted “a different demographic and customer,” according to Rainbow. Another aspect that’s helped the Stevens Point course’s reboot is that Wisconsin is fast becoming a bucket-list golf state with nine courses among Golf Digest’s Top 100 public courses in the U.S. (The Sand Valley Resort is 40 minutes southwest of SentryWorld). Rainbow says the lesson for similar operators is that “this market segment we are living in is thriving” and that chasing those customers hasn’t been fool’s gold.

SentryWorld was in an enviable position with stable financial backing from a healthy corporate partner, but positive renovation returns are being seen at both ends of the spectrum.

Texas Star Golf Course invested $800,000 in 2014 to convert its greens from bent grass to Bermuda and replace its bunkers. While the municipal course outside Fort Worth is well-supported by its board, it still had to make the case that the improvements were beneficial and worth the cost, said General Manager Glenda Hartsell-Shelton.

Since the renovation, the course’s graywater collection system has been used to irrigate and water the layout, which is 15 minutes from the Dallas Cowboys’ stadium. The previous bent grass didn’t respond as well and required the club to use a significant amount of potable water. The new greens also hold up well to the amount of traffic they receive as one of the more popular public facilities in the area.

“My superintendent can finally take a vacation during the summer without worrying too much about everything going wrong,” Hartsell-Shelton said.

“We were charmed,” she added about the renovation process. “The only hiccups being that in addition to lost revenue for three to four months, they needed overtime pay for crews working to help ready and repair the course, which was accounted for ahead of time and which the course is earning back now.

A $5 million course-renovation investment at Moraine Country Club in Ohio has yielded increased membership as well a jump in food and beverage sales, says head golf professional Brent Sipe. Although there hasn’t been a big surge in rounds-played, Moraine has doubled its non-resident membership category and increased guest revenue by 45%.

The renovations took Moraine a year to complete and they made sure not to raise members’ dues during this period. Sipe, meanwhile, secured playing privileges for members at 22 different clubs during construction. It cost the club $260,000 in guest fees, but it was part of the price to return Moraine to its former glory, an effort that has paid off in both tangible and intangible ways with members excited about their new course and rounds-played up nearly 10%.

Monterey Makeover

An overhead view of Poppy Hills, which was transformed after a recent renovation. (Photo: Joann Dost)

Water is at a premium in California more than ever and Poppy Hills on the Monterey Peninsula had to conserve more of it. The drainage and irrigation systems had fallen into disrepair and the course, which sits above Pebble Beach on a hill in the Del Monte Forest off 17-Mile Drive, was often too wet for ideal playing conditions.

So, while Poppy Hills’ 13-month renovation in 2013-14 was a necessity, it was also a project that injected enthusiasm back into the facility, which had been dropped from the PGA Tour’s trio of courses for the Pebble Beach Pro-Am in 2009. Immediately following the renovation, Poppy Hills was announced as the host of the PGA Tour Champions First Tee Open, while the USGA also took note and held its 2018 U.S. Girls’ Junior Championship at the course.

The visual changes were dramatic. Mounds were eliminated, doglegs were softened and rough off the fairway was replaced by native waste areas that helped reduce irrigated turf by almost 20%. All 18 greens were redesigned and the drainage and irrigation were updated with new systems that minimize water use and maximize distribution. Additionally, the entire course was sand capped, promoting firm and fast conditions year-round.

On the practical side, Poppy Hills Head Pro Brad Shupe compares the maintenance work to that of a new roof on the house. It’s not the sexiest repair but necessary to stay in your home. Yet those, along with the other more visible changes, have helped put Poppy Hills back among the rankings of the Top 100 public courses in the nation.

“All of the positive feedback we received in different channels validates the improvements,” Shupe said. And it’s not just intrinsic feedback that has been helpful. Shupe says revenue is up in three categories: rounds played, food and beverage, and pro shop merchandise. Poppy Hills’ revenue surged in the first full year after the renovation, up 40% from the facility’s previous full year of play.

The short-term pain of a course closed for renovations can indeed pay off in other big ways — in terms of the golf experience as well as the club atmosphere.

Members or customers are more prone to hang out longer, visit more frequently, and have a more enjoyable golfing experience. That can then correlate to more play, higher revenue or better membership recruitment, all of which can help clubs prepare for the next wave of upkeep and change — both on and off the course.

At Reynolds Lake Oconee, the 2014 renovations at The National, a 27-hole course designed by Tom Fazio, extended beyond the golf course and included the construction of a new golf shop, snack bar and the National Tavern. The tavern has seen significant increases in its food and beverage revenue each of its first three years. Meanwhile, the course’s upgraded irrigation/drainage has improved conditioning and a conversion from bent grass to Bermuda has provided superior playability on almost a year-round basis.

The Landing at Reynolds Lake Oconee

The positive benefits of its recent renovations made the latest project at Reynolds Lake Oconee a no-brainer. The community is currently undertaking the “deepest” renovation in its history at its highly-regarded Great Waters course, with designer Jack Nicklaus taking it right down to the dirt as part of a total turf renovation.

“With the previous success we’ve had,” says Berardo, “it was an easy decision.”