Not everyone was as optimistic as Fonzie, but most golf course builders are giving a thumbs up to the U.S. renovation market and construction overseas.
Given that new golf course openings in the U.S. can be counted on your fingers and toes these days, one would think that a gathering of the best golf course contractors in the world would be a somber occasion. But even though the members of the GCBAA who gathered in Milwaukee for the association’s annual meeting weren’t exactly jubilant about the state of the market, there was cautious optimism and a growing recognition that the “new” market presents opportunities.
I hadn’t attended a GCBAA meeting for years, so I wasn’t sure what to expect. We were there primarily to present our 6th annual Builders Excellence Awards (see the full story in the August issue) and to schmooze with the contractors and suppliers who attended. There were a bunch of good panel discussions, including one led by our own Jeff Brauer who managed to hit the nail on the head about the design business AND slip in a half-dozen really bad jokes.
But, as always, the really interesting stuff came from hallway conversations. Based on those, and what I heard in the sessions, here’s my assessment of what’s going on in the world of golf course construction:
- Just a few years ago, the primary mantra at most GCBAA meetings was, “Hire a qualified GCBAA member contractor even though we’re a little more expensive.” Now, virtually all significant remodels or new projects are almost exclusively being bid by 4-5 GCBAA members and the pricing is fiercely competitive. No one needs to use a local, gypsy contractor anymore when they can hire experts for a highly competitive rate.
- Because of the cost-effectiveness of working with the companies, the big topic was how to educate facilities of the downsides of trying to do projects DIY. When you roll up all the hidden costs of trying to do construction work in-house and balance that against the deals that contractors are offering, you may find it’s actually cheaper to hire a pro.
- Many contractors are diversifying beyond the golf course because of the trend toward developers wanting one contractor for housing grading, parks/landscape installation, ball fields and fitness facilities, etc. The days of just building an anchor course are over and the companies need to look beyond the fairways to keep profitable.
- Much of the work being done is being driven by the federal tax code changes a few years back that recognized that certain physical features of the course (greens, bunkers, irrigation systems, etc.) are depreciable over time. In short, when your greens have maxed out on depreciation, it’s time to think about replacing them.
- Smart course operators are investing in “freshening” the course to maintain the integrity of the original design but add/change features to give the course something new in terms of look and playability.
Last, but not least, perhaps the most impressive thing I heard from the GCBAA members in Milwaukee was how hard they’re working to keep their people employed and busy. They, like all of us, are fighting through the hard times and trying to do right by their employees…many of whom have been on their teams for decades. So, it’s only fitting that they’re moving heaven…and earth…to find work in the modern golf economy. You gotta give two big thumbs up to that.
