In Westchester, Golf Means Business
Forget Tiger Woods—the golfers who matter in Westchester are the ones who drive this surprisingly large sector of our economy.
Pound Ridge Golf Club, the newest golf course in Westchester, is succeding by drawing in golfers who can afford—but aren't interested in—the country club lifestyle.
Anyone who’s tried to play the game of golf knows it’s hard. The business of golf is hard, too, and it’s not getting any easier as the golfing population ages and new players become more and more difficult to attract. “The biggest issue facing the industry overall is the decline in membership at private clubs,” says Bob Thomas, executive director of the Westchester Golf Association (WGA) and the Caddie Scholarship Fund. “The cost of keeping the doors open continually increases and it’s a challenge to keep the number of members high enough so that cash-flow is sufficient to maintain the clubs.”
The ups and downs of the economy impact golf just like they do every other business that’s dependent on discretionary spending. But the real threats to the game’s health are the lifestyle changes that send Dad to junior’s soccer game instead of to the golf course on Saturday morning, and Mom to her office instead of to the country club on Wednesday afternoon. The survival of the golf business in Westchester—just as in the rest of the country—depends on how well the club owners adapt to the changing world around them.
Heath Wassem, president of the PGA Metropolitan Section (Met PGA), which represents golf professionals in the New York metro area, explains the difficulties: “The baby boomers were expected to flock to the game when they hit their 50s and 60s, when they had more free time and disposable income,” he says. “But they haven’t. Private clubs are finding it harder to replace the normal attrition of members each year.”
If you’re not a country-club golfer, of course, you might ask, “Who cares?” The answer is summed up nicely by Jay Mottola, executive director of the Metropolitan Golf Association (MGA), which represents 565 golf clubs (public and private) with 140,000 members in the New York metro area: “Golf is a huge economic engine for Westchester. The employment numbers alone are important.”
There is public golf here, but the economic dynamo of the golf business in Westchester is driven by the members-only and very private country clubs. Of the 51 golf clubs in the county, 38 are private and available for play only to members and their guests. Of the 13 others, six are operated by the Westchester County Parks Department and open to everyone; four are semi-private courses that give preference to residents of the communities who own them; and three are privately owned daily-fee courses open to the public. Of the 38 private clubs, 30 are owned by the members and operate on a not-for-profit basis. The other eight courses are owned by investors—including the eponymous Trump National Golf Club in Briarcliff Manor. Also contributing to the county’s golf business are driving ranges, golf retailers, and various golf instruction businesses that serve particular niches in the market.
Tallying Golf’s Impact
Just how big is the golf business in Westchester? Even though the private clubs are generally reluctant to share the details of their financial statements, the not-for-profit member-owned clubs file publicly available tax returns, so estimating the size of the golf business in the county can be based on more than speculation. Using that data for 2011 (the last year available) for 27 clubs and projecting it to the 38 total clubs, we estimate that the private clubs in the county generate revenues of $289 million annually. Add in the county-owned courses ($9.5 million in projected revenue, according to 2013 budget figures), and you’ve got a nearly $300-million industry—and that’s not including revenue from the other segments of the golf business.
Applying the same methods (and sources) to employment data reveals that an estimated 5,600 people are employed in various positions in the golf business in Westchester—not counting the 1,500 men and women who work as caddies, who are independent contractors. About 50 percent of the county’s golf positions are seasonal, but the estimated 7,100-worker total puts golf on par with the retail clothing business and real estate sector in the county. These golf professionals serve some 90,000 golfers, an estimate arrived at by applying the national percentage of golfers to Westchester County’s population.
The golf business in Westchester is driven largely by private golf clubs, like the famed Winged Foot Golf Club in Mamaroneck.
Those numbers are large enough to matter. There are a few other numbers that count, too. Because the majority of the clubs are not-for-profit, nearly every dime of the $289 million they take in is spent in the county. According to the MGA’s 2013 Cooperative Golf Club Survey of member clubs in Westchester and Fairfield Counties, the average club had net income of just $107,000 after expenses. Payrolls at the private clubs amount to an estimated $142 million and, while not many of them pay income taxes (on what income?), they certainly pay property taxes—about $319,000 per club, or roughly $13.4 million for the 42 clubs not owned by the county or municipalities. The clubs also generated $15.7 million for charities through outings last year, too, according to the MGA.
Clearly, a sharp, sudden decline in a business of that size would certainly affect the county economy. The industry’s prospects are mixed, according to Ken Wang, owner of Pound Ridge Golf Club, the newest golf course in Westchester. “The muni courses are always going to be fine, just as Winged Foot and Quaker Ridge will always be fine,” he says. “Like in most industries, though, the middle [market] tends to get killed.” There could indeed be casualties in the golf business if the private clubs and daily-fee operators stick their heads in the sand and hope the problems go away. While there are some with grit in their hair, many golf clubs are improving their product, inventing new models of business, and fighting for growth.
Finding the Sweet Spot
Knollwood Country Club, the second-oldest golf club in the county, is one of the more aggressive member-owned clubs. “We’ve concentrated over the last 18 months on improving our amenities with a significant upgrade program to enhance the experience of our existing members and, hopefully, attract some new ones,” says Knollwood President Bob Hughes, citing upgrades to both the clubhouse and golf course. “The most prominent change was strengthening and lengthening our 18th hole.” He’s not daunted by rising and falling membership numbers. “Cycles happen and you adapt to them,” he says. “We’re coming up on our 120th year, which is something very few businesses can say.”
Jeffrey Mendell and his partners are pursuing a completely different business model. Mendell is managing partner of the investment group that acquired an existing course and opened Brynwood Golf & Country Club in Armonk in 2010. “We entered the business during the financial crisis,” he explains, “and we tried to create something that didn’t exist. Westchester is blessed with a lot of great golf courses that cater to the high end, so we created a club that appeals to a broader section of the market. We priced it aggressively and we’ve attracted a cross section of people from all walks of life.”
Brynwood did away with heavy initiation fees, created annual membership packages to fit the lifestyles of different demographics, and brought in Troon Golf to manage the facility. “Being an investor-owned club, we’re trying to make money at this business,” Mendell says. “It’s hard to do. When we get into phase two, we will improve on that.”
Brynwood Golf & Country Club in Armonk markets itself as an affordable family country club.
The next phase, which has been tied up in the Town of Armonk’s rezoning process, includes constructing 88 luxury townhouses along part of the property, building an entirely new clubhouse, and the redesign of the golf course by “US Open doctor” Rees Jones. The end result will be a resort-style golf community unlike anything in the county. Mendell says he expects the regulatory hurdles to be surmounted this year. (A similar struggle is going on between the Town of Mamaroneck and the owners of Hampshire Country Club.)
Ken Wang is taking yet another approach. His Pound Ridge Golf Club is a decidedly upscale facility with a $40-million course designed by Pete Dye, arguably America’s leading golf architect. Pound Ridge occupies a unique place in the Westchester market as a totally public course offering top-quality golf on a daily-fee basis. The facility couldn’t have opened at a worse time—2008—as far as the economic outlook goes. “Our growth curve has the right shape, but it’s taking a little longer than we would have liked,” Wang says. “Last year, rounds played were up, although not as much as we wanted because the weather was so poor in the spring.”
Wang believes he can appeal to middle- and high-income golfers who can afford but aren’t interested in the country-club lifestyle for various reasons. “In the old days, people joined private clubs at a certain stage in their lives,” he says. “They had kids, and they spent the day at the club, playing golf, then cards, while the kids were at the pool, then they stayed for dinner. That model is clearly shot.” There’s a cost factor, too, according to Wang. “The economics of country-club golf are well known. It’s going to cost you around $1,000 per round unless you play a lot of golf. We’re around $195 per round, and even less on weekdays.”
Appealing to the family market is the tack adopted by other clubs, too. Eugene Donovan, a long-time member at Bonnie Briar Country Club in Larchmont, believes the club has been successful because it is promoted to (and priced to fit the budget of) young golfers with kids. “We made the assumption that the attraction would be the golf course instead of the clubhouse, so we put a large percentage of our money into the course,” he explains. “We’re still making improvements to it.”
Broadening the Appeal (and the Business)
While many (but certainly not enough) of the private clubs, like Bonnie Briar, have active junior programs, one of the biggest obstacles to growing golf in Westchester is the dearth of entry points for other kids into the game. Most of the private clubs are restricted to members’ children and perhaps a few of their guests.
One effort to introduce kids to golf is The First Tee program, whose metropolitan chapter was founded with help from the MGA and Met PGA at Mosholu Golf Course in the Bronx. Some 530 children, many from Westchester, participate each year at Mosholu and the program will be offered at Westchester Golf Range in White Plains beginning this year.
The county-owned courses and public driving ranges offer kids’ programs, too, but opportunities to actually play the game on a golf course are limited. The county courses allow kids under 13 on the course only when accompanied by an adult, and then only with the permission of the golf pro.
Another market that’s not been very well served in Westchester (or nationally) is new women golfers. The Women’s Metropolitan Golf Association (WMGA) promotes the sport, mostly among the private clubs, but opportunities for women who want to learn the game are somewhat limited. One organization that makes a serious effort to bring women into golf is the Westchester chapter of the Executive Women’s Golf Association (EWGA), which has about 250 members.
“As a way to get more women involved in the game, we have clinics and educational opportunities specifically designed for rookies and beginners,” explains EWGA Westchester President Hollie West. “We have a rookie league each year where new players go out with a more experienced player. It’s not really about golf lessons as much as it is about etiquette and getting around the course.
Despite weak local efforts to grow the number of golfers in Westchester, accounts of the decline of golf are like reports of Mark Twain’s death—greatly exaggerated. The country clubs may be fighting for members and under-served markets aren’t being tapped, but the business overall seems to be holding its own against an uncertain economy and the demographic shifts working against it.
The number of rounds played at the county-owned courses remained essentially flat (-1 percent) from 2003 to 2012, although it was down in 2013 due to bad weather throughout the peak spring season. Membership in the private clubs has leveled out in the last two years, according to the MGA survey, with 41 percent of Westchester clubs reporting an increase and 44 percent a decrease.
Nationally, more golf clubs have closed than opened in recent years, according to the 2011 Golf Economy Report by the National Golf Foundation, but the opposite is true in Westchester, says Charlie Robson, executive director of the Met PGA. “If you look at the past 20 years, we’ve added some excellent upscale facilities,” he notes. During that period, Ridgeway Country Club in White Plains closed, while hundreds of millions of dollars were invested in new clubs like Hudson National Golf Club in Croton-on-Hudson, Anglebrook Golf Club in Lincolndale, Hollow Brook Golf Club in Cortlandt Manor, the county-owned Hudson Hills Golf Course in Ossining, and Pound Ridge Golf Club. New courses were built over existing ones by GlenArbor Golf Club in Bedford and Trump National in Briarcliff Manor.
Robson also points out that employment in the metropolitan area—at least for the golf professionals who run the courses, give the lessons, and manage the retail operations in the clubs—has increased. “In 1997, we had 461 PGA members and 145 in the apprentice program. In 2013, we had 677 PGA members and 76 in the apprentice program,” he says. “The increase not only reflects the number of facilities added but illustrates two other facts—that clubs and daily-fee courses hired more professionals to provide a higher level of service, and that a number of new golf teaching and retail facilities have opened.” Those include companies like GolfTEC and Dick’s Sporting Goods, which hire PGA pros to provide expert advice and instruction to customers.
The future of golf in Westchester? “I don’t see anything changing quickly or dramatically,” says MGA’s Mottola. “Some of the initiatives and efforts to attract members will help local clubs do well. Some of the lower-echelon clubs may develop into hybrids of private and semi-private clubs. Every single club has really analyzed their operational costs and cut unneeded spending. That’s helped get them through the tough economic times. Long-term, that will bode well for the clubs.”