High-end golf market not on par with today's poor economy

By SETH SOFFIAN, ssoffian@news-press.com

It's no secret: The high-end golf market is not doing well throughout the country right now.

That means there are dozens of courses in Southwest Florida not doing well either.

In Lee and Collier counties, there are at least 16 courses with initiation fees of at least $100,000, the high end of the high end. Yet representatives from most of those clubs admit no one's selling many golf memberships.

"While there's some outstanding courses out there today and they have some incredible numbers to join, there isn't a whole lot of people out there joining," said Ed Rodgers, vice president of The Bonita Bay Group, which has three golf course communities with initiation fees of more than $100,000.

Rodgers said to look no further for evidence than the newspaper, where high-end golf courses can be found advertising for members. A number of courses, which sell equity memberships, also are offering discounted, nonequity memberships that can be recalled after several years.

Late last year, The Bonita Bay Group postponed plans for a high-end, stand-alone golf course eight miles east of Interstate 75 on Corkscrew Road.

Twenty-four months ago in the Naples market, there was no discounting of memberships. There was no low-end recallable membership, Rodgers said. This was pre-9-11. The stock market had gone down a little bit, but it hadn't had the effect on the market yet.

People thought there was a recovery right around the corner. They were still buying second and third memberships. 24 months later you see a completely different picture.

Stephen Lockwood, a member or part owner of six golf courses worldwide, including two in Southwest Florida with initiation fees of more than $100,000, estimates there's about $450 million in unclaimed memberships at high-end golf courses in Southwest Florida.

Lockwood, a Philadelphia native who owned his own re-insurance business - one that insures insurance companies - for 30 years, figures there are probably 30 courses in the area with an average initiation fee of $100,000.

Those 30 courses, many of which have opened since 1990, are only 50 percent full, Lockwood estimates. That adds up to roughly 150 vacancies at 30 clubs at $100,000 a pop, or $450 million unsold golf memberships.

"I think that everybody is trying to be creative in enticing various types of members," Lockwood said. "Nobody's throwing around the money the way they did five years ago."

There are a handful of more-established, high-end courses reporting waiting lists as long as five years to join. Still others have dropped their price. Collier's Reserve had been charging $125,000 for residents and $150,000 for nonresidents, but dropped its equity price to $65,000 on Dec. 2 when the club members took over ownership of all unsold memberships. Since that time, Collier's Reserve has sold 15 memberships at $65,000.

Some in the industry argue the impact is greater at golf-only clubs, which don't benefit from home sales that often accompany golf membership sales.

"There's probably only one thing more discretionary than a second or third membership, and that's a boat, but they're about the same," Rodgers said. "At some point, when you're looking at your economic situation, and you're seeing your wealth disappear, cutting back on one of them is not a big sacrifice."

Golf Club of the Everglades, a golf-only facility on Vanderbilt Beach Road well east of Interstate 75, opened about three years ago and has about 160 members, according to director of golf Dan Mullaly.

It's membership fee is $130,000 for equity in the club. But the club, of which Lockwood is part owner, is also offering a $40,000 recallable membership. Those who buy it have four years to fill in the difference for full equity membership or allow the recallable membership to expire.

"Everyone's jumping at it right now," Mullaly said. "It's a good way to get their foot in the door. If anything happens with the economy, they're out. If it recovers, they're in."

Most in the industry do expect a recovery in the high-end golf market. None expect it to be fast. "It's a short-term event that we're seeing," said Sandra Hesse, a partner in Naples' Quail Creek Golf & Country Club, which has a resident membership fee of $175,000 and a nonresident fee of $200,000.

"Are people standing in line to buy memberships these days? No," Hesse said. "But I think that will come back."

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