Golf’s greener side
As Roaring Fork Valley golfers bow their heads in concentration and send divots and golf balls flying through the air, they are unknowing players in an altogether different game: market economics.Just more than 10 years ago, there were only three golf courses in the Aspen area, all public. Today there are 10 within an hour’s drive. Six currently offer some level of public access and two – Lakota Canyon Ranch in New Castle and the new Snowmass Club – opened this summer.Over the same time period, golf industry experts say the game’s participation level in Colorado has remained steady. In other words, more tracks are being offered to roughly the same number of takers across the state and in Aspen.So even a hacker with the most questionable score-card mathematics can see it’s a simple question of supply and demand. And those in the local golf industry say the former has now greatly exceeded the latter.What does that mean for a valley with a short summer season and a sometimes unpredictable tourism industry? With yearly maintenance expenses at some courses in exceeding $1.5 million, can all these facilities possibly survive with so much competition? Which is a more stable financial model, the public or private golf club? What will the impact be on the golfer? Representatives from the state and local golf industry recently shared their thoughts with The Aspen Times.
By the numbersIn 2004, the Colorado Golf Association (CGA), a membership organization that represents public and private golf courses in the state, commissioned Colorado State University to conduct a study on trends and statistics in the state’s golf industry. The findings came as a surprise to many casual observers. With new golf courses all over the place, many assumed Colorado to be in the midst of a golf boom. In fact, the number of new golfers to the game has grown only at a rate comparable to population growth.”We’re not booming,” CGA executive director Ed Mate said. “The macro trend of the game of golf is flat – popular, but not growing.” In 1989, there were 22,500 golfers for each golf course in Colorado; by 2002, that number had actually shrunk to 18,500, according to the study.
“Those numbers are illustrated really well in a place like Aspen, where once you had only a few courses, now you have nearly a dozen,” Mate said.Around Aspen and across the state, new golf courses have been built in three different forms: private courses, public courses and courses tied to real estate developments. All three have had varying levels of success.Private vs. publicWhile private courses have struggled in Denver-metro areas, they seem to be a model of stability in Aspen. These havens for the haughty were a long time coming: Before the Maroon Creek Club, the valley’s first private course, was opened in 1997, everyone played the same public courses. Fairways were crammed with billionaires and bartenders alike. A wealthy population eager for the exclusivity of the country club meant memberships at Maroon Creek filled up quickly. Basalt’s Roaring Fork Club and Aspen Glen downvalley soon followed suit, although neither has managed yet to sell all their memberships. Initiation fees skyrocketed (Maroon Creek’s is currently $250,000, the highest price for membership in the state). The Roaring Fork and Aspen Glen clubs supplemented their membership income through the construction and sale of multimillion-dollar homes on their property. Even as more competition came to town, it was a formula for financial success.”The new golf courses don’t really affect us with our membership,” Maroon Creek professional Jon Stretcher said. “Our membership is full and our play is steady.”
So what has become of the courses where the majority of golfers, including tourists, tee it up? It hasn’t been good news. The summer’s newest public-access offerings, Lakota Canyon Ranch and the Snowmass Club, all report busy opening seasons, but that’s not uncommon for new courses; the true test will be the in next few years.And judging by the two best-known 18-hole public courses in the valley, there may be tough times ahead. Business is down at both Aspen Golf Course and River Valley Ranch in Carbondale. The number of rounds at the Aspen course has fallen from 34,000 in 2003 to 30,000 this year, approximately a 12 percent drop. River Valley Ranch’s play has also decreased, from 21,000 to 19,000 rounds over the same year, an 8 percent drop.Representatives from the two courses aren’t confused as to the primary cause of the drop in play.”With the opening of the Snowmass Club and Lakota Canyon, the volume of golfers have spread out, and we’ve felt the impact of their opening,” RVR golf operations director Jim Sandborn said.
“We’ve definitely noticed a difference with the opening of the new courses,” Aspen golf director Steve Aitkin agreed.The marriage of golf and real estateOne trend identified in the CGA’s 2004 study was the boom in golf courses tied to real estate developments. Following the old “location, location, location” adage, developers have been quick to figure out that building a golf course solves the problem of finding a desirable location simply by creating one. Golf villages are popping up everywhere, particularly in the already real-estate rich Roaring Fork Valley.It’s become big business. The total value added to residential property by golf course developments in Colorado last year is estimated at $832 million, according to the CSU study.”Developers have begun to understand that their asset is helped drastically by an accompanying golf course,” CGA representative Mate said. “That’s the direction the industry is going.”
Sure enough, the valley’s newest additions are tied to real estate – the semiprivate Ironbridge Club near Glenwood Springs and the public Lakota Canyon in New Castle.Tom Underwood, the head professional at Lakota Canyon, said the revenue coming from real estate has been indispensable in the opening months. Lakota Canyon is currently selling lots at prices ranging from $80,000 to 100,000, not astronomical Aspen prices, but no small change for New Castle.”It’s a marriage that you need these days,” Underwood said. “I can’t imagine doing one without the other. Can a stand-alone golf course make it these days? It would be very difficult.”Ironbridge golf club, too, is dependent on development. The course currently has 45 members. When the course begins to sell homes this October, that number should at least double, according to club officials. And while 90 members is still nowhere near capacity, the club is confident that it will survive, even thrive, thanks in large part to its real estate development.”We have people from all over the country looking to buy property here,” assistant professional Kyle Cofer said.What does is mean for the common golfer?
In market economies, one consequence of supply exceeding demand is the creation of a great environment for the consumer. It’s the same with the local golf economy.In the valley, the average duffer has already begun to feel the benefits. For one, green fees have dropped, and in some cases dropped drastically. Spurred by the desire to keep its local population base, River Valley Ranch, an upscale facility that once charged more than $100 for a round, introduced a $40 greens fee this fall. Aspen Golf Club has also floated a tiered pricing system this offseason. Lakota and Ironbridge currently offer play for under $85. Only the Snowmass Club has resisted the price drop; it’s the only public-access course in the valley still charging more than $100.The competition has also changed the layout of golf courses in the valley. In an effort to keep golfers coming back, public-access courses are now being set up in a less-challenging fashion. All over the valley, greens have been slowed, the rough cut and fairways widened.”The people who come back are the people who enjoy the experience,” RVR’s Sandbord said. “Whereas 10 years ago the goal was to create the hardest, championship layout possible, now it’s about making the day fun. What’s wrong with setting up the course so someone can play a good round of golf and enjoy themselves?”The future of golf in the valley
For the average Aspen golfer, the future looks good; choice is not a bad thing. But what about for the clubs and courses? Garfield County commissioners are currently considering a proposal from a developer to build another 18-hole course off Highway 82, east of Glenwood Springs. It will be a small, private course (the plan is for only 150 members), but still, it’s another addition to a golf industry seemingly approaching its breaking point. Can all the courses survive?”People talk about the market being saturated,” Mate said. “But the real measure of oversupply is foreclosure. And around Colorado, we haven’t really seen that yet. They might not make millions, but golf courses on the whole are still solvent.”Local golf course administrators agree. None of the clubs believe bankruptcy or closure is in the future. But they also say more changes are in store. Cooperative agreements, or “playing packages,” between the public courses around the valley are currently being negotiated. And even a “valleywide” pass for locals is not out of the question.It seems that even the royal and ancient game of golf will to have to adapt.”We’ll be all right,” Sandborn said. “I just think everyone’s going to have to tighten their belts and put on their thinking caps. But golf’s a great game and we’ve got great golf courses around here. We’ll survive.”