The Revival of Corporate Golf

In the heyday of client outings and executive golf retreats, golf's deal–forging and team–building virtues were extolled. Will those same advantages bring business golfers back to the links? p>It’s too late to argue the point, but AIG’s infamous California retreat of September 2008 should hardly have been spun as a golf boondoggle—the bailed-out insurer’s tab at the St. Regis Resort in Monarch Beach shows nearly four times more spending in the spa ($23,380) than on golf fees. Even had the noble tradition of customer golf escaped AIG’s taint, it had ample bad press on its hands. Critics pounced on the seemingly TARP-funded Northern Trust revelries (think private concerts by Sheryl Crow and Chicago) at the bank’s PGA Tour event last February. The drumbeat got started years earlier, thanks to junketeering lobbyist Jack Abramoff. His 2002 bribery spree included a well-publicized toot to St. Andrews for what Time magazine scoldingly called “five days of golf, food and merriment.

As the golf hospitality industry works to rebuild its bridge with corporate America, it has ample time to mull the virtues that once drew business people to the fairways, as well as the excesses that have helped dry the business up. “The one segment of the golf population that has really stayed away lately is our most profitable client—the corporate golfer,” says Tim Greenwell, senior vice president of sales and marketing for Troon Golf, a management company with courses in 31 U.S. states and 26 foreign countries. “Part of that pullback is due to the public perception issue, some of it is the economic downturn, but corporate golf activity might have been due for a correction, anyway. Companies got very free with money in entertaining themselves, their customers and their employees.”

Greenwell’s operating statistics tell him the falloff in corporate-outing business is greatly responsible for a 20 percent drop in system-wide revenues. Troon’s management is not ready to project 2010 as a major comeback year for business golf. That said, golf-related activity by American businesses has several sub-categories, and “green shoots” of growth are being spotted in many of them.

Back to the links

Kate Gemmell, a professional planner with Atlanta-based Meeting Expectations, Inc., feels guardedly optimistic. “Companies that steered away from golf over the last 18 months are finding their way back,” she says. “We have a fair number of golf events in the early planning stages, which wasn’t the case a while ago. The public-relations issue has to be considered,” Gemmell adds, “but people still like to play. They haven’t found another way to get that one-on-one face time with a customer or prospect in a conducive setting for four-plus hours.”

Planners like Gemmell have seen too many deals and partnerships put together on the fairways to lose faith in the game’s relationship-building power. One specialist in golf-themed business meetings, Roger Caldwell, says the comeback should be driven by limited, targeted and soundly strategized events, not blowout parties. Caldwell’s Kansas-based firm, Great Golf Events, has lost some of the froth off its business but believes in its basic formula.

“Executives who have done a lot of golf hospitality look at what they’ve spent on golf and ask, ‘Do we really need this?’” says Caldwell. “My pitch to them is, if we’re going to talk about a golf event, let’s build some ROI potential into it—or not bother.” Caldwell advises clients to meet with their sales staff, revisit the revenue potential of various customers and prospects and honestly assess whether a golf outing or retreat could help pull their business in. “The assessment isn’t about your golf day as the be all, end all, it’s about whether golf events can help get you signed contracts on deals that are reasonably close,” says Caldwell.

The Great Golf Events program that Caldwell always goes back to involved a software company that organized a series of four client golf outings several years ago. “My client invited eight or nine potential customers to each event, all decision-makers with contract-signing power,” he recalls. “They put a sales rep in the foursome with each customer and started the day with some remarks from the head of sales. The client spent $60,000 on the program, and at the end of the quarter, they had closed $5 million in new business. Golf didn’t do it all, but it definitely helped.”

Keeping it reasonable

Many companies placed golf events on a hiatus, intending to reboot them eventually. As this begins to happen, the firms seem open to a tradedown in where they go and how lavish the swag and perks are. Paradigm Golf Group, a midsize course-management company, woos corporate groups that once spent top dollar at destination golf resorts but ceased to do so because of budgetary and image concerns. “We are able to take corporate groups from their old spend of $250 a person down to about $75 a person, and guarantee they will get just as much enjoyment—or even more—out of the experience we provide,” says Paradigm’s Joe Dahlstrom.

Part of Dahlstrom’s pitch is the lower profile of Paradigm golf facilities, which he describes as “midlevel.” Evincing a we-try-harder spirit, the group empowers front-line employees to add frills and extra services to an inquiring group’s package without charging for them. “I remind our potential outing customers that, before the financial meltdown, they were throwing money around to keep up with the Joneses,” says Dahlstrom. “They don’t have to do that if they work with the right people.” At a Paradigm-staged agent-recognition event for loan-default specialists Reomac (every economic trend has its winners), a festive atmosphere was requested and supplied, including rock music piped through temporary speakers on the golf course.

Ron Beck, a director of golf whose Fox Hopyard Golf Club in East Haddam, Conn., is ideally set up to handle group business, says his corporate outing business “got hammered” in 2009. “We are looking at a six-figure falloff from 2008 in corporate group play and revenue,” says Beck. “The charity outing business held up well, however.”

With that in mind, many tournament planners are telling corporate clients to do as much piggybacking as possible onto well-run golf events that are headlined by a 501(c)(3) entity. Steve Skinner, CEO of Kemper Sports Management, one of the major players in the field, says private-sector businesses can use charitable events as excellent client-appreciation tools. “You don’t get the control and branding that you get when you do your own event,” says Skinner, “but there’s still a lot of relationship value.” He adds that some companies that still want to stay off the radar are just as glad not to have that prominent branding.

A team-building opportunity

Consultants who work on the team-building side of business golf say their business has kept up due to the constant drive for productivity gains on the operations side. Carissa Zenorini, CEO of Absolute Adventures, in San Francisco, cites golf as a valuable platform for building team cohesion and peak efficiency.

“There are lots of parallels between the challenges you find on the golf course and the challenges people encounter in the office,” says Zenorini, whose golf-challenge event uses a modified version of traditional club golf. “We use it to teach leadership, goal development, risk taking, effective communication and group strategizing.” Not only do work teams benefit from this training, she adds, but they also appreciate their employer’s interest in providing an enjoyable form of training.

One factor likely to draw businesses back to golf is the game’s popularity with the PMC (professional meeting coordinator) crowd. Karl Baur, who works in the government-meetings niche, a subcategory that has traditionally avoided golf events, wishes he could do more with golf. “It’s a very nice way to get know people—way better than the floor of a trade show,” says Baur, who works for RDL Enterprises. “In fact, that’s how I got started as a golfer: in order to play in a convention golf event.”

The definition of what’s appropriate in business culture is fluid and driven by events. Reflecting on the recent payback of TARP loan money to the U.S. Treasury by Bank of America and other financial companies, Skinner sensed change in the offing. Prohibitions on logical, law-abiding business behavior tend to run their course, he observes, and he sees a real basis for companies “returning to their longtime methods of conducting business and growing their businesses.” And when that return begins, it will likely favor the early adapters.

“There was a time when decision-makers were getting more invitations than they could possibly accept,” says Skinner. “Some of them might even have considered it a nuisance. Now it’s been quite a dry spell, and there is bound to be pent-up demand. If you’re the one who steps up to the plate and offers golf invitations, you might just find a lot of appreciative takers out there.”

DAVID GOULD is co-founder of TheAPositon.com and has been executive editor of Travel + Leisure Golf.