No Privately Owned Golf Courses on Public Lands

MYRTLE BEACH, S.C., July 20 - These should be the glory days of golf.

Thanks to Tiger Woods, who at this weekend's British Open is once again the main attraction, six networks agreed last week to pay about 50 percent more than ever before to televise golf tournaments.

For a game that still depends on the spending habits of middle-aged men, the demographics could not be more glorious, at least in theory. Baby boomers are flooding into their 50's, with children grown, time on their hands and bellies turning to the pudding that jiggles so happily in golf carts on a warm summer's morning.

So why has growth in the number of golfers in the United States slowed? Why are some lenders warning that the golf course business is on the brink of a free fall? Why is this town, which leads the country in golf holes per capita (one hole for every 139 people), lurching toward a golf course shakeout, with bankruptcies, rumors of mass sales and the jarring vision of a handsome little course, Gator Hole, being bulldozed to make way for a Home Depot?

Demographics are not destiny, it seems, when it comes to the difficult game of golf. "Everyone assumed that once these baby boomers started turning 50 they would just fly in here, but we were wrong," said Kenneth L. Folkes, a former P.G.A. tour pro and president of the Links Group, the largest golf course management company in Myrtle Beach, which filed for Chapter 11 bankruptcy protection in January.

"It is not a flood of golfers," Mr. Folkes said. "It is more like a stream. If we don't get some real spikes in the number of rounds played here and across the country, then we will have to re-evaluate the whole industry."

Golf picks up 1.5 million to 3 million new players a year, but it loses nearly an equal number because of a failure to transform passing interest into long-term commitment, said a 1999 report by the National Golf Foundation, the game's main research organization, and the management consulting firm McKinsey & Company. There are about 25 million golfers in the United States.

The report said the industry had been unable to keep more players in the game or entice them to play more often, and as a result the "explosive growth of new golf courses has outpaced the growth of new golfers, resulting in fewer golfers per course." In the last decade, golf researchers agree, too many courses have been built that are too expensive, take too much time to play and are often too hard for a nation of weekend hackers, most of whom are unlikely to get much better.

"When you go out to these tough new courses," Mr. Folkes said, "you say to yourself, `This is torture.' "

Off the fairway, signals are mixed at best about the extent to which Americans are over the moon about golf. They may be merely over the moon about Tiger Woods, the first golfer to win four consecutive major professional championships. Television ratings for golf tournaments slide when he is not playing or not competitive.

Similarly, a new magazine trying to plug into golf's supposed appeal to urban sophisticates has been hooked into the rough. The News Corporation last week told senior editors at Maximum Golf, a brash mix of attitude, pulchritude and putting tips, that the magazine was being sold.

Out on the golf course, the message from the masses is also mixed.

"I gave up the game for a while because it was driving me crazy," said Jerry Stevens, 58, the fire chief of Aurora, Ill., and a better-than- average golfer who shoots in the mid-80's. "I would go to these expensive courses on outings with my friends and it could get so frustrating."

Mr. Stevens was on the links in Myrtle Beach last week with his wife. But he was not playing one of the dozens of difficult courses that have been built here in the last five years. Many of those new courses are "Tigerish," in that they are very long, pimpled with 100-plus traps and steeped in water hazards, and playing 18 holes usually costs more than $100.

The fire chief and his wife were playing Possum Trot, a 33-year-old course with wide, forgiving fairways. There is not a single hole on the course that requires a 200-yard drive off the tee to find solid ground. The couple zipped through Possum Trot in less than four hours, it cost them just $33 each, and they said they were happy as they headed off for midday naps.

Like many golf destinations, Myrtle Beach has raised its marketing sights far beyond the simple pleasures of Possum Trot. There are 118 courses, with five more under construction, strung out along a 60-mile stretch of traffic-choked beach highway that bills itself as the Grand Strand. Eighteen new courses have elbowed into the golfing mix in the last 26 months.

Each of these new courses must attract about 40,000 paid rounds of golf a year to make a profit, according to industry experts. Since the average golf tourist plays about four rounds, the 18 courses would each need to attract about 10,000 golfers to avoid stealing clientele from older courses. That's 180,000 golfers on top of the million who already make annual pilgrimages here.

It is not happening - here or elsewhere. The total number of paid rounds here has decreased slightly since 1999, according to Myrtle Beach Golf Holiday, a marketing cooperative. Rounds played so far this year across the country are down 5.2 percent, according to Golf Datatech, a research company.

"The glut of golf courses is not specific to one region or area; it is a national issue," said Richard Creed, a consultant with the golf group at PricewaterhouseCoopers. Mr. Creed said there were overbuilt golfing communities in Florida, Arizona, Virginia and California.

"There has been way too much construction activity without regard to market demand," said George Marderosian, president of Clubhouse Capital, a Providence, R.I., company that lends money and advises banks on financing golf courses.

"Golfers don't beam up when you want them on the tee," Mr. Marderosian said. "Now, the industry is in a free fall."

In Myrtle Beach, about 25 courses are apparently for sale, Golfweek's Superintendent News, a trade newspaper, reported. In Orlando, another boomtown for golf, more than a quarter of the courses built in the last five years are not meeting revenue projections, Mr. Marderosian said.

The golf market, he said, has gone soft along much of the eastern seaboard, with the notable exception of New York, Philadelphia and Boston. Around those cities, as golfers are all too aware, courses remain crowded.

"If you can get permits to build a golf course within 50 miles of Manhattan, I guarantee you that you will not have trouble getting financing," Mr. Marderosian said.

The pattern is similar across the country, he said, with packed golf courses near older big cities while destination golf towns like Myrtle Beach are lowering green fees to attract players.

Much of the glut has been driven by builders trying to enhance the value of upscale housing developments.

"What you had was an almost crazed influence of real estate development without paying close attention to the marketplace," said Darrin B. Davis, senior project director at the National Golf Foundation. "Golf was seen more and more as the amenity that sells the project." Many developers dressed up their high-end housing with even higher- end golf, building courses that often cost more than $7 million.

"Developers went in with the mind-set that `I am going to build the toughest golf course in the state,' " Mr. Creed of PricewaterhouseCoopers said. "They built a Cadillac, when the market would only support a Buick."

Many developers knew they would lose money on fancy courses, Mr. Creed said, but they more than recovered their golf losses by charging premium prices on houses. Once all the houses sold, he said, developers often sold their courses to management companies, at 50 to 70 cents on the dollar.

It was a cinch this week, in the off- season, to get a morning tee time at Barefoot Resort and Golf, one of Myrtle Beach's newest and most expensive residential golf complexes. With a total development price tag of nearly $1 billion, Barefoot has four courses designed by big names in golf architecture - Pete Dye, Tom Fazio, Greg Norman and Davis Love III.

"We know the market for golf is flattening," said Paul Kline, the director of golf at Barefoot. But he said the market for high-end residential golfing communities remained strong.

When the complex is completed, about 12,000 people are expected to live in houses and condominiums there.

"If you are looking at the overall big picture of this complex being successful, the stronger component will support the weaker," he said.

Between rounds inside the complex this week, Brian Smith, a golfer from Sacramento, said he feared that places like Barefoot were "going to have problems because they are mostly real estate ventures." But Mr. Smith, 41, a building contractor with a 13 handicap, said it was not his problem. He was delighted by the emptiness of the fairways.

“There is nobody out here," he said. "It is a ghost town."

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