‘Great golf is doing well’

CEOs of large golf management companies are busy figures at major industry events.

A meeting here, a greeting there, a few dealings in between, and suddenly they are on whatever plane their job requires them to board next.

With his company now managing 124 properties, KemperSports CEO Steve Skinner has developed incredible insight into the condition of the industry. The company had one of its busiest years in 2015, as Chambers Bay, the municipal course it manages in University Place, Wash., hosted a U.S. Open memorable for multiple reasons, including an exhilarating finish, massive crowds filling a course built on a tremendous scale, and the invasion of Poa annua on hardened fescue greens. KemperSports also made history by becoming the first management company to oversee a U.S. Open venue.

Chambers Bay is one of several high-profile courses managed by KemperSports. The company also manages Bandon Dunes Resort on the Oregon coast and Streasmong Resort between Tampa and Orlando. Coming attractions include Sand Valley in central Wisconsin, Mossy Oak Golf Club in Mississippi and a third course at Streamsong. The trio of projects are receiving substantial buzz, especially considering the dearth of new projects in the United States.

GCI met with Skinner, a KemperSports executive since 1998, at the PGA Merchandise Show in Orlando, Fla., to discuss some of the company’s properties and the role golf plays in attracting customers to high-end resorts.

GCI: Where is KemperSports at to start 2016?
SKINNER: “I think we’re in a really good position. We had a really strong 2015. We really saw some good play at our properties, good revenue growth. We are feeling good. The industry is still challenged. It’s a tough industry, but we really feel we have a lot of momentum going into ’16 and have several projects under construction, which is exciting.”

What’s the key to financial success in the golf industry right now?
“There’s a couple of things. A good location is key, a unique product and unique vision for the property, and then great service because everybody is looking for value. What we have found recently is the higher-end properties are doing better than some of the mid-tier and lower-end properties. People are willing to pay for a good service and a great experience, so that’s really where we are seeing our success.”

Three properties that stick out in everybody’s mind that you manage are Chambers Bay, Bandon Dunes and Streamsong. When did you realize there was a market for that type of natural golf and how has that market grown?
“The Bandon experience really set the stage for that and Mike Keiser, who developed it, gets a lot of the credit for it because it was really his vision. He often tells the story when we were first building Bandon and it first opened, we frankly didn’t know how many people were going to come. I think in the early years the over-under was 13,000, 14,000 rounds, and 35,000 came in the first year. As we continued to develop that, it really grabbed everyone’s attention looking for something different in golf. And then it has grown from there. Chambers Bay being next, built in a similar philosophy, and some of the others have done it. Whistling Straits did in Kohler, and Streamsong has really proven that you can do it away from the ocean. The other question was, ‘If you are not on a big body of water, can you do it?’ We’re looking to take that with Mike elsewhere. Sand Valley in Wisconsin is going to be similar. Not on a body of water, but open, massive sand dunes. It’s exciting.”

What did you learn from Chambers Bay last year?
“It was a lot. It was a great experience. As we talk to our people afterwards we really learned how much attention a U.S. Open brings to every little thing. Our people really worked hard, worked very closely with the USGA. It turned out to be a great event. There was a lot controversy on the conditions of the course, but that was really driven by the USGA’s decision to turn off the water and make it really fast and firm. In a lot of ways, they got what they wanted. They got a great champion, record crowds, a lot of attention. It really what ended up being a great tournament.”

Did the U.S. Open help the business of Chambers Bay, hurt it or have no impact whatsoever?
“It had a huge impact in the business. In the community itself, it was a $134 million economic impact. We just received the stat that 43 percent of the play comes from outside the Northwest. People have come from 40 different countries because they want to see it. It has helped a lot. It’s in great shape. As you know, it’s a different environment playing fescue-based golf. It’s not what Americans are typically used to. It’s not Augusta National, but it’s not designed to be Augusta National. What we have found is that most people love it, but there are some people that don’t like it. They just don’t get it.”

At Streamsong and Bandon the golf courses were built first and then amenities were added. Is golf and quality course conditions still the product that drives people to these resorts?
“To the resorts that we are involved in that are really successful, golf is what is driving it. That’s the key to the success at Bandon. It’s focused around the golf experience and that’s how it started Day 1. It’s all about the golfer. It’s all about the guest. It’s about golf and the great golf experience. But each resort is a little bit different. At Streamsong there was a dual purpose. It was not only to have great golf, but a meeting center and conference center. That was a little different model. But what has been proven at Streamsong is that golf is what’s driving it, great golf. I think that’s important because a lot of people over the last 20 years have built a lot of golf, and a lot of courses are struggling. But really great golf is doing well. People that cut corners, people that don’t have as a good of a piece of property and are doing it just for money … Without the great golf, you’re really missing the mark.”

With that said, how important is it for a company like yours to give the maintenance and agronomic people the resources to succeed?
“That’s really our job. We are very decentralized and we hopefully give the superintendents some tools, resources and training they need to help them. But really we look to hire really strong people and give them the freedom to run their property. They know what’s best. They know their property. We are not a cookie-cutter approach company. We don’t have a maintenance model. Ken Nice at Bandon knows every inch of the property, Rusty Mercer at Streamsong knows every inch of that property, and they know better than we do what’s going on. What we try to do is give them the tools and resources to do their job better and make it easier on them.”

One thing I have noticed in my travels are a lot of the big, big renovations, the multi-millionaire dollar renovations, are at the resort-type properties. Is there an arm’s race going on with some of these high-end properties?
“With the downturn in the market in 2008-10, people didn’t spend a lot of money in resorts and reinvesting. I think now they are feeling better about business, better about the economy. Money and financing is freed up to move it forward. Everyone is trying to keep up and win that race. Occupancy rates and play at the high-end resort courses have improved a lot and are doing well. That’s why the money is freeing up to reinvest.”

What would be a successful year for KemperSports and what would be a successful year for the golf industry as a whole?
“That’s a great question. Success for us is really continuing to grow the company at a manageable rate and have some great courses, some great experiences. We have several under construction. We have Streamsong Black, Sand Valley and we have the guys at Old Waverly-Mossy Oak. We want to get those properties launched properly. For the industry as a whole, we want to see growth, not only in the number of players and rounds, but also seeing continued growth in the younger generations of players, the millennials and youth. I think we have seen that. The NGF is launching some data during the show about really strong growth among junior golfers. We need to take that and move them through the pipeline?

What is your strategy for attracting the younger generations?
“The core of the industry has been for so long around the Baby Boomers, and the Baby Boomers are aging quickly. Every generation is a different generation and we do a lot to try to attract millennials and try to cater to them because they are a different model. They are not their father or their grandfather. They want things differently. They want shorter, quicker experiences. They want experiences tailored to them. That’s why we spend a lot of time on that because that’s where the industry needs to get. So far in the industry, the millennials have not participated at the same rate as the preceding generations have. That’s really a big challenge.”