Pandemic impact: Why the largest management companies could grow larger

Troon, ClubCorp, Arcis Golf, KemperSports and Billy Casper Golf make the top five list of the largest management companies
  • Top management companies in golf

Golf was poised for a strong year, and the industry’s largest management companies were enjoying that success. 

But once-in-a-century pandemics have a tendency to shake things up. 

“It came upon us very quickly,” said Tim Schantz, CEO of Troon, the world’s largest management company.

Indeed, on January 30, the World Health Organization declared COVID-19 a world health emergency. States began declaring health emergencies about one month later. By mid-March, a growing number of states were ordering people to stay at home. 

And just like that, the golf industry was searching for a new normal, management companies included. 

Troon, which manages 417 18-hole equivalent golf courses in different locations in most every state in the nation and 30 countries, was faced with a mix of orders and regulations. Each facility had to adhere to the local orders and rules. 

Indeed, those rules could even vary within states because a local municipality may have had its own particular guidelines, noted Tim Schantz, Troon’s CEO. 

“It was different in every location,” he said. 

But this was a moment for third-party management companies to show their stuff, he said. Troon, because of its size, has a wealth of resources to help its clients, he said. 

Not sure how to deal with employee rights? Troon has a small army of H.R. experts at the ready. Confused about legal issues? Troon has more than a dozen attorneys and paralegals on staff.  

And that’s not even taking into account the on-site management teams in place, which take care of day-to-day operations. 

“I’m not trying to paint a picture that we weren’t impacted,” he said. “That would be absurd. However, our focus has been making sure all of our clients can weather this storm.”

While the pandemic put considerable pressure on management companies, there may be one silver lining: It could generate more business.

Self-managed clubs may have been overburdened by the challenges the pandemic brought and may think about looking at third-party management, a number of these management leaders said.

“We continue to attract new clients and locations,” said Schantz. “We feel very positive moving forward.”

How a Troon-operated club fared compared to one down the street might convince the one down the street to explore options, he said. While self-managed clubs certainly had resources at its hand to learn best practices —the golf industry has been sharing such information on a number of platforms, after all — the clubs still had to rely on the team they had to put them in place. And that can be limiting, Schantz said.

It’s a misconception that just struggling clubs seek outside help, he noted. Those running a club may be growing overwhelmed by the responsibilities — particularly when hit with a challenge as great as COVID-19.

David Pillsbury, CEO of ClubCorp, said his firm would be exploring adding clubs, too. 

“When there’s a crisis, you need trained professionals,” he said. Some clubs rely on a board of directors to make key decisions. In cases, they are not savvy club administrators. Additionally, many have high-level careers, and they could be facing pressures connected to COVID-19 professionally as well. That could limit what they can do for the club. 

“That’s not their primary business,” he noted. 

Blake Walker, CEO and founder of Arcis Golf believes demand will rise as well. 

“Yes, there is no question that there will be an increased demand for professional management post-crisis,” he said. “Arcis will continue to provide third-party management for strategic partners on a select basis.”

Steve Skinner, CEO of KemperSports, remembers back to the recession, in 2008. “The phone started ringing more,” he said. 

Billy Casper Golf manages a lot of municipal courses, and local governments may need more management help moving forward, said Alex Elmore, president of Billy Casper Golf. Budgets are going to be tight because of the expected drop in tax revenue from the economic impact of COVID-19.

“I think there are clear opportunities moving forward.”

He also thinks that the management companies will be well suited for an increased role in the golf industry. 

“As we live through it, we are learning a ton,” he said. “And that’s only going to make us better at what we do.”

 

Editor's note: This is the first article in a three part series on the top management companies in the industry. 

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