How Myrtle Beach area golf courses have lost $21M this spring despite remaining open
Every golf course in the Myrtle Beach market has been permitted to remain open by the governors of North Carolina and South Carolina while most businesses have closed around them over the past six weeks because of the coronavirus pandemic.
But that doesn’t mean the courses and the industry have been saved.
Despite receiving the government reprieve, the market has suffered staggering losses in a vital spring golf season that is relied upon to financially carry the slower periods of the year.
The market has lost more than $20.77 million in cancellations as of April 23, with more expected through May 31 for a projected drop of 61.5 percent in revenue through the first five months of the year compared to 2019.
The statistics have been compiled and extrapolated jointly by the Myrtle Beach Area Golf Course Owners Association and Golf Tourism Solutions marketing and technology agency that promotes the Myrtle Beach market.
The revenue loss projections consist of only green and cart fees at golf courses, and do not include anticipated purchases by golfers of food and beverage, pro shop merchandise and lodging, or extraneous spending.
Will any courses, including some that were already struggling to turn a profit, be forced or choose to shutter because of the lost revenue caused by the coronavirus?
Ten Strand courses are closed at least temporarily for various reasons related to COVID-19, including seven courses operated by Founders Group International, which owns and operates 21 on the Strand.
They all may reopen. But there may also be some attrition in the market. “I think like every business sector … that’s a real possibility,” said Golf Tourism Solutions CEO Bill Golden. “I think with the courses a lot is going to be determined over the coming months. If this is going to extend through the summer and into the fall, how would that impact the golf courses?
“… We’ll see that in every business sector — there is going to be reductions and consolidation, and that’s a distinct possibility in the golf side.”
The numbers
The essence of the revenue loss is canceled golf packages that combine tee times with lodging and sometimes other offerings, and carry near premium green fees in the spring.
The spring golf season is considered the three months of March, April and May.
According to the MBAGCOA, which represents approximately 80 public-access courses from Georgetown to Bolivia, N.C., over the past three years the 92-day stretch has accounted for 35 percent of the total rounds played each year and a crucial 42 percent of the market’s annual revenue.
The market was off to a strong start for 2020 — as rounds were up 4.2 percent and revenue was up 6 percent in the first two months of the year — and was projected to have a big spring.
The booking of spring package rounds as of March 1 were up 3.2 percent at 325,143 rounds, putting the market on pace to play 357,000 package rounds through May.
“We were on track to have a very solid and strong golf season, really for the first five months,” MBAGCOA executive director Tracy Conner said.
Thus far, 51,000 package rounds have been played, with nearly all of them in March, and another approximate 40,000 rounds remain on the books, primarily after Mother’s Day weekend. Though future package rounds are being canceled en masse by the day.
“It’s still a moving target because we don’t know how Myrtle Beach is going to open back up,” Conner said.
The golf course owners trace the beginning of the impact on the spring season to be March 11, and from that date to April 21 rounds were down 56 percent and revenue was down 61 percent or nearly $13.23 million.
The two weeks of April 1-15 were even more severely impacted, with rounds down 62.3 percent and revenue down 81.6 percent.
“Even though it began on March 11, it became more and more severe,” Conner said.
Comparing May to last May, total rounds booked were already down more than 87,000 (55.4 percent) and package rounds are down nearly 68,000 (61.2 percent) as of April 23.
Last Friday was forecast to be the busiest day of the year on area courses with 18,000 rounds throughout the Strand, mostly package rounds.
Instead, courses have provided residents an outdoor recreation activity.
But demand has dropped well below what would have been the annual high, the average cost per round has decreased significantly from package prices and normal spring walk-in rates, and play on the busiest days has been limited by the number of carts at each course, as each player gets their own cart to accomplish social distancing.
“This is probably the first time in maybe Myrtle Beach golf history where the locals have unfettered access to all the golf courses in April,” Golden said. “That tee time today would have been tough to get this time last year. … The courses are very grateful to be open, but existing on local golf alone puts a tremendous amount of stress on the business from a financial standpoint.”
The local demand has allowed FGI-owned River Club in Pawleys Island to reopen last week after closing on March 25, and the Members Club at Grande Dunes opened for a few weeks to outside play before closing again for planned renovations.
The entire state will be impacted by the altered spring golf season. A study conducted by the S.C. Department of Parks, Recreation and Tourism found golf in the state in 2018 was responsible for an economic impact (direct, indirect and induced) of $2.59 billion, 31,434 jobs, $857 million in wages and income, $309 million in federal, state and local taxes, and 35 percent of state admissions tax collections.
Looking ahead
The golf market might be able to salvage many of the late spring package rounds if the city of Myrtle Beach reopens hotel rooms and short-term lodging rentals beginning Friday.
Counties and municipalities including Horry County, Georgetown County, North Myrtle Beach and Surfside Beach have already scheduled the reopening of hotels and short-term rental businesses such as Airbnb and VRBO on Friday.
People from areas of the country with a heavy concentration of COVID-19 cases as determined by the U.S. Centers for Disease Control and Prevention are forbidden from booking lodging, per an order by S.C. Gov. Henry McMaster. But anyone else can now come and have lodging.
“It’s encouraging to see there’s some movement towards opening up and it’s thoughtful and it’s measured and it’s controlled,” Golden said. “The last thing anybody wants to see is for this to flare up. Doing it in a way that’s controlled, thoughtful and phased in over time is smart, and hopefully those vacationers that are on the books for the last part of May, everything the destination is doing should help reassure them and give them the confidence to come down and enjoy their trip.”
Golden believes golfers with flights scheduled have probably already canceled their trips, so the package rounds remaining on tee sheets may be more likely to be fulfilled by drive market customers.
“The opportunity to have most of those rounds remain on the books will make a huge difference for the month of May for the golf courses and the golf packagers,” Golden said.
As of Wednesday, there are 211 positive COVID-19 cases in Horry County, including 15 deaths, according to the S.C. Department of Health and Environmental Control. In South Carolina, there are 5,881 confirmed cases and 232 deaths from COVID-19.
Georgetown County has 40 confirmed cases and three deaths, and Brunswick County (N.C.) has 43 cases and two deaths.
The MBAGCOA has given all of its member courses a comprehensive best practices and recommendations document for safety during the coronavirus that has continued to build over the past few weeks.
“Obviously the health and safety of the consumers and staff are of critical importance, as well as adhering to the regulations that the governor has outlined,” Golden said. “We wanted to make sure there was no stone left unturned in terms of our efforts, whatever golf courses or facilities could do to provide every reasonable precaution.”
A silver lining?
While the short-term effect of the coronavirus on the game will be economically damaging, could the long-term effect somehow be beneficial?
As one of the few outdoor activities available in many parts of the country for the past six weeks, Golden believes people may find a newfound appreciation for a game that has been floundering nationally for two decades. Especially if the golf industry embraces its inherent qualities.
“For years the industry has been trying to change it — we need bigger holes or we need three-hole rounds or six-hole rounds,” Golden said. “The reality of it is the game is fine. The game has always been fine. It’s consumer behavior that has changed. But will this virus and this pandemic remind us what’s most important in our lives and will golf be a part of that, and will a resurgence of golf in the future be part of it?
“… Once people get out and realize that it’s okay to play golf, and it’s okay to turn the phones off for four hours, and it’s okay and fun to be with their friends and loved ones and participate in a sport in the outdoors, why won’t it be okay this time next year? We need to embrace that and not shy away from it.”
This story was originally published April 30, 2020 at 8:51 AM.
