Forecasters who are predicting better economic times for Michigan in 2012 might be reading the tea leaves at Treetops Resort in Gaylord. The golf industry of late has been treading water, but the resort posted record numbers last year across the board — rounds played, hospitality, and retail sales. “In January alone, we surpassed our 2011 total for corporate and association bookings in our meeting facilities,” says Barry Owens, CEO of Treetops and a longtime resort operator.
During a winter that was generally depressing for many of northern Michigan’s recreation businesses that rely on heavy snowfall, Treetops recorded an 18-percent increase in business. The winter hike followed last year’s golf season, which reached record numbers for golf rounds played: 80,000 on the resort’s five courses. It was a 60-percent increase over the 48,000 rounds played in 2010.
For Treetops, which only a couple of years ago was the subject of bankruptcy rumors, 2011 was seen as a critical period in the resort’s 25-year history. What’s more, the resort is a major economic engine for Otsego County. The annual payroll includes 400 seasonal employees and 80 full-time positions — which, combined, pumps $4 million into the local economy. Patrons chip in millions of dollars more in golf fees, accommodations, gasoline, food, drink, and retail sales.
The late Harry Melling, owner and president of Melling Tool Co., an automotive supplier in Jackson, founded the resort. Melling was also the successful owner of a race team on the NASCAR circuit; his team, with driver Bill Elliott, won the 1988 Winston Cup championship — stock car racing’s pinnacle achievement at the time.
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Melling bought the sleepy and outdated Sylvan Ski Resort in Gaylord in 1983, and set out to turn the property into a national golf destination. He hired famed course designer Robert Trent Jones Sr. to carve out the first 18 holes, which were completed in 1987. Given that it was the last major project Jones wrapped up before his death at the age of 93 in 2000, golf aficionados return every year to revel in the mystique. It was Jones who coined the name Treetops as he looked out over a 30-mile view of the Pigeon River Valley.
Tom Fazio, another of America’s heralded golf architects, designed the second course. Rick Smith was a little-known golf pro from Ohio when Melling brought him to Gaylord to be director of the golf program. Smith, with Melling’s backing, went on to become one of America’s most highly- sought-after coaches, especially among PGA Tour players like Phil Mickelson. Melling also gave Smith his start as a course designer; Smith produced the other three courses at the resort.
Smith’s Signature design and the Jones and Fazio layouts have all achieved national acclaim. Unfortunately, the cigar-smoking, hard-drinking Melling died of a heart attack in 1999 before he could accomplish his goal of building seven courses at Treetops, one for every day of the week.
Working with the Melling family, Smith quickley pulled together a cadre of investors and bought the resort. Smith served as managing partner for the group that included Melling family members; Mickelson; Red Polling, former chairman of Ford Motor Co.; Al Wisne, former owner of Pico Corp.; and John Bates, chairman of Heidtman Steel, among others.
The course proved mildly successful under the new ownership team, but it didn’t last. A succession of out-of-state managers unfamiliar with the nuances of the seasonal resort business in northern Michigan, coupled with the economic recession in 2008, drove Treetops into a downward spiral.
Ironically, it was a similar decline of the once-prosperous family-owned Garland Resort in nearby Lewiston that brought salvation to Treetops. Garland’s founder, the late Ron Otto, was forced to sell the resort in 2009 due to a sharp decline in sales. Owens, Otto’s son-in-law and Garland’s president, left the resort in the spring of 2010 and was immediately hired by Treetops as a consultant.
Although Owens was looking to get out of the hospitality business, after six months the partners persuaded him to stay by giving him complete control of the resort. “Obviously we have the right people in place now,” Smith says. “Barry has been a friend for 30 years. He knows the northern Michigan resort business, he is very experienced, he knows the market, and he has all the right contacts. He’s a creative guy, he brought a whole new perspective to Treetops.”
Paul Beechnau, executive director of the Gaylord Area Chamber of Commerce, says the community was in an apprehensive mood when Owens took over. He notes that the number of rounds played last year on the area’s 17 courses were up 13.5 percent — revenue from golf sales was $10.5 million, and room sales were $11 million. Treetops accounted for about 20 percent of that total.
“It’s a combination of things,” Beechnau says of Treetops’ success. “The Michigan economy is turning around, the Pure Michigan ad campaign is kicking in, and Barry Owens has brought in a whole new approach. He’s a marketing guy, and he knows the area.”
The turnaround plan wasn’t as simple as overhauling the marketing campaign and adding social media tools. Owens says he immediately addressed the “can’t do” attitude of the staff.
“When I came in, there was a fabulous staff already here; we’ve only added a couple of people in certain spots,” Owens says. “The problem with the staff was a cultural one. They were hamstrung by years of being told they could not do this or that, rather than focusing on what they could accomplish.”
He says he got the staff to buy into setting personal goals, and then held them accountable. “There are a lot of people here who were on staff when times were good and my message was, we know it’s a tough time now but let’s find a way to do what we have to do,” Owens recalls. “They responded well to the challenge and welcomed it.”
Another area that received an overhaul was the sales group. “They really had no goals or incentives, as they were mostly salaried,” Owens says. “We tasked them to set goals, and created a more rewarding structure for sales. It was gratifying to see they welcomed that change. They were starving for direction.”
Owens also borrowed a page from Economics 101. “When the economy went down, the number of golf rounds played went down and we realized we had to cut prices to give consumers the value they wanted,” Owens says. “We cut our prices and made packages affordable, and it started to take off.”
The resulting surge in revenue allowed the resort to budget $400,000 to upgrade various course attributes. The work will be completed this year. Other improvements include general cosmetics like new paint. Down the road, the resort plans to renovate its 240 guest rooms and suites.
The restaurants, the sports bar, and the ski operation were redone this winter. Other improvements were made to the skier service building, retail sales, the ski school, new lockers for season-ticket holders and daily skiers, and a VIP parking area for skiers with seasonal passes, among other updates.
Owens says the lack of heavy snow in Gaylord didn’t hurt his ski business as much as it did other major resorts. Nights were cold enough to make snow and cover the ski runs throughout the Pigeon River Valley.
Another small — yet profitable — move turned on Owens’ ties to Garland Resort. Last fall, Garland abruptly announced it would close and reopen in May. Owens immediately moved in and signed away one of the resort’s assets, the entertainment duo of Jeff and Sue Cult and their classic rock video show. The performers were the house band for 15 years at Garland, and had a loyal following.
To make way for the popular duo, Owens remodeled and reopened Hunter’s Grill, an expansive restaurant set on a Treetops valley that had been closed for nearly five years. The restaurant was converted into a nightclub, complete with a tapas menu, fine wines, and craft beers. “We have people lining up to get in, both resort guests and local people,” Owens says. “Their fans that travel here for their shows get a special rate to stay overnight.”
Owens and Smith say the 2012 golf season will see even more new attractions. The major news is the return of the Par 3 Shootout, a winner-take-all golf tournament that was produced and shown on the Golf Channel during a popular eight-year run.
The format was simple. Four top PGA stars played for a pot that surpassed $1 million on a diabolical nine-hole course designed by Smith. The course is regarded as the most challenging par-3 layout in the country.
Since 2000, legendary players like Jack Nicklaus, Arnold Palmer, Lee Trevino, Raymond Floyd, and Fuzzy Zoeller, and modern stars like Phil Mickelson, Lee Janzen, and Freddie Couples, found their way to Gaylord to compete. In 2001, Trevino, a huge fan favorite, sank a hole-in-one on the seventh hole. It was the richest single shot in golf history, worth $1.1 million. A grateful Trevino donated half of the money to charity.
Smith says he is negotiating with NBC to re-create the nine-hole tournament on The Golf Channel (which NBC owns), possibly with as many as 10 players competing in a different format. “The Par 3 was a great boost for Gaylord, and for golf in Michigan,” Smith says. “We’ve had winners of seven majors and 45 PGA championships play in that event.”
In turn, Smith will be taking a more active role in the resort’s golf school, where he began his meteoric rise to the top tier of golf instructors in the country. He admits his most previous role as managing partner took him away from the things he does best — serving as the resort’s corporate ambassador and celebrity teacher. “I’m going to be a lot more involved; I will be back teaching in the academy,” he says.
Smith has a long-term plan for his golf school at Treetops. He also stays busy commuting monthly to China, where he and Mickelson are partners in a golf course design company. He says they have contracts to design and build 10 golf courses for privately owned club owners.
“We’ve just finished the third course and in time, with the contacts I’m making over there, I hope to get some of the top Chinese junior players to come to Treetops to train and compete against our top juniors. That will be a neat thing.” db
