Back from the Brink

How the owner of three golf clubs in metro Detroit survived the 2008 global financial crisis by dropping stringent membership requirements, developing a unique hotel partnership, and introducing offerings to appeal to time-starved executives.
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As a successful owner of three golf clubs, Mike Bylen thought he had a good grip on the industry. But not until the economic fallout from the 2008 global financial crisis finally took a chunk out of his business did he gain a new perspective.

 “About three years ago somebody said to me, ‘So you think you are in the golf business’ — and up until then, I was thought I was in the golf business,” Bylen says. “It wasn’t until we talked a little more that I realized I’m actually in the car business. I just operate some of the car company’s recreational amenities.”

The near-collapse of General Motors, Chrysler, and numerous automobile suppliers, along with a sharp pullback in consumer spending, saw play at Bylen’s clubs — Shepherd’s Hollow in Clarkston, Pine Trace in Rochester Hills, and Cherry Creek Golf and Banquet Center in Shelby Township — plummet 30 percent almost overnight. Additionally, corporate entertaining, golf club memberships, and other related perks literally disappeared. 

“Somebody walking in here with a company credit card paying for four people was a big part of our business,” Bylen says. “We might have had 12 to 15 groups a day doing that here. When the (auto) companies began losing money, they stopped entertaining, they stopped the golf outings, and they stopped the foursome one-on-one type entertaining.”

To wean his business from being so reliant on the auto industry, Bylen and his managers scrambled to identify new sources of revenue. Apart from hosting more weddings and other parties, he discovered a previously untapped pool of golfers that, for all intents and purposes, were immune to the rise and fall of economic cycles in Michigan. And the best part? They lived nearby — in Canada.

“I noticed three years ago that Canadians were showing up at an increasing rate at our golf courses,” he says. “The Canadian dollar was nearly at par with the American dollar, (so) their buying power was greater.” He also learned Canadian courses were often poorly designed, lacked maintenance, and cost more to play.

“Many (Canadians) had been going up north for years, but in going up north they wasted a day going up and wasted a day going back,” Bylen says. “I realized there was an attraction here (in metro Detroit) where they could wake up in their bedrooms in Toronto, or London, or all parts of Ontario, come here and play 18 holes, stay for a few days, and then play the morning and go home and be in their beds that night.”

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To propel his business, Bylen devised a stay-and-play partnership program with Marriott Corp., which included the Troy Marriott and the Auburn Hills Courtyard by Marriott. “In that first year — really, the first two months — we did $9,000 in green fee revenue,” he says. “In 2011, we went to several golf shows and promoted the program, and we did $105,000 in (new) green fees, and $40,000 in food and beverage.”

 

Knowing a good swing when he saw one, Bylen went all-out this past winter. The team attended multiple golf shows in Ontario as well as throughout Ohio, hitting the big cities of Cincinnati, Cleveland, and Toledo. “Each of those shows has already paid for themselves,” he says. “Our goal is to double (revenue from) last year, and I believe we will hit it.”

Now, as the Big Three have returned to profitability, Bylen says he is reinventing his corporate business strategy, taking into consideration pressures on times and costs. “I think businesspeople have to be accountable for the time away from the office, and that time away has to be productive,” he says. “So they are not only using the golf course to strengthen relationships, they are also using our clubhouses to do business.”

Taking cues from the changing behavior of business clientele, Bylen and his managers devised the Preferred Partnership Corporate Golf Program, which consists of three tiers of golf-related entertainment functions ranging from rounds of golf to outings, business meetings, social events, and holiday parties — all in one package.

With perks like club memberships and expense accounts going the way of the V-8 engine, Bylen’s corporate program gives managers enough horsepower to work golf club entertainment into their annual budget.

“You pay one time for everything for a year, and unlike a club where a member has to be present with guests, the companies have complete flexibility,” he says of the packages, which range in price from $10,000 to $50,000. “If they want to give golf to the marketing department for a promotion, they can do that. If they want to give it to the sales department, they can do that. They can spread it out throughout the company and, unlike a private club where a member has to be present with guests, our corporate clients can send whoever they want to our facilities without having to be there.”

An example is the Silver package. At $10,000, it includes 12 tee times for foursomes, dozens of logoed golf balls, use of the driving ranges and practice facilities, and a golf outing for 30 people that includes food and beverage service. In addition, the Silver package offers a 20-person holiday party and a 30-person social event that can be held at any of the three golf clubs.

 

Participants also receive a 20-percent discount on all food, beverage, and apparel purchased at any of the three clubs, as well as a corporate sponsorship of the Special Olympics of Golf, which Bylen has staged for two decades at Pine Trace; and the Wounded Warrior project, a charity event for armed services veterans he began at Cherry Creek last year. The Gold and Platinum packages offer more services and amenities.

Bob MacDonald, sales director for auto supplier Hutchinson Sealing Systems in Auburn Hills, has utilized the corporate program for three years. Instead of buying in at one level, he customized his program by selecting portions of each of the three to suit his needs. “First and foremost, there are three clubs,” he says. “A lot of executives with a club membership have 18 holes, and they play the same course over and over and over.”

He also appreciates that everyone at his company is eligible to use the program. What’s more, the one-time fee spares him from filling out multiple expense reports. “If I have an employee that I think did an outstanding job, I can say, ‘Go out and use the club with a couple buddies, or with a customer,’ and I don’t necessarily have to be there,” he says. “If it’s a membership at a personal club, then I have to constantly be there entertaining or taking people out.”

With Bylen’s emphasis on food and beverage service, he lured back Executive Chef Erle Webber, who was hired by the then-Ritz-Carlton in Dearborn (now The Henry) several years ago. Thanks to other hires he’s made, Bylen says his management team is stronger and more attuned to listening to customers.

Another recent advance is a weekly staff meeting where the ever-changing business climate is the first order of discussion. Following a presentation, team members challenge one another to find new revenue. As in a brainstorming session, no one idea is singled out for ridicule.

“We did three weddings at Pine Trace in 2010, six in 2011, and nine last year. Now we’re pushing to surpass that number,” Bylen says. “Cherry Creek, on the other hand, which is set up for weddings, did more than 50 last year. We previously didn’t do weddings at Pine Trace because we didn’t need them, but we do now.”

Another area where a veteran staff has been invaluable is in the efforts of his three course superintendents, who ensure their annual budgets are utilized as efficiently as possible.

“We’ve been able to buy more products for dramatically lower prices and the suppliers have been able to make more money within the transactions, as well,” Bylen says. “There are a number of reasons for that — timing of purchase, quantity, method and timing of payment, terms and opportunities that come up, and being able to take advantage of them. Depending on the time of year we might buy more than we normally would, we might pay for it sooner than normal, and especially with the (value) of money today, if I can pay six months early, I do it.” db

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