Corporate Golf's Day of Reckoning

The game's decline teamed with the tax act present obstacles for the player who wants to do business on the course

The nation’s last two presidents have been roundly booed for their passion (obsession) for golf, a game (elitist pursuit) that takes four hours (the better part of a day) to play and another one for post-round socializing (drinking). Is it any wonder that CEOs, meeting planners and the resort sales folks who bank on corporate outings could be feeling a little self-conscious about mixing golf and business?

“It’s not the boondoggle it was back in the ‘80s, when you’d meet half the day, call it a retreat and write it off, then play golf and drink the rest of the day,” says Jeff Howell, sales director at the luxurious Lodge at Flying Horse. “The groups I do now, a lot of new companies, very successful companies, they’re really intense. As sales director with the Lodge, I don’t think I’d have the pull with the high-end executive groups we target if we didn’t have a golf course. But it’s less than half the use I thought we were going to do.”

There was a time when golf was thought to help, not hinder, business prospects. Says Larry Rinker, director of instruction at Red Sky Golf Club, “I think the golf course is still a viable place for business. It definitely helps team building. It also helps customer relationships. If you have a client that really likes to play golf and you can get him on Augusta National or Cypress Point or someplace hard to get on, he’s going to make his best effort to meet you and play golf there. And now, instead of 15 to 30 minutes in his office, you’re going to spend four or five hours with him. … That’s why a lot of deals have gone down on the golf course.”

That was true enough to inspire women in business to take up the game and form networks such as the Executive Women’s Golf Association (1992). But more recently, studies have conflicted on whether golfing CEOs hurt or help their companies. In 2014, Forbes looked at the handicaps of 10 of the nation’s top executives and surmised that the better the golfer at the helm, the better the company’s stocks performed. A broader 2016 study of more than 350 handicap-holding CEOs of S&P 1500 companies found the reverse: “CEOs that golf frequently are associated with firms that have lower operating performance and firm value,” the researchers concluded.

How much golf is too much golf? President Obama was criticized for his 333 rounds over 8 years – about 42 rounds a year. President Trump is hearing boos for having played at least 44 rounds, perhaps more that went unpublicized, in his first year in office. So, what’s optimal for a golfing executive?

“I don’t think they can really do their job if they’re playing (too) much golf," Rinker says. "If they’re taking a Wednesday afternoon off to go play and then play on weekends, I don’t think anybody’s going to beat them up for that, if they’re performing.”

One might argue that executives today are always working. Yet, plenty of golf courses still prohibit cell phones. Rinker points out that more and more private golf clubs are offsetting that prohibition by creating spaces like old-fashioned telephone booths, where business can be done on phone or laptop. At Castle Pines, he said, there are at least two such small virtual meeting rooms in the men’s locker room.

Rinker and others in golf hope the surging economy will help their industry, which has suffered great losses in facilities and participation, a more than 20 percent decline in the latter since it topped out near 30 million players in 2006. But the 2017 Tax Cut and Jobs Act has wielded a crushing blow. Golf, which used to be deductible as a business expense and then was demoted in 1993 tax reform to a 50 percent entertainment deduction, has been further demoted to nondeductible.

“In our case, (green fees are) $179 in season,” Howell says of Flying Horse, a private club accessible only to Lodge guests. “If you go to Broadmoor, you’re looking at probably $235 and up. So, it’s not one of those things you can automatically take out of your pocket and say, ‘Hey, these guys can pay for their own golf.’ If they can’t write it off, it’s almost a waste of time for them.”

The Lodge at Cordillera couldn’t make it even with the write-off and access to three acclaimed courses; the 54-unit luxury property is being converted to a drug addiction treatment center. No wonder even the state’s most prestigious stay-and-play destination has widened its attractions. The historic Broadmoor, with three glorious golf courses and credentials including the 2011 U.S. Women’s Open and this year’s Senior Open, presents its groups with long lists of activity options, including falconry, mountain biking, caving, rock climbing, laser tag and other team-building games.

At the exclusive Vail resort Sonnenalp, summer meeting groups opt for fly fishing or whitewater rafting before golf. Keystone lists skiing, riding, tubing, cat tours, snowshoeing, ice skating, mountain biking and guided hikes as alternatives to golf.

But Philip Tobias, PGA Professional at Keystone, hasn’t given up on enticing meetings to play the resort’s two golf courses. “Playing golf at 9,300 feet above sea level is an experience in and of itself!” he enthuses. “The golf ball travels much farther at elevation, allowing guests to hit some of the longest drives of their lives.”

Tobias advises customization for adapting golf to the needs of the group. If some don’t know the game, he’ll provide lessons before the round – or send out a staff member to give tips and point out vistas. He’s helped groups shorten their time on the golf course by creating an 18-hole short course of par threes, or a scramble format with par as the maximum number of strokes on each hole. Six-to-nine-hole putting courses have also been a hit with meetings pressed for time but in need of some fresh air.

So, the corporate game is still on in Colorado. It’s there, if you dare. See our list of possibilities.

Categories: Human Resources