Tee time

Stephen Lewis, Chief Executive, Crown Golf has a vision for change: both for the golfing industry and his business. Heather Gibson met him to find out more

“We want to bring new people into the game of golf and provide more affordable golf. I think the sector has got to get much more dynamic. There will always be peak demand for playing time, but the real challenge is how to attract new customers.”

Crown Golf has a turnover of £51 million and owns 33 clubs in England, making it the largest operator in Europe. It is owned by a single shareholder, Jeff Chapman, under the name of The Bennelong Group, an investment and funds management business with commercial and philanthropic interests in Australia, the UK and the Middle East. Its charitable arm, The Bennelong Foundation, donates 10% of its profits each year to support worthy causes. Last year Crown Golf was named Golf Group of the Year, partly in recognition of its initiatives in encouraging women and disabled members to the game. The launch of its Junior Academies for players under 18 now has 1,800 members. Given that the majority of members are male – 88% – and between 45-64 years of age, it is little wonder that golf is arguably still perceived as a ‘rich man’s sport’.

“Historically golf has not had targeted advertising. We need to be much more sophisticated in our marketing in order to be able to attract certain groups: women, the 18-30 market, who we call ‘the missing generation’, and the over-50s market. Not everyone will be looking to swing the club like Tiger Woods, so sociability is also important and there are subtle differences that need to be developed, by making it more family friendly, for example.

“We have set our stall out. We support the disabled mrket, have adapted some of our driving ranges and offer training programmes.”

Crown Golf has three separate operating markets: proprietary membership, ‘pay and play’, and resort golf via its redeveloped St Mellion property in Cornwall, designed by Jack Nicklaus. In addition to attracting new members, Stephen wants to create more competitive pricing structures that enhance value for money.

“In terms of affordability the membership model is relatively simplistic from a retail pricing perspective, and to meet the needs of the modern-day consumer
there needs to be a more creative approach. With reference to pay and play, the pricing strategies have to become more varied and more targeted, similar to other industries such as aviation, where the time of day or length of flight influences the cost.”

“I have worked in a lot of membership environments, including golf and health and fitness. The UK consumer enjoys belonging to a club environment – in health and fitness members want that sense of belonging, while in golf they have a sense of ownership. It’s actually about managing that expectation with the commercial needs of the business.”

Attention to detail is important to Stephen’s approach. He comments that improving hospitality for guests is important for creating the social atmosphere needed to support the attraction of new groups, and encourage members to see the club as a destination rather than simply a clubhouse. “I have often said that if you get the coffee right you get the business right. For me, that is symbolic, as the chances are if we can get this part of our business right. I am flexible about the style of catering, but would like to broaden the range of facilities such as health and fitness.”

As EP goes to press Crown Golf will celebrate the launch of an 80-bedroom hotel at St Mellion, part of a £100-million investment programme. Part of the original vision was to host the English Open from this year, an event that was last held at Forest of Arden in 2002. Crown Golf’s commitment was £20 million, which Stephen confirms has been fully invested and spent on upgrading the facilities and putting in infrastructure for the development of 265 holiday homes. However, the property developer responsible for building the homes went into administration earlier this year, creating a difficult problem. Given that the homes were needed to provide essential accommodation required to host the English Open, the decision was made to postpone the event in 2011.Stephen reiterates that the business is fully committed to the 2011 event and has invested in the rights to do so. It’s a key tourism initiative, given the positioning of St Mellion as a golfing destination.

“St Mellion is unusual in our portfolio in that it is a resort development. The real excitement has been  the level of support from the local community and its impact on the area. It is enabling us to develop a lifestyle concept.

“Since the problem arose, we have been able to rethink our strategy. We will see our part of the development through. In the end we were able to gain forfeiture of the lease from the housing developer and regain full control of the site, and are now in the process of speaking with new partners.

“Apart from everything else, it is very important to the people of Cornwall in terms of raising its profile, given that it does not host many international events. We are very committed to the English Open and supporting the heritage of St Mellion being part of the European Tour, as it has been in the past.”

The rest of the development is fully complete and St Mellion’s positioning as a resort destination is well under way. Stephen confirms that the residential developments are a key part of the investment, but he is in no rush and will make the next move when market conditions allow.

The business of golf is distinguished in the UK from its counterparts abroad because 70% of the revenue generated is from golf activities. In contrast, 80% of revenues elsewhere are from property investments, as golf courses are built with the premise of selling off real estate surrounding them. According to Stephen, St Mellion is an extremely rare site in the UK as it combines both a golf course with residential development potential.

“The idea for the St Mellion development was  first conceived more than 25 years ago and we wanted to take the original vision and put the venue back on the map in terms of the range of facilities provided. What will be achieved is that it will be more of a family destination that includes both golf and other services such as health and fitness. It is interwoven with the  local community both as a membership club and as a major employer.”

Stephen was appointed just over a year ago, having held positions with Wentworth, Pinnacle Leisure, Elixia Heath and Fitness and most recently as managing director of TopGolf.

“My strategy is quality not quantity, as we have a lot of existing property that we can invest in and increase our return. We have a programme for topping and tailing the estate – having recently put three sites on the market, two are in the process of being sold, and we will churn some of our estate from time to time.”

On a positive note, trading is currently ahead of last year, despite the economic environment. Though corporate activity has been  mpacted by the downturn, both the pay-and-play market and proprietary membership are still active, which Stephen believes is a reflection of the nature of the sport.

“We are the affordable end of the market, but the truth is that a decision to give up golf is about giving up friendship. Often it’s an economic or time-related decision, so we’ve introduced some dynamic new membership options this year which have given our customers a greater feeling of security.

“I have always been interested in being the best rather than the biggest. For me this is about developing a culture that can deliver success, and that is a combination of clear leadership and an open, respectful environment. Above all it is about always driving through change. I want to look at the way we are doing things and make small changes for the better year-on-year. In addition, I recognise Crown Golf’s responsibility to set standards in the golf industry for having fresh ideas, and to inspire other golf operators to introduce their own changes for the better.”