Sam Alley, CEO of VCC in Little Rock, knows a little something about what makes people tick and how to spot talent.
As a teenager immigrating from outside Jerusalem to Rose City, Arkansas, he learned that similarities within people far outweigh differences in culture, language and skin color. As CEO of the largest retail contractor in the United States, he refined his process for sizing up talent and putting people to work in the right roles to move objectives forward. And as a businessman, he’s at his best when evaluating opportunities, based on the people behind them.
One key weapon in his arsenal for achieving all of this: the golf course.
“Golf, first and foremost, is an effective friendship tool,” he said. “There are few better ways to get to know someone intimately than to spend time on a golf course together. Many of my best friends from across Arkansas, the country and the world have come through the game of golf.
“And a great truth of the work environment is that great friendships can lead to fruitful business relationships over time. So, yes, I think golf is a wonderful way to get personal and professional fulfillment with people you enjoy being around.”
Moreover, Alley said, the game follows an old idiom, attributed to John Wooden: “Sports do not build character; they reveal it.”
“On the course, you will learn more about people and their risk-reward decision making,” he said. “You also can observe how they follow the rules of the game. It reveals a lot about someone’s character and how they may approach real-life situations.”
For a sport that’s been around for 500 years, golf is looking mighty sprite these days. A game that’s survived wilder swings than a 15-handicap duffer in a pot bunker has been on a tear lately, staging a comeback that has to be seen to be believed.
Following April 2020 when rounds were down a quadruple-bogeyesque 42 percent due to COVID-19, the game charged from behind during the rest of the year, per a January 2021 article in The Wall Street Journal. Rounds finished up 14 percent for the year with December rounds alone up 37 percent. Numbers published by the National Golf Foundation showed rounds played in its South Central Region (Texas, Oklahoma, Arkansas, Mississippi, Louisiana and Alabama) were up 33.5 percent and still only middle of the pack among the NGF’s eight regions.
“In 2020, we had more rounds of golf than we’ve had in over 10 years,” said Michael Auerbach, general manager of Pleasant Valley Country Club in Little Rock. “We did implement a lot of protocols for COVID, but it didn’t slow us down at all, and that has carried over into 2021. We’re still showing an increase in rounds played.
“If it carries on like the first quarter, it’s going to be a great year. It’s pretty much holding strong like 2020 as far as rounds played. As the COVID restrictions are being lessened, that’s only helping the game. Our youth programs are totally full. There’s a waiting list for them. Everything looks positive.”
Golf’s popularity, like that of any other activity, has waxed and waned with the times, very often on the backs of popular PGA champions. Arnold Palmer’s “Arnie’s Army” begat the Jack Nicklaus generation and after him, the Tiger Woods tsunami that brought newcomers to the game as never before.
In between these periods of immense popularity have been lulls that have shuttered courses and closed fortunes. In fact, golf was in the rough as recently as 2016, WSJ reported, when a quarter of public golf courses surveyed by the NGF said they were in “poor” or “very poor” financial condition, worse even than in the aftermath of the 2008-2009 financial crisis.
The situation had stabilized by the start of 2020 when only 8 percent of public courses reported similar conditions and the percentage reporting being in “good” or “great” shape had doubled. The set-in of the global pandemic, devastating in March and April, was ultimately an unexpected accelerant to that momentum.
In addition to rounds played, Auerbach said the number of lessons and memberships have been similarly bullish, as PVCC closes in on 1,000 members for the first time since perhaps the 1970s, he said.
“If you look at it this way, you’re outdoors,” Auerbach said. “We put all these protocols in; we had single riders in golf carts, the flag sticks stayed in the greens, we expanded times in between individual tee times to give more of a space. And this has carried over to now. It has not dropped off at all.”
While golf overall was going great guns, golf-as-networking took it on the chin, Auerbach said. Though golf and business have enjoyed a long and profitable partnership, 2020 made it more about the game and less about the deal, especially as the pandemic restricted the “19th hole” of dining and beverage services where many proposed ventures were consummated.
“In 2020, nobody was doing much business of anything. It was more of an escape for our members to get out and be outdoors,” he said. “You didn’t see nearly what it was as far as business going on, guys trying to make deals and whatnot. It was more, ‘This is my only escape from COVID.’ Now, you can look by the tee sheet and see, well, that’s going to be a business group. That’s starting to pick back up.”
“Dues income coming in certainly helped us in 2020 to survive. Golf was by far the most profitable end of the whole entire operation. But now, we’re starting to slowly see the food and beverage end pick back up to where it used to be. I’m very confident that 2021 is going to turn out to be pretty good.”
Business conducted on the golf course may have fallen off, but the business of golf courses surged right along with the game’s popularity. NGF statistics show equipment sales reached a record $1 billion in the third quarter of 2020, with on- and off-course equipment receipts 42 percent higher year-over-year. That was followed by the highest December on record, with final-month sales 58 percent over the previous year, which bodes well for future engagement. Such numbers make it easy to forget that just five years ago, Nike shocked the retail word by exiting the golf business, with Adidas cutting way back the following year.
Also in 2020, several equipment manufacturers and retailers were stock-market darlings, including Acushnet Holdings, known for Titleist and FootJoy, beating the S&P 500 by 14 percentage points. Dick’s Sporting Goods, owner of Gold Galaxy, beat the market by 32 percentage points and Callaway Golf, rebounding from losing three-quarters of its value in the first quarter, beat the market by 13 percentage points by year’s end and announced it was acquiring driving-range operator Topgolf.
Moreover, WSJ reported, the number of first-time U.S. players hit 2.5 million in 2019, exceeding the previous high of 2.4 million in 2000 at the height of Tiger Woods mania. All of which is music to the ears of Chris Cerrato, who with his son recently opened Heights Golf.
“I’m a business guy, and I do play a lot of golf, play in a lot of tournaments and take customers to those tournaments,” Cerrato said. “My son, Casey, and I play all the time, and one day we were sitting there and he goes, ‘Why isn’t there a golf store in the Heights?’
“I said, ‘I don’t know, seems like a no-brainer.’ You think about the per capita income in that area, there’s a lot of golfers, there’s the Country Club of Little Rock, it’s kind of in-between Rebsamen golf course and Pleasant Valley. It’s just a big golf area. Three months later, he and I opened a golf shop.”
Cerrato, who is also president of Evo Business Environments, said the golf store has been at a dead run since it opened in November. While a majority of patrons tend to be men, the store sees a surprising number of families. A lifetime player himself, Cerrato sees golf as more popular than ever.
“One thing we did not anticipate when we started our store was the demand for golf has gone up a lot during the pandemic. Trying to get equipment was our biggest issue,” he said. “We were able to do our renovation pretty quickly for the shop, but it was tough getting product in.
“We were welcomed pretty openly by some of the big golf manufacturers, but a few were hesitant because we were just a store and not a big name. They were so slammed, we had reps bringing us product in their cars from other stores, so that should tell you the demand for golf during this pandemic. Everyone is wanting to do more recreational and outdoor things, so I think golf is here to stay.”
The golf course construction industry is similarly optimistic even though its financials were more modest than that of rounds or equipment. Patrick Schueck is president and CEO of Little Rock-based Lexicon Inc., a subsidiary of which Heritage Links is one of the leading golf-course construction firms in the country. He said the Houston-based holding company enjoyed a full slate of projects last year, and signs point to more to come, both here and abroad.
“Heritage Links is experiencing steady work domestically and is focusing on more international opportunities,” he said. “To date, Heritage Links has constructed or renovated more than 250 golf courses across the U.S., including the soon-to-be headquarters of the PGA America at PGA Frisco, Texas.
“We’re leaving our mark on an industry that’s grown approximately 16 percent in the last year alone. From our home state to PGA Frisco, Liberty National and the Robert Trent Jones-designed Chambers Bay in Washington state, Heritage Links is meeting Lexicon’s long-standing mission to ‘Build America.’”
Schueck said the challenge for the future isn’t necessarily in landing more work, but attracting the required labor to complete the work that’s out there.
“COVID-19 encouraged people to get outdoors and take up safe, enjoyable activities like golf,” he said. “Projects like PGA Frisco and the commitment and initiatives PGA of America have in place will make the sport even more accessible to individuals of varying skill and socioeconomic levels. While we explore these new growth opportunities, we also plan to diversify our projects into other outdoor sports-field areas.
“We are fortunate to have a seasoned, agile team but as more opportunities present themselves to us, we still are challenged to recruit new employees. Once on board, however, we feel confident we can provide the on-the-ground training and mentorship to prepare the next generation of builders.”
Golf Course Industry magazine reported last summer that while 70 percent of its members had projects canceled last year, almost 40 percent said they expected things to return to normal or increase after the brunt of COVID, compared to 9 percent that worried things would not return to pre-pandemic levels. This across-the-board optimism comes from courses large and small, from the most iconic links to small neighborhood munis.
For Cerrato, a native of Sherwood who learned the game on public courses and still favors such tracts, that’s the best news of all both for both pleasure and business.
“My dad started playing when I was probably 10. I’ve never really taken it super-seriously and tried to get really good at it. I’m just one of those average players, some years I’m better than others,” he said. “My dad was a blue-collar pipefitter, so I’m not a member of a country club and never have been. My favorite course is Rebsamen, it’s a great usable course, and we played on War Memorial until they shut it down. We’ve got plenty of good golf courses around here.
“There’s nothing like spending four or five hours with somebody that you kind of know on the golf course because after a few hours, you’re going to get to know them a whole lot better. Typically, smart business people don’t talk about business on the golf course; it’s about the game and enjoying the outdoors and all that. If you share a good time with somebody for that long in a beautiful setting, people are going to remember that later.”
Private golf clubs in Arkansas
• Blessings Golf Club, Fayetteville
• Alotian Golf Club, Roland
• Country Club of Little Rock, Little Rock
• Diamante Country Club, Hot Springs Village
• Hot Springs Country Club, Hot Springs
• Texarkana Country Club, Texarkana
• Mystic Creek Golf Club, El Dorado
• The Ridges at Village Creek, Wynne
• Chenal Country Club, Little Rock
• Pleasant Valley Country Club, Little Rock
• Pinnacle Country Club, Rogers
• Hardscrabble Country Club, Fort Smith
• Granada Golf Club, Hot Springs Village
• Big Creek Golf & Country Club, Mountain Home
• Mountain Ranch Golf Club, Fairfield Bay
• Thunder Bayou Golf Course, Blytheville
• Bella Vista Country Club, Bella Vista
• Magellan Golf Club, Hot Springs Village
• Isabella Golf Club, Hot Springs Village
• Pine Bluff Country Club, Pine Bluff
• Russellville Country Club, Russellville
• Conway Country Club, Conway
• Centennial Valley Golf & Country Club, Conway
• Fayetteville Country Club, Fayetteville
• Springdale Country Club, Springdale
• Shadow Valley Country Club, Rogers
• Paradise Valley Athletic Club, Fayetteville
• Bentonville Golf & Country Club, Bentonville
• Lost Springs Golf & Athletic Club, Rogers
• Prairie Creek Country Club, Rogers
• The Golf Club at Valley View, Farmington
• Stonebridge Meadows Golf Club, Fayetteville
• Searcy Country Club, Searcy
• Country Club of Arkansas, Maumelle
• Maumelle Country Club, Maumelle
• Harbor Oaks Golf Club, Pine Bluff
• Red Apple Inn Country Club, Heber Springs
• Sage Meadows Country Club, Jonesboro
• Tannenbaum Golf Club, Drasco
• Glenwood Country Club, Glenwood
• Greystone Country Club, Cabot
• Southern Oaks Country Club, Jacksonville
• Turtle Pointe Golf Club, Arkadelphia
• The Course at Eagle Mountain, Batesville