Golf Data Holdings (Pty) Ltd: Making the most of lessons learned

9th hole of Masai MaraThe golfing industry is going through considerable change at present, as demographics and lifestyles evolve, along with customer expectations. The essential point is that the industry needs to adapt to its changing markets and learn from experience.

That is precisely the approach taken by Golf Data (Pty) Ltd. (www.golfdata.co.za), as the company, headquartered in Somerset West near Cape Town, heads towards the first anniversary of managing its own golf course for the first time.

When The SA-Mag spoke to Sean Pienaar, part of the senior management team, responsible for business development and legal affairs, a year ago, Golf Data had ridden through the storm of economic downturn which had severely impacted South Africa’s golfing industry and put many of its course design, development and maintenance competitors very nearly out of business.

“Golf Data is a design, build and maintenance business involved in the golf course and landscaping industries. Historically our core business has been solely in golf courses but over the last 10 years we have gradually moved into large scale landscape design, construction and maintenance as well,” he told us.

“We have built many of the country’s leading golf courses, including many that have hosted the prestigious South African Open, and other professional tour events. Golf Data courses have also won numerous awards, including South Africa’s Best New Course Award on an unparalleled six occasions for golf courses at Pecanwood (1998), Pezula (2000), Pearl Valley (2004), Simola (2005), St Francis Links (2007) and Serengeti Golf & Wildlife Estate (2010).

“In addition we have reconstructed a number of courses, with Leopard Creek the most high profile having consistently been ranked as South Africa’s number one course since 2004, after its major re‐construction by Golf Data in 2000.”

Over the past 12 months, Pienaar says that there has been a new wave of developers looking to build golf courses and landscape developments across southern Africa.

“In my view, that has been because there has been so little development here going back as far as 2008 and it is now more demand driven for actual home owners as opposed to speculative buyers,” he comments. “But the demand is coming from a new source and it is not so much the golfers as the increased number of people looking for new homes in urban areas, but with green space landscaping.serengeti8a

“There are more and more estates being built with an emphasis on security and lifestyle and the upper middle to high end estates are looking for something differentiating – and green space is a big calling card and something that we at Golf Data are able to provide,” he continues. This is not necessarily just typical parklands and golf courses but includes amenities like outdoor fitness areas, mountain bike tracks, wetlands and creeks, densely forested areas and formal gardens.

Once again, the need to adapt to the market is something that Golf Data has fully embraced, as Pienaar explains: “I think one of the biggest changes in our company is the shift on how much landscaping emphasis there now is in our business.

“Few people would know this but our Chairman and Co-founder incorporated his first business nearly 30 years ago, as a landscaping business, and so for Robbie it must feel as if the wheel has turned a full circle!”

Exemplifying this point is the enormous Steyn City golf estate project near Johannesburg. The project covers some 700 hectares and will deliver more than 8,500 homes for the ‘City’, which will have retail complexes, schools and a hospital.

“To my knowledge, this is the biggest project of its kind in all of Africa and we are very proud to be involved in the construction and maintenance side,” affirms Pienaar. “Steyn City represents a much bigger project for Golf Data than just a typical golf course estate, as this is genuinely a city that includes a golf course and we are intimately involved in all the landscaping aspects, which is seeing us plant 750 trees a day (including a large percentage of mature trees), building promenades & pathways, bridges, gymnasiums, mountain bike tracks and sports fields to name but a few aspects.

“Our golf course construction experience, stretching back 25 years, has shown us that we have the skill set for landscaping on projects like Steyn City as they become more in demand. It is a very exciting project for us.”

The past 12 months has also seen Golf Data continue in its more traditional line of work, golf course renovations with significant projects currently at Randpark Golf Club & The Country Club Woodmead (both in Johannesburg).

“We are one of the few companies within our niche area to have retained fairly consistent projects over the last few years and our renovation expertise, heritage and experience have been a large factor in this regard. There has been a significant increase over the last half year in interest for this kind of work, but remember that comes from a low base,” says Pienaar.

When we spoke in 2013, Pienaar was excited at the prospect of Golf Data managing its first golf course at the Wedgewood Golf Estate in Port Elizabeth.

“We launched Wedgewood on December 20th last year; in my opinion we launched the course quite early and it was not fully grown in (perhaps around a 5/10 in terms of the standard I would expect of a good public country course). In recognition of that, we launched our pricing at a low base, so that people could experience the golf course and get a feel for our vision of Wedgewood.simola_golf_course_05

“The problem is that a market perception then develops on the valuation and people become resistant to change. As the course has grown and developed (I would consider it to now be at around an 8/10 in terms of conditioning) we will have to adjust the pricing structure and we are meeting resistance, so we will slowly look at increasing the “walk in” rates, whilst offering packages that remain very competitive for our faithful local players.

“As we move towards completion of our first full year managing Wedgewood, we have learned a great many lessons. Golfers nowadays are less inclined to seek traditional golf club memberships and there is a changing perception of the value of membership. The average golfer today doesn’t put a value on membership in the same way that golfers historically did and our model is based around that fact.

“We believe that our model will be attractive to the new type of golfer. The demand for new golf courses these days is driven more by the need for enhanced lifestyle and green space; in effect demand is coming more from home owners that golfers. Stated differently, there are potentially more courses whilst there are potentially fewer golfers, & the golfers that are left are less inclined to be faithful to one club.  In addition, the trend we have noticed is that players don’t want their rounds to take 5 hours, and they simply want to arrive, get great service and value for their money, enjoy their round & leave.

Of course operating a model that does not have the guarantees of membership can be a challenge to forecasting business performance. In essence, if the golfers don’t show up at Wedgewood, there is a big problem. However Pienaar says that demand for golf at Wedgewood has been consistent throughout the year, which is a good sign for a course not yet fully completed.

In many ways, Pienaar sees Wedgewood as the litmus test for what could become an important part of Golf Data’s future:

“Course management is a side to the business that we could turn to in the future but only once we have proven ourselves. So Wedgewood is very important to us. In the meantime we will concentrate the business on design, development and maintenance in both the landscaping and golf arenas.

“I don’t think that the golf industry will change dramatically overnight, but I think more people within it will have to accept and adapt to the changing demographics, with more families, women and a younger generation needing to take up the sport if it is to have a prosperous future.

“All golf course maintenance operations will also have to look at improving their efficiencies as it is a very low margin business.  Furthermore, clubs will need to understand their consumers, and have a clear strategy to attract and retain those consumers, and in my opinion being more attractive to young families and estate residents will have to form a large part of that strategy.

Despite the challenges within the industry at present, Golf Data has continued to evolve and innovate and learn from experience, with Pienaar optimistic for the future:

“I think we are looking at a growth period for Golf Data. We have a number of strong relationships with developers both within and outside of South Africa and lots of renovation opportunities given our niche expertise. Further down the line, golf course management offers a lot of promise; if we can turn a small club like Wedgewood into a financially stable entity within a year, without reaching its potential, then a lot of the larger golf clubs will hopefully look at that and see how our company’s knowledge can benefit them,” he concludes.