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November 2019

More Not Necessarily Merrier

Regent Golf Values Relationships Over Growth

By Steve Eubanks

The most luring intoxicant in management is scalability. The infrastructure needed to run two clubs – administration, marketing, insurance – is not twice as expensive as what’s needed to manage one. But your fee income from doing a second management deal doubles. Add a third and fourth property and the gap between fees and fixed expenses widens even further. By the 10th or 11th, you’ve got national purchasing power and a name in the marketplace. Bump that number up close to triple digits and you’re one of the top 10 executives in the industry – someone who gets wined and dined at conferences and has no trouble being invited to all the right events. 

But every high has its crash, every party its hangover. And while you might gain all the trappings of being an industry giant when you grow to a certain scale, you lose the thing your clients and partners need and value most. You lose your relationships. 

That’s why a relatively new partnership called Regent Golf in Georgia is taking the opposite approach in its growth strategy. 

“Our business is not transactional, it’s relational,” said Tim Dunlap, who, along with Steve Paris, formed Regent Golf as a boutique firm with a specific niche.

According to Paris, “We are going to be very selective about the kinds of clients we do and do not do business with. For example we shouldn’t be butting heads with companies like Troon on properties that are next to Starwood Hotels. That’s not who we are. We’re not going to do that. Our ideal property is owned by a family or an individual. Maybe it’s not their primary interest or means of income; maybe the kids are involved in it now and they’re trying to keep the legacy alive; maybe they’retrying to protect their assets and their property. We can relate to that owner. And we can create more than a business relationship between them. We’re very good at that. But our goal has never been to have 50 clubs.” 

It’s easy for someone who has never managed 50 clubs to say that he has no aspirations of getting there. But Paris and Dunlap came from the go-go-growth world of golf. They have seen the upside and lived the downside firsthand.

When Paris left American Golf, he was chief operating officer, overseeing 135 properties in 21 states. Dunlap also is an American Golf and ClubCorp alum. He also was the chief operating officer of Sequoia Golf, which owned and managed 55 golf properties around the country. They have seen large-scale, transactional golf management. And they don’t want to be part of that again.

“We really like the 14-club rule,” Dunlap said, referencing the Rule of Golf as analogous to Regent’s rules governing effective golf management.

“Look, growth is a heck of a drug,” Dunlap said. “But with a small number of clubs and a select group of club owners, our time and attention can be devoted to developing and maintaining those relationships. Three-year management agreements where you’re in and out, that’s not relational. That’s strictly a transaction. …The brand we’re building isn’t our brand; it’s the brands of the clubs we manage; the brands of the owners whose legacies we’re invested in protecting. That’s what we care about.

“Other management companies are using cookie cutters. They bring in the same systems one club after another, whether or not the next club needs that same cookie. That’s a growth strategy but not a long-term operational strategy. That’s not a strategy that’s good for the owners; not a strategy that’s good for the relationship they have with their members and not a good strategy for us as a management company.” 

Paris and Dunlap have identified 4,200 active private clubs in America. Of those, 800 are owned by individuals or families. They want to cultivate relationships with slightly less than two percent of those. And they want those relationships to be personal.

When they were with the larger companies, both flew in private jets. Dunlap now pulls an Airstream camper behind an SUV and stays by the maintenance sheds of the clubs they manage. 
“Look, in essence, this is new brand – 99 people out of 100 are going to say, ‘Never heard of you guys,” Paris said. “But we know what we’re doing. The first thing we talk to owners about is the ‘current member experience.’ What’s that like?

“So, when we first come into an operation, even if they haven’t hired us, we always recommend two things: The first is a member survey and the second is a complete operational audit where we go through every single department and see how the sausage is made. We look at the last three years of their financials, their rounds, their member growth; check under the hood of everything they have going on. 

“Then we write a report that merges the two together. We tell them: ‘Here’s what we found, here’s what we think you can do better, and here’s how we think you can solve your problems.’ But in some cases we have to say: ‘Your club is in the wrong place, there’s no growth, and you might continue to bleed money for a long time.’ Those instances are very rare, but they do happen.

“What we’ve found is that when you give the owners your comprehensive report, a lot of times they say, ‘Gee that sounds great. We don’t have any idea how to do this.’ And that’s when you say, ‘We do.’ Management flows naturally from that.” 

Regent has two courses under management – one club in California (owned by a woman who inherited the property from her father) that was on the verge of closing but is now thriving – and the second in North Carolina where Regent has taken over from one of the largest management companies in the industry. Two more are expected to be online by the end of the year.

But Paris and Dunlap are in no rush. Lasting relationships take time.

Steve Eubanks is an Atlanta-based freelance writer and New York Times bestselling author.

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