Page 12 - GBC Fall 2022 Eng

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Golf Business Canada
PAIN AT THE PUMPS CONTINUES
Sage veterans of the golf industry that have seen and been through a lot over the years are even finding the current environment challenging to negotiate. While some owners/operators admit the past two seasons and current operating year have provided the industry with some much needed buffer, it’s impossible to figure out with any degree of certainty how to structure a business plan for 2023.
Debra Griffith can attest. Owner and chief executive officer at 36- hole Greensmere Golf and Country Club near Kanata, Ontario she has gone through two economic downturns – including the global crash of 2009 – and now a pandemic in her capacity, but has no real frame of reference for the current state of inflation.
“I’ve been here for 21 years and have seen an awful lot. Who would have thought we’d be in this predicament? Who thought we’d be where we are right now? I’m an optimist by nature but you still have to be a realist and have a plan for the worst. Well, this is pretty bad,” Griffith says.
Like it’s been at many facilities across the country, surging fuel costs have turned into public enemy number one. Price at the pumps is the most obvious culprit for the single largest rise in inflation in more than 40 years. Russia’s invasion of Ukraine and a surging demand for fuel by consumers after government imposed COVID-19 restrictions were lifted are compounding the price for crude oil which has gone from $43 in 2020 to $113 this year. Customers in Canada are now paying 48 percent more for gas than they did a year ago.
Owners/operators did heed the warnings of higher fuel costs. Many built in additional buffers to offset the apparent rise sure to come but no one could have anticipated how high the price would reach. Operations that held the line from a year ago have been forced into creative crisis management.
“Everyone is going to have a line item for gas and oil and it’s mostly going to be way over,” says Harry Brotchie, President of Winnipeg, Manitoba multi-course operator, Lakeland Golf Management. “You certainly weren’t forecasting a $2.10 - $2.15 a litre price coming. I know we took a long look at the inflation factor in the gas prices, commodities and everything in general but you’re looking at budgets back in November/December. Hopefully most golf courses across Canada
“Like it’s been at many facilities across the country, surging fuel costs have turned into public enemy number one.”
increased their fees and adjusted costs. Food people say you have to look at your menu three times a year or more just because the price of products changes so dramatically. That’s certainly tied to gas and oil and general.”
Coming off two of your best years ever should be cause for a celebration. Instead Lakeland Golf Management which operates 11 Western Canada courses had to do its due diligence and made some tough decisions on increasing fees.
“Once we got through the COVID protocols Manitoba and Saskatchewan was pretty fortunate to open back up reasonably early,” Brotchie explained. “Two years ago in May it was a pretty scary thing not knowing if you were even going to open because you’re still cutting fairways and greens and paying maintenance people no matter what.....protecting the assets so to speak. That was tough on the nerves. At the same time, I look at that and what’s happening now with inflation and say to myself, yeah, we’re going through this but so is our customer.”
Brian Schaal, General Manager at Invermere, British Columbia’s Copper Point Golf Club doesn’t dispute that gas prices are having a profound impact on consumers and business across the country. At