World Congress: Setting the scene Beyond the bundle World Congress: Champions and VIPs Comments show misgivings on gambling World Congress: Panelists speak Youth lacrosse tourney inspired by LLWS Miami Formula E exec plans for 2016 Sports Business Awards nominees Fox takes over Vegas hoops tourneys Formula E expects sellout at U.S. debut
Upcoming Conferences and Events
SBJ/June 10-16, 2013/Events and Attractions
Cozy Merion creates hospitality squeeze
Published June 10, 2013, Page 3
WANT MORE GREAT STORIES LIKE THIS?
CLICK ON ONE OF THESE BUTTONS
What it doesn’t have is a lot of space. Last year’s U.S. Open at Olympic Club was played on a nearly 300-acre footprint, compared with the 110 acres at Merion, which will host the Open this week.
|Only a few hospitality units will be on the course itself at the Merion Golf Club.
“You just can’t do everything you want to do on the golf course property,” Hirshland said. “This Open requires tremendous creativity and a lot of cooperation from the community.”
Hirshland cited the cooperation of the Haverford Township, Pa., community because many of the Open’s hospitality clients will be partying in the front yards of homeowners across the street from the course.
The USGA struck rental agreements with about 10 homeowners on Golf House Road to build hospitality structures in their front yards. Those big white tents will line the street that leads to Merion’s entrance.
A 40-by-30 foot tent with 100 tickets per day and 40 parking passes in one of those front yards costs $275,000 for the week. Food and beverage and decorating typically can double the cost for clients.
Buying space from homeowners was one solution the USGA came up with to accommodate the space required to put up 32 hospitality tents. Only the USGA’s five corporate partners — American Express, Chevron, IBM, Lexus and Rolex — plus the broadcast partners, NBC and ESPN, will enjoy hospitality on the golf course itself. Those units will be on the sixth and 13th holes, leaving the finishing holes clean except for the grandstands.
To create even more space for hospitality, the USGA reached an agreement with Haverford College, whose campus will be the site for the 1895 Club, Trophy Club and Champions Pavilion. The golf club and college are separated by a commuter rail line, so the USGA had an overpass built for spectators going back and forth from the tournament. It’s roughly 400 yards from the hospitality options at Haverford to the 18th hole.
“It’s groundbreaking in a way,” said Bill Colvin, a former IMG executive who arranges hospitality for clients at major golf events. “You’re just not used to seeing a major championship in such a setting. Any golf course architect these days looks for 200 acres or more to build a course.”
The hospitality tents, marketed and set up by MSG Promotions, the USGA’s longtime hospitality agency, were sold out months ago. Only a handful of daily passes to the 1895 Club and the Trophy Club were available in the weeks leading up to the Open for $75 to $250.
“You simply take what the golf course gives you,” Hirshland said. “For our highest-level partners, the corporate partners, you work to figure out how to take care of their needs first. The broadcast partners, you take care of. Then we look at what other space options we have and that’s where we had to come up with some new ideas and extend beyond the gates.”
Hospitality at its peak generated close to $20 million in annual revenue for the USGA at the 2008 Open. Most venues can’t generate that much revenue because the 2008 site at Torrey Pines had a hotel and conference center on-site, in addition to a spacious footprint on the golf course. Its high-end offerings also sold for much more, with the top prices at $575,000 for a lodge at the 18th hole.
Despite Merion’s limited options, this Open will do well financially in the hospitality category. In typical years, hospitality revenue has ranged from $10 million to $15 million, and the USGA has not lowered expectations for Merion.
Overall, however, this Open will produce less revenue than years past because only about 25,000 paid fans will be on the course per day. Olympic held 37,000, and next year’s site, Pinehurst, will hold close to 45,000 per day.
“When you go line by line on revenue, a number of the lines will be comparable to other Opens,” Hirshland said. “Other lines, like the gate, will not.”
|The compact course design and proximity of homes add up to a tough task for tournament operations at Merion Golf Club.
Those partners will be on the golf course. For non-partners, tents at Haverford or Golf House Road range from $115,000 to $275,000.
Weekly passes to the all-inclusive 1895 Club on the Haverford campus run $1,875 and cover food and beverages in an air-conditioned unit. A Trophy Club weekly pass goes for $685 and does not include food and beverage.
A piece of hospitality revenue is normally shared with the host club.
Despite the challenges associated with Merion, which first held a USGA championship in 1904, there will always be a place for historic golf courses in the Open rotation, even if it means the gate proceeds might take a dip.
“As a healthy nonprofit organization, and a disciplined organization, we don’t get off track from what’s most important and that’s the integrity of the competition,” Hirshland said. “The first thing we take into account is whether the course will provide the test of golf we’re looking for. Second, we have to make sure we have the space and logistical capacity for traffic and parking. The rest of it is figuring out the cost and revenue. As long as we can check off the first two boxes, we’ll figure out the rest.”