AIMS report much too harsh on P.E.I. golf industry

Send to a friend

Send this article to a friend.

A golfer walks towards a green at the Clyde River Golf Course. An AIMS research report says government efforts at developing a golf industry have not produced the desired results.

Government makes two investments in 44 years; critics think we’re awash in publicly-owned courses

At one point in the early to mid-1990s on P.E.I., building a golf course was considered a licence to print money. A popular story that regularly made the rounds in those heady days was that a farmer went to the bank looking for a loan to expand his agricultural operation and was turned down. The farmer then asked about possible financing to build a golf course instead and the bank asked, “How much do you want?”

The golf boom was in full bloom and nothing could stop it.

A report released Tuesday by the Atlantic Institute for Market Studies provides a harsh assessment of our provincial government’s involvement over the years in P.E.I.’s golf industry, suggesting it was a poor investment which ended up costing the province millions. The study doesn’t mention the revenue generated by golf nor what our tourism industry would be without our courses. The study is both narrow in scope and often too critical.

Government involvement with P.E.I. golf started back in 1939 when Ottawa built Green Gables in Cavendish to enhance the national park.

Before 1990, there were just seven, 18-hole courses on P.E.I. Besides Green Gables, the province built Brudenell in 1969 to spark tourism in Kings County and Mill River in 1971 to create a tourism attraction in West Prince. Few people could criticize those investments or the returns they have generated since then.

The opening of Crowbush in 1993 put P.E.I. on the international golf map and helped launch our golf boom. The construction of the Confederation Bridge was going to cause a tidal wave of tourism and the surging popularity of the sport resulted in an explosion of courses.

AIMS said the province should have stayed out of the ownership game when the building boom started, but the fact remains that Crowbush put P.E.I. on the world-wide golf destination map and Dundarave was the only other provincial course acquired during this boom period.

P.E.I. has benefitted from golf courses under both Conservative and Liberal governments. The province shouldn’t be faulted for trying to bring tourism opportunities to Kings and West Prince counties. The subsequent construction of Rodd properties at these provincial courses provided quality destinations. And we were left with great courses — both 18 and nine holes.

Our governments made a sound decision at the time to promote golf as a centrepiece of its tourism development strategy. Golf tourism has worked and continues to work. It might not bring the profitable returns some people think is needed to justify the provincial ownership of four courses, but can anyone imagine this province in the summer without our golf courses? The real question is where would tourism numbers be without golf? Golf investments have produced huge economic spinoffs and returns for Island taxpayers.

The province said it would sell its courses if it got fair value for the properties, plus guarantees to protect Island tourism and golf industry. That makes sense. Government’s move into golf course ownership started over 45 years ago. Its involvement with two courses since then seems widely overblown.

Tourism had a rebound year in 2014 on P.E.I. and with the dollar at 80 cents U.S., and gas below $1 per litre, there is reason to suggest U.S. visitors will increase significantly this year. The worst could be over but Island courses have to adhere to Marketing 101 – quality service, quality condition and competitive green fees.

P.E.I. is still considered Canada’s best golf vacation getaway and one of the best-kept secrets on the world golf stage.

Organizations: Atlantic Institute for Market Studies

Geographic location: P.E.I., West Prince, Iceland Ottawa Green Gables Kings Mill River U.S. Canada

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page

Comments

Comments

Recent comments

  • Jim Lee
    February 13, 2015 - 12:28

    Although I'm from BC, I have spent a lot of time in PEI working with the golf industry and the Ministry of Tourism to develop marketing plans. There are several missing bits of information relevant to this discussion that are missing. 1. The provincial courses were never developed or marketed to meet local recreational golfer demand. They were intended to serve as tourism destinations, attracting golfers from off-island. 2. The pricing of these courses was set intentionally high to allow private courses to raise their rates. 3. By almost all standards, PEI courses are competitively priced. 4. The golf industry around the world is suffering due to decreasing demand and too much supply. This is also the case in PEI. 5. The tax revenue from the golf industry is likely much greater than operating losses at the provincial courses. Check that out. 6. While the PEI golf industry will not reach mid 90's levels again, it is still a primary tourism product on the Island. It's a badly needed complement.

  • Jim Lee
    February 13, 2015 - 12:27

    Although I'm from BC, I have spent a lot of time in PEI working with the golf industry and the Ministry of Tourism to develop marketing plans. There are several missing bits of information relevant to this discussion that are missing. 1. The provincial courses were never developed or marketed to meet local recreational golfer demand. They were intended to serve as tourism destinations, attracting golfers from off-island. 2. The pricing of these courses was set intentionally high to allow private courses to raise their rates. 3. By almost all standards, PEI courses are competitively priced. 4. The golf industry around the world is suffering due to decreasing demand and too much supply. This is also the case in PEI. 5. The tax revenue from the golf industry is likely much greater than operating losses at the provincial courses. Check that out. 6. While the PEI golf industry will not reach mid 90's levels again, it is still a primary tourism product on the Island. It's a badly needed complement.

  • Gold Mine
    February 12, 2015 - 07:04

    If this is such a gold mine and a boon to our economy then the government doesn't need to be involved in it at all. Private businesses will see this golden opportunity and jump at it. Oh wait. The article is complete BS. There are TOO many courses and they are TOO expensive. Islanders are tired of this constant garbage justifying spending our tax dollars on luxuries like golf and horse racing while far too many of our population can't afford the basics.

  • Bert
    February 12, 2015 - 06:55

    Any astute businessperson would know that the strategy now being used is not working or we wouldn't be losing 800, 000.dollars It would have been more informative if the editor had included profit or losses for the past ten years.This would provide a history and enable one to make an informed decision on how to proceed. By the way, I hope this is not Wes' s number as ten chanes to one it would be much higher. We as a Province can't continue with these courses and should be sold immediately for the best price we can acquire. How much have we lost over last ten years, if it was like the 800, 000.per year, then this money can be used by Government in lots of other areas.

  • South Shore
    February 11, 2015 - 20:19

    Most major municipalities,every province and the federal government own golf courses as part of their parks and recreation programs and to support economic development including tourism. PEI governments past and present seem to have gone a little overboard with the number of government owned courses but they have also neglected to make these courses part of the recreational opportunities available to most Islanders. I say this because the cost to play these courses is out of the reach of most Islanders and certainly most Island families. Most other government owned courses set their rates to make them affordable options to the average taxpayer. The decision to develop and manage the courses in a way that limits accessibility from the large local market was and is an astoundingly bad business decision .. Worse it means that PEI Taxpayers who cant afford to play the courses and who are covering these multimillion dollar losses are in effect subsidizing affluent golfers to play these courses.. Now why would anybody have a problem with that ?

  • Bob
    February 11, 2015 - 12:02

    Are you blind? Elsewhere in your paper estimates that the loss for this years from the operation of the courses will be $ 800.000.- The fact is that there has been so much 'slush' associated with the government owned golf courses that the taxpayers simply can't keep up. The Binns government gave away millions to his friends in a deal associated with golf , which you apparently prefer to ignore. Then came the state of the art' Crowbush. Inflated prices for land and the building of it , inflated the cost. Operation of the government owned courses serve as job creation and therefore run much higher than is should be. Free passes are also a drain. Crowbush became the course of choice for government officials (Friday afternoon get together of the higher echelons) and their guests and hangers on. If politics had been kept out of it, it may have broken even. Now to sell Crowbush, the government ran out and bought more land at inflated prices. -- Stupid management from day one, - and on going, -

  • Richard
    February 11, 2015 - 11:50

    This is a tired defence of this industry - for starters, you can't be both "on the map" internationally and a best-kept secret on the world golf stage. PEI's not a secret anymore in the golf community (given the millions in addition to courses that has been spent on ads on the Golf Channel and in magazines), however the reason courses are seeing declines year over year is because the golf industry has a new "darling" every few years. We're not the fad anymore. Tourism is a fickle industry - did anyone think, 10 years ago, that Portland Oregon would be a hotspot? And yet - people are flocking there. 10 years from now, they won't be. We need to wake up and realize that the Island making heavy investments in tourism is one of the reasons the economy is so lousy - it creates predominantly low-wage, seasonal jobs, and with EI rules changing the economics are getting worse. It's time to invest in things that don't generate a little money for four months a year.