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Golf company drives counter-intuitive business model

Integrity Golf's first acquisition was Celebration Golf Club.
Integrity Golf's first acquisition was Celebration Golf Club.

As golf courses across the country close because interest in the time-consuming, often expensive sport is waning or because the land has become more valuable for other uses, Orlando-based Integrity Golf Company is buying them up or offering to manage them.

What seems like a counter-intuitive business model is working for the private company, says its CEO and President Gene Garrote. He says Integrity has found opportunity and profit in running left when everybody else is headed right.

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Since 2007 Garrote and his business partner, William Jack Davis II, gathered 33 courses across the Southeast into its portfolio. It owns about half and leases the others as manager. Garrote says the end game isn't to sell off the courses for other uses, but to find ways to make them turn a profit as golf courses again. And he says it's working.

In Central Florida,  Integrity has Celebration Golf Club, Orange County National, Tuscawilla Country Club, Metro West Golf Club and others under its banner.

"We run it like a business," said Garrote. "We make sure we are putting out quality products, quality services. We are in it for the long run."

Garrote says the company's strategy is two-fold: bring in more golfers and manage expenses tightly while taking advantage of economies of scale by buying goods and services in bulk.

The secret to bringing in golfers involves identifying what is keeping them off the courses, said Garrote.

"We identify need in the market and ask ourselves, 'What are obstacles to keeping people from playing more golf?"

Time, cost and neglecting the rest of the family are three barriers. Some solutions to the time issue is allowing golfers to play only nine, rather than requiring they take on all 18 holes, and by providing golf carts, sometimes for free or at discounted rates to make the game go faster, he said.

"Maybe you are new to the area and don't have clubs, or you are visiting and don't have clubs, we can rent them or maybe offer the use for free." Garrote said.

To overcome family issues, Integrity promotes family play and other amenities beyond the golf courses, such as swimming and tennis as well as dining opportunities at the clubhouses. Family play is made less expensive by letting children for free at some clubs.

"We want it to be a family event," he said.

Bargains and coupons are offered and the company takes to social media outlets to reach out to people who might not be in the usual target audience for golf. Taking advantage of Internet marketing hasn't been a big part of most golf club marketing plans, Garrote said.

"We definitely have to be competitive," said Garrote. "Getting creative on how to package and present our products. The old days of building it and they will come doesn't apply these days."

Golf course owners frequently reach out to Integrity to offer their courses for sale or lease, Garrote said. Integrity goes through a process to determine if the course is a viable investment.

The company is not constricting itself to the Orlando area or even just the Southeast.

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"We ask ourselves, 'Can we bring value to the table?'" Garrote said. "There are a lot more deals that we walk away from than we take."

tburney@growthspotter.com or 407-420 6261

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