Tuesday, January 14, 2014

Doonbeg Doom and Gloom... or is it?

Killeen Castle 1st tee
Doonbeg has gone into receivership. It's a shock to the system for golf in Ireland and it continues the high profile casualty list of recent years... one that includes Killeen Castle, Lough Erne and Fota Island*. Fota Island has bounced back dramatically, having been sold by NAMA to the Chinese Kang family in 2013, but various companies involved with Doonbeg, Killeen Castle and Lough Erne are in either receivership or administration...

... But the fateful words 'receivership' and 'administration' are not death knells. Far from it.



Killeen Castle

The Jack Nicklaus-designed Killeen Castle golf course continues to operate very effectively in Co. Meath. Things started going wrong in the run up to the 2011 Solheim Cup. Property, as so often is the case, was the culprit. First, the castle was to be converted into a hotel but this fell through when the hotel operator Starwood pulled out. Then there were the residential properties. The plan was to build houses, a strategy adopted by many new courses (In Ireland and elsewhere) and seen as crucial to the successful financing of resorts.

The dogleg 17th at Killeen Castle
But of the 160 houses planned for Killeen Castle, only a handful were built and sales were poor. The properties subsequently fell under the NAMA umbrella and both the golf course and Dave Pelz Scoring Game School have been tarnished as a result... which is a shame given the scale and drama of the course. Property sales appear to have been much more successful under NAMA, but the price and financing structure have undoubtedly played a big role in that.

The course should be on every golfer's radar, with green fees rates between €40 and €110. Annual Membership is €2,000. For monthly open events, click here.


Lough Erne Hotel & Golf Resort

Lough Erne hosted the G8 Summit last year, despite being put into administration in May 2011. It cost Stg £35 million to build but at the time of the G8 it was for sale at £10 million. There has been considerable interest in the resort but it remains in administration... for now.
Dad tees off on 17, back towards the hotel
The resort continues to operate succesfully, garner awards and maintain its Nick Faldo-designed course to the highest standards. The Thai Spa, the Catalina Restaurant (Neven Maguire), the hotel and the golf course have collected a multitude of national and international awards in recent years. As such it remains one of Ireland's top luxury golf resorts and very much an aspirational destination. Green fees range from £40 to £95, with a number of open events during the year costing just £40.

To view the resort's special offers, click here.


The Lodge at Doonbeg 

The latest casualty to the high profile list arrived yesterday. It has taken Irish golf by surprise, but that may be due to the resort's American ownership. Even so, The Lodge at Doonbeg is the most glamorous resort we have and, as for Lough Erne, the list of awards is long. Travel magazines and websites continually rank Doonbeg among the best resorts in the world. That, in fact, may be its strongest selling point as it will prove most attractive to potential buyers. The downside is that those buyers are unlikely to be Irish. The Americans and Chinese will lead the race for Doonbeg and its superb Greg Norman-designed links golf course.

The brilliant and tough par four 6th
Business will carry on as normal, which is great news for the resort's employees and local economy. An early sale is also anticipated. Maybe Donald Trump will be interested. Luke Charleton and David Hughes of EY Ireland have been appointed as receivers and have stressed that everything continues as usual and that the members of the golf course will have the same status as before.

Approach to the par five 13th
Regrettably, early indications suggest that the receivers were called in as a result of unsold properties on the resort's grounds... once again proving the dangers of using residential property to provide the financial crutch for golf resorts.

 Green Fees range from €60 to €175.
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 * In what has to be seen as a timely coincidence, the announcement of Doonbeg's receivership was balanced by Fota Island being announced as this year's host to the Irish Open.  







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5 comments:

  1. AnonymousJanuary 15, 2014 at 12:36 AM

    Seriously not suprised here, how can any club golfer afford to pay the price for Doonbeg...........

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    1. Kevin MarkhamJanuary 15, 2014 at 9:05 AM

      That's the thing, though, Doonbeg was never created for many club golfers, or even societies. It is a premium destination. As someone pointed out to me the other day - if a club charges €150 a round and gets 10 green fees a day, that's €1,500. Charge €15 and you need 100 green fees in a single day. Different clubs work to different structures.

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    2. Connor ShieldsJanuary 15, 2014 at 7:03 PM

      Agree there Kevin but as a golfer who lives close to the club it really needs green fees to stay alive as a golf course, How many can actually afford the prices, if they pulled the price in for let's say GUI members wouldn't it get more traffic and MAYBE more staying, I see what your saying about the exclusive nature of these cources but GUI members could help to keep them open with all week GUI rates...Just a thought...

      Connor Shields

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    3. Kevin MarkhamJanuary 16, 2014 at 9:55 AM

      Absolutely, I agree with you completely Connor. But their business model was/is shaped around exclusivity and it doesn't appear that they've done huge amounts of Irish-focused marketing since the recession began. Although I hear that they're now doing a bit more active promotion in Ireland.

      Courses nearby - Ballybunion, Tralee, Lahinch - all charge similar green fees (Lahinch being the lowest) so it would be interesting to see how the other clubs would respond if Doonbeg lowered their prices by, say, 20%.

      There are two ways of looking at it: they lower their prices and make it more accessible for Irish golfers, but risk losing the exclusivity that makes it attractive to the high-flying elite golfers; or they continue to weather the storm, keep prices at their current levels (€210 in the boom) and maintain that exclusive air. Given that what's just happened seems to be mostly property sales related, the issue isn't hotel or golf bookings. A new buyer may change nothing.

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  2. howtobreak80January 15, 2014 at 9:26 AM

    Shame that course has gone into receivership but the fees being that high Im not surprised. I have course in New Zealand that are under the same situation and are looking into closing soon.

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