Diane Starr says business has never been this bad in 35 years of helping golf fans find accommodations at the Masters Tournament.
“Everybody assumes that the Masters weathers it all, but not in a crisis like this,” said Starr, president of Corporate Quarters Inc., which leases homes to companies and individuals during the event. “There are a lot of houses on the market.”
With golf’s premier tournament scheduled to begin April 9 in Augusta, Georgia, house rental prices are down as much as 50 percent, according to Starr. Four-day tickets are selling for 15 percent less than last year on EBay Inc.’s Stubhub, the largest online ticket broker.
The Masters, the first of golf’s four annual major tournaments, was first played in 1934 and now draws executives and golf fans from around the world. While Starr said the Masters represents the “best of the best” in sports entertainment, the recession is driving down prices.
The U.S. economy shrank at a 6.2 percent annual rate in the fourth quarter, the most since 1982, revised government figures showed last week.
Corporate Spending
Week-long rentals of private homes have dropped to $7,000 from $9,000 for a typical four-bedroom, three-bath property, and to $15,000 from $30,000 for five-bedroom estate homes used for private parties, said Starr, who spent 15 years working for the Augusta Chamber of Commerce’s Masters Housing rental unit before starting her own company two decades ago.
“I’ve been doing this longer than anybody in this town and this is as bad as I’ve seen it,” Starr said during an interview in her office four miles from the club. “We had 9/11 and then Martha Burk. This has hurt us worse than either one of those.”
In 2003, Burk led a protest near the front gate of Augusta National over the private club’s all-male membership. Burk, the former leader of the National Council of Women’s Organizations, said she would also stage protests at the headquarters of companies sponsoring or attending the tournament. Many of them stayed away.
The economy isn’t the only difficulty golf has faced in recent weeks. The sport has been a target as corporate spending comes under scrutiny.
Northern Trust Corp., criticized by members of Congress for entertaining employees and clients at a company-sponsored U.S. PGA Tour event, said last week that it will repay $1.6 billion in federal bailout funds “as quickly as prudently possible.” Wells Fargo & Co., which sponsors a Charlotte, North Carolina-based tournament, and Morgan Stanley, a sponsor of the Memorial Tournament in Ohio, recently said they won’t entertain executives or clients at the events.
‘Very Different’
“This is very different than any other year,” said Steve Parry, owner of the 1018 Club, a corporate hospitality house less than 500 yards (457 meters) from the main entrance of Augusta National Golf Club. “The companies that would have brought 50 people are down to maybe 20. And those who sent 20 are down to zero.”
Parry usually entertains about 1,200-1,600 people during tournament week at the club, which has two bars, 12 large-screen televisions and an 8,000-square foot outdoor deck. This year, he said he doesn’t know how many he will host.
“There are still companies that are on the fence,” Parry said.
Ticket Prices
Tickets for this year’s tournament, which have a face value of $200 for all four competition rounds, have sold for an average of $3,377 on EBay’s Stubhub, down from $3,930 in 2008.
Sean Pate, a spokesman for Stubhub, said he expects prices to keep falling as the tournament approaches.
The company has sold “hundreds” of one-day passes for an average price of $400, Pate said. Tickets for Monday and Tuesday practice rounds have a face value of $36. Wednesday tickets cost $41. Stubhub has sold just four of the approximately 100 four-day “competition round” passes it has listed.
“People are still going to the events; they just can’t afford to spend as much,” Pate said in a telephone interview. “A four-day pass is a big expenditure.”
Inside the one-story brick building that houses Starr’s business, autographed pictures of Masters champions Tiger Woods, Vijay Singh and Gary Player share wall space with a handwritten letter from Barbara Nicklaus. The wife of six-time Masters champion Jack Nicklaus thanked Starr for her “delicious” pound cake and “comfortable” home in 1996. Starr’s company also finds rental homes for many of the tournament’s competitors.
Event Sponsors
Starr declined to name many of her “big clients” who have decided not to attend. Among those renting homes this year are International Business Machines Corp., Daimler AG’s Mercedes- Benz, Exxon Mobil Corp. and AT&T; Inc. All four companies are official tournament sponsors.
Starr rented about 400 of the 1,000 homes she listed in 2008, approaching her record number of rentals in 2000. This year, she has rented fewer than 300. As the tournament approaches, Starr has been fielding calls from desperate homeowners.
“They tell me, ‘my kids can’t go to Disney World if you don’t rent my house,’” she said. “At first it was just extra gravy, now they count on that money.”
(Source: Bloomberg)
