A 4-year-old Canadian company that already owns two private Las Vegas-area golf courses has launched an aggressive expansion plan to acquire five or six courses in the Las Vegas area and four or five in the Southern California market in coming years.
More immediately, Pacific Links International, owned by Canadian entrepreneur Du Sha, plans to close on a third Las Vegas-area golf course by the end of 2013, said Harry Turner, a Pacific Links vice president.
“We want to buy clusters of golf courses in strategic markets,” Turner said.
Pacific Links acquired the SouthShore and Southern Highland golf clubs in the Las Vegas area in 2011. The company scouted DragonRidge Country Club in Henderson, and appears to be poised to acquire that private 12-year-old golf course.
Dennis Silvers, a longtime Las Vegas-based golf radio broadcaster who has a golf show on CBS Sports radio 1140 AM, said DragonRidge will be bought by Pacific Links and estimated the price at about $5 million. DragonRidge is south of the Las Vegas Beltway and west of Interstate 515.
“(Du Sha) is looking at this as a good business opportunity to grow his portfolio,” Silvers said.
Indeed, DragonRidge owner Rich MacDonald confirmed that talks are underway.
“There’s no full-blown contract yet, but we’re getting close,” MacDonald told the Review-Journal last week. “It will be a great addition to their portfolio. … It’s a good fit.”
MacDonald said many private golf courses are dumped because of poor cash flow, but he noted that’s not the case with DragonRidge. He also was impressed with Pacific Links’ commitment to maintain and improve the course.
“It was important to find a company that would keep it in the condition that it is now,” MacDonald said. He added he will remain a DragonRidge member even after it’s sold.
“I’ll be watching,” MacDonald joked.
Silvers said Pacific Links is getting some good deals because it’s a buyer’s market for golf courses across the country, noting the sport is declining. He estimated a top-flight golf course in the Las Vegas market could be had for $3 million-$5 million.
“The amount of play has dropped. Merchandise has dropped. Participation has dropped,” Silvers said.
Across the country, the number of rounds played dropped slightly in July 2013 compared to July 2012, according to PGA Performance Trak, which monitors golf industry data.
In Nevada, the numbers were much worse than the national trends as Nevada saw a 6.9 percent decrease in the number of rounds played in July 2013 compared to July 2012, according to PGA Performance Trak.
That was the sixth-highest decrease in the U.S. for that time period.
Turner agreed the golf business has been going through rough times, noting Pacific Links bought SouthShore at Lake Las Vegas from bankruptcy. He noted there has been an over-building of golf facilities in the U.S.
“The golf business as a whole is a tough business right now,” Turner said. “We are certain to acquire courses at much less than their replacement values.”
In April, Pacific Links acquired Dove Canyon Golf Club in Orange County, Calif. Dove Canyon was the 10th property in the company’s growing portfolio, which includes five courses in Hawaii.
Pacific Links members can play at any company-owned courses for a cart fee, and get deep discounts on play at more than 80 world-class clubs around the globe.
Turner said the business model is attractive to golfers, noting that he recently saw 16 members from the SouthShore club playing the Orange County, Calif., course the company acquired this year.
“It’s creating additional value,” he said.
After Pacific Links bought the two Las Vegas golf courses in 2011, SouthShore increased its total membership by 31 percent and Southern Highlands increased membership by 45 percent, Turner said. Three classes of memberships are available at both properties — Full Golf, National Golf (for nonresidents) and Sport/Social.
GolfWeek magazine ranked Southern Highlands and SouthShore in its list of the Top 50 best residential golf communiities. Southern Highlands ranked 36th; SouthShore was 48th.
But Silvers, the radio golf broadcaster, said the business model of selling golf memberships by advertising affiliations with other courses is not necessarily new.
“What Pacific Links is doing is neither new nor novel. They’re using that as an incentive to get people to buy into memberships and for marketing purposes,” Silvers said.
“It’s sounds great in theory, but in practical terms how many people will take advantage of the (reciprocal access)?” Silvers asked.
But Turner disagreed, saying members of Pacific Links-owned courses do play other Pacific Link and affiliated properties.
Turner said to drive more traffic to golf courses, facilities will have to offer amenities for golfers’ spouses and children, such as tennis, fitness centers and paddleboarding.
“We have to be conscious of our customers’ needs,” he said.
Turner said Pacific Links next will scout for private golf courses in metropolitan New York City.
Contact Alan Snel at email@example.com or 702-387-5273. Follow @bicyclemansnel on Twitter.