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November 2016

On His Terms

onhisterms.jpg‭By Trent Bouts

The elder statesman of Myrtle Beach Golf is thriving in a cutthroat market

There are times when Claude Pardue’s daughter drives away that he can’t help but chuckle. She has a rear bumper sticker he says could serve as a diagnosis of much that ails the golf industry. It reads, simply: “Don’t believe everything you think.”

“That’s great,” he laughs. “There’s been a lot of that as long as I’ve been alive. People get enamored with their own thought process …too many people don’t look in the mirror and evaluate themselves very well.”

Pardue, 63, has owned golf courses half his life. He’s not only survived, he’s thrived, and he’s done so mostly in Myrtle Beach, South Carolina—one of the most competitive, and at times cutthroat, markets in the country.

A decade ago, the city was the midpoint of a 60-mile stretch of North Atlantic coastline boasting more than 120 courses. That number has shrunk to 90-some since the Great Recession, and Chinese interests—through Founders Group International—now own nearly a quarter of them. Many of Pardue’s contemporaries from the 1990s are no longer in the business.

Against that trend, his own trio of public courses—The Witch, The Wizard and Man-O-War operating under the banner of Mystical Golf—continue to run in excess of 40,000 rounds every year.

“We have an operating profit,” Pardue says. “But the marketplace doesn’t. It’s tough to make a profit today.”

That’s not the only trend Pardue bucks. He doesn’t use a point-of-sale system. He eschews middle management positions (“You get too many suits in a business and you spend a lot of money.”) and runs 20-year-old bentgrass greens on two of his courses long after the stampede to ultradwarf bermudagrass. He only converted The Witch to bermudagrass because he was “stupid enough” to build greens to USGA specifications. “Absolutely the biggest mistake I’ve made in 32 years in golf,” he says.

What’s more, Pardue declares golf to be “a very unprofessional industry” awash with “absolutely” too much ego and riddled with “a thousand fallacies.” He frowns upon some of the game’s iconic names—yes, Nicklaus, Palmer, Dye and “whoever else you might pick”—for building golf courses too tough for most people to play.

“If the customer doesn’t like the course, it won’t do well,” he says, returning to those operators who ignore the mirror. “They don’t say, ‘My course ain’t great because I own it. It’s great because my customer pays to play it.’ The fact is if I’m not getting customers, it may not be as great as I think it is.”

That’s why there are some architects Pardue would never use. “Listen, if you were going to build a house for you and your family, would you go to an architect and say, ‘You just build what you like, no matter what it costs, and I’ll move in and I’ll live there.’ If people don’t like to play the course for the amount of money you have to charge to maintain it, then that business model is not going to work.”

Accordingly, Pardue rates Pinehurst, North Carolina-based Dan Maples, who designed all three Mystical Golf layouts, as “one of the greatest architects” in the world today. “Dan understood that his job was to build what I needed him to build with my marketing, my ideas and with what look I wanted to market and the plan we wanted to market with.”’

After growing up in Burlington, North Carolina, where he learned to water ski before he learned to swing a club, Pardue dabbled with becoming a veterinarian but only for a single semester. One microbiology professor made life so unpleasant he switched to economics and accounting before eventually joining his father’s insurance and financial planning agency.

It was there over an eight-year span that Pardue developed a passion for the workings of business. He learned a lot observing from the safety of the low-risk side of the desk. “My clients were in all types of businesses, from manufacturing to farming, car sales to retail, to whatever it was,” he recounts. “I got to see from my customers’ eyes how they did business. That was fun for me. I love studying business. I love studying why and where people spend their money.”

By the time his father neared retirement, Pardue was ready for his career path to make a detour. He teamed up with a friend, Richard Lee—then the head professional at Alamance Country Club in Burlington—and late in 1984 they bought what was then Hyland Hills Golf Club in Southern Pines, in the heart of North Carolina’s famed Sandhills golfing region.

“A big mistake people make when they buy a golf course is to buy one that nobody is playing at the time and to think they can talk people into playing it,” Pardue says. “Too many people in the golf industry think that. But if it’s a place that people aren’t coming to already, you aren’t going to get them there. The public votes on whether they like your product or not. Because you like it is irrelevant. Hyland Hills wasn’t real successful but it was getting a lot of play.”

Pardue and Lee essentially ran the course themselves, splitting shifts and doing everything because they had nobody else. “It was very much a learning experience,” Pardue recalls. “It was everything from emptying trash cans to pulling out carts, talking to customers, finding out why customers were making the decisions they were. We watched customers, we watched the industry. It was huge for me.”

Five years later, he opened The Witch, and The Wizard and Man-O-War followed in 1996. At that time, Pardue was still making the 120-mile trek between his new courses and his first. A year later that got old enough for him to relocate his family to Myrtle Beach. He sold Hyland Hills in 1999, but he never tired of watching and learning from his customers. He does it to this day.

“It’s more listening than interacting,” Pardue says. “I might say ‘Hey,’ but I let my employees interact. I stand around and I listen to my customers’ conversations and I watch what they spend their money on.”

The rock solid certainty Pardue takes from decades of anecdotal observation is that golfers want value. “Nobody is going to tell you they’re cheap,” he says. “But everybody is. Everybody wants a value. Not necessarily related into the cheapest price. They don’t want to spend $50 for something they perceive after they bought it as being worth only $40. But they’ll spend $100 for something they perceive to be worth $120.”

Confident in that belief, Pardue never entertained the idea of a big-name architect for any of his courses. “If you really care about the golf business, you build something that a lot of people want to play, whatever that is,” he says. “That’s the goal. It’s not to build a monument to yourself. If I could make more money owning the worst golf course you ever played, I would own the worst golf course you ever played. It isn’t about ego of the golf course that matters to me.”

Unlike some markets, there are relatively few courses in Myrtle Beach that were built to sell homes and fewer still owned and operated by what Pardue refers to as “hobbyists,” those who “made millions in some other business” and “buy a golf course for their ego.”

“My industry may be a very unprofessional industry, but my marketplace, Myrtle Beach, is an extremely professional market place,” Pardue says. “People are in Myrtle Beach to be in the golf business. That’s one of the reasons Myrtle Beach stands apart from other marketplaces.”

The abundance of competition in the area has helped Pardue identify his niche. “The way I do it is not just because of this market but the way we fit within this market,” he says. “There are people in this profession that do it differently than me. There’s not just one way to skin a cat, as the expression goes. I love that I’m in a marketplace with some very smart people who I can debate issues with and also watch them and learn from them.”

That niche does not include gilded temples for clubhouses offering lobster salad at the turn. Pardue is fond of an old business adage that it’s better to serve the paupers and eat with the kings. “I can serve you a hot dog, but I want it to be a nice, all-meat hot dog,” he says. “I don’t want to serve you convenience store hot dogs. And yes, I want your beer to be cold. When it’s hot, we go around all of our golf courses with an iced towel that we give to you. Those are the things that matter—in addition to my greens being perfect!”

A key element of Pardue’s model was to create three courses with distinctly different personalities. The Witch is perched on a network of higher ground within a 500-acre swamp. The Wizard draws on Scottish inspiration with numerous berms and stacked sod bunkering. Man-O-War is built on and around a 100-acre lake that features rare back-to-back island greens.

“People love my golf courses. My golf courses are beautiful,” Pardue says. “They’re unique. They’re fun. I wanted three golf courses that were totally different from one another. So if you play all three, it’s important to me that you think you have three totally unique experiences.” That variety under one umbrella makes his memberships “extremely advantageous,” Pardue says.

It also makes Mystical Golf’s stay-and-play packages more appealing. Pardue has leased three-bedroom condos adjacent to The Wizard for the past five years and enjoyed great success. “You don’t need to play anywhere else because you’re playing three distinctly different golf courses,” he says.

Visiting play accounts for about 70 percent of Mystical Golf’s play and about 85 percent of revenue. Still, Pardue works just as diligently to maintain his local play. “That might only be 15 percent of revenue, but it’s incredibly important because that 15 percent is your margin,” he says. Many of those local customers recognize Pardue. “I’m visible all the time at my properties, for my customers and my employees,” he says. “That’s one of the things I do.”

Indeed, the personal touch still matters. “I don’t have any point-of-sales systems at all. Not a one,” Pardue says. “We do keep data, but we keep data through the computers in the tee-time network, not through point-of-sale systems. I don’t believe in collecting and being intrusive to my customer when he’s checking in. I believe in saying thank you.”

Another thing Pardue doesn’t believe in are “levels of operations.” There’s nobody between Pardue and his department heads. “I don’t have a business manager between us,” he says. “I want an open-door policy where my agronomists or food-and-beverage manager can come directly to me. I don’t believe in layers. Things can get lost in layers, and you also can waste a lot of money in layers. It requires me to be here seven days most weeks, but I love to be here, so it doesn’t matter.”

Trent Bouts is a South Carolina-based freelance writer and editor of Palmetto Golfer magazine.

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