Will Golf in Cabo Price Itself Out of Customers?

By: Jeff Shelley

It seems that every annual visit to Cabo finds higher green fees at all the courses – from the relatively lowly nine-hole municipal course in San Jose del Cabo to Baja’s priciest track, Cabo del Sol. The latter venue will be hiking its rates to $300 (including the local 10% sales tax) in October 2001. Sure, Cabo del Sol offers post-round all-you-can-eat fish and shrimp tacos. But when will Cabo golf’s price bar be raised so high that golfers refuse to pay to play?

All of the golf professionals I recently talked to in Cabo expressed concern over the escalating prices. Luis Ituarte, director of golf operations for both Cabo Real and Eldorado, hopes that the upcoming courses (at least four more are planned) will help lower the prices. “More golf courses are good,” said Ituarte. “But I’m concerned that our golf pricing may be like (what happened in) Hawaii.”

Golf in that tropical paradise rose in value with the strong Asian economy in the late 1980s and early ‘90s. When the high rollers from Japan stopped coming to Hawaii after the Asian economy weakened, play levels at many local resorts dropped precipitiously and some properties were put up for sale. A few Hawaiian courses are still reeling from the negative aftereffects of that boom-then-bust period.

Ray Metz, the general manager of Cabo del Sol and an employee of the course’s management company, Troon Golf, is concerned about the rising prices but hedges his predictions based on market trends. “We’re pushing the envelope with our prices,” admits Metz. “But as long as the guests receive value, we’ll be okay.” The value comes in the form of high service standards and tip-top course conditions. Cabo del Sol addresses the latter element by having 63 people – about five times that of most 18-hole courses – on its maintenance staff.

Cabo’s golf prices are not too far off from the courses in its primary “destination” competitors – Phoenix/Scottsdale, Palm Springs and southern Texas – and its quality of golf and weather often exceeds those areas. Most of the players who come to Cabo are from California, Arizona and Texas (40%), with people from the East Coast (20%) and Washington and Oregon (10%) also filling up Cabo’s tee sheets.

The drive to make Cabo a premium golf destination will continue. Mexico’s tourist division has earmarked Baja as such, and major hotel chains – Fiesta Americana, Sheraton, Marriott, Hyatt, etc. – have either arrived or are building facilities. Says Metz, “When the bigger hotel chains come looking, there must be something to the area. We’ve got the big companies interested, and that tells us the area will be expanding. Golf is a big business. The big management companies (Club Corp of America and Troon) have come in, and they know how to elevate the experience for an American clientele.”

Steve Dodson, the head pro at Cabo San Lucas Country Club, has quite a perspective on Cabo’s emergence as a golf destination. “When I came here eight years ago, there were no telephones. Everyone had a ship-to-shore radio. When a truck came into town with supplies for the grocery, everyone knew it and there’d be a race to the store.

“Now everyone has phones,” Dodson said. “In a short span, the growth we’ve seen has been unbelievable. You could almost buy a cactus and make money off it in five years.” Facetiously speaking, maybe it would be a good idea to buy a prime-time round of golf in 2001 as an investment and resell it some day when the time is ripe.

Realistically though, golf is not a year-round activity in this part of the world which routinely experiences 100-plus-degree temperatures during the summer. One of the biggest challenges facing Cabo golf is drawing players during these times. It’s hard to get a tee time between mid-October and March, with many courses turning away players in February. But the sport dies down the rest of the year, and that’s when golfers can get bargain rates at some of the world’s most spectacular courses. Between mid-June and mid-October, for example, the 320-room Fiesta Americana Hotel and Cabo del Sol Golf Course team up on a $250-per-day package that includes overnight accommodations and unlimited golf for two.

Look for more of these cooperative off-season stay-and-play packages in the future as Cabo looks to keep ahead of the game and ensure the rounds keep coming.