It’s a good sign that the Lotte Championship is marking the 10th anniversary of the Ladies Professional Golf Association event in Hawaii, where the golf industry is working hard to recover its A-game in the pandemic.

The golf industry experienced unexpected growth in almost every state in America the past two years — except Hawaii. Mark Rolfing, golf analyst for NBC and Golf Channel, says they were arguably the best years ever for the industry.

That wasn’t the case in Hawaii, where pandemic regulations kept courses closed longer, and even led to the permanent closure of Koolau Golf Course, which is now being operated as a golf academy.

Rolfing says the Lotte, held at Hoakalei Country Club in Ewa Beach through Saturday, could help the state start cashing in on the recent increase in the popularity of golf on the mainland, as well as highlight Hawaii as a tourist destination.

Businesses across Oahu, especially on the West side, say the boost in business in the weeks leading up to the tournament and the event itself will help Hawaii’s golf industry complete the turnaround that began last year as rounds picked up.

Erik Matuszewski, National Golf Foundation editorial director, said Hawaii rounds were up 26% last year — the most meaningful increase in play of any state. However, Rolfing said revenues at Hawaii courses were still way down, as rounds played by locals don’t bring in as much money as rounds played by tourists, who he says are vital to the success of Hawaii’s golf industry.

Reid Yoshida, general manager at Embassy Suites by Hilton Oahu Kapolei, said the hotel was sold out for the Lotte Championship, which filled rooms with a TV production crew and golfers from Korea.

“I know our food and beverage department also have made a little bit more money from the golfers and those that follow them,” Yoshida said. “The Lotte couldn’t have come at a better time. There’s so much pent-up demand for Hawaii. “

Ken Terao, executive director of the Hoakalei Country Club, said the buzz surrounding the Lotte Championship could help Hawaii golf courses gain ground as visitors from Asia are poised to begin coming back in higher numbers.

“A lot of the LPGA players are staying at the Hampton Inn at Ka Makana Ali‘i,” Terao said. “The Four Seasons hosted the gala banquet and the Pro-Am. Many guests are staying at Aulani. It was great for the West side of Oahu.”

Pandemic impacts

The event is the break that eluded Hawaii’s golf industry throughout most of the pandemic. Matuszewski said local courses lagged those in other states at the height of the pandemic because of the nexus between golf and tourism in Hawaii, where 32% of the 75 facilities with golf courses had resort/real estate ties.

“This compares to about 8% in the continental U.S., so obviously there’s a significant visitor-related impact on the Hawaiian golf economy,” Matuszewski said.

In 2020, rounds at the 87 courses in Hawaii were down 33% versus the prior year, he said. For context, Matuszewski said play was up 14% nationwide in 2020 even with spring COVID-19 shutdowns, as golfers sought out golf courses as a safe, healthy, outdoor activity.

NGF data showed that Nevada, which also has a significant tourism component, was the only other state that saw a decline in play in 2020.

“Given that Hawaii was the U.S. state with the longest-lasting and most restrictive entrance policies following the coronavirus outbreak, there was a significant impact on play in the islands versus normal periods when traveling golfers/tourism help drive rounds at many Hawaii facilities,” according to NGF.

Since Hoakalei is a membership course, Terao said, it fared better than more tourism-dependent courses.

“The local members sustained us. We were never in the red,” he said.

However, Terao added that Hoakalei experienced dramatic revenue losses in the earlier part of the pandemic, some of it tied to drops from Japan, which supplies 30% of the course’s members.

“Our members from Japan typically spend more, especially on omiyages (gifts),” he said.

Terao expects better times are coming since Hoakalei has secured the Lotte Championship, its long-anticipated first professionally televised tournament. The opening of a $23 million clubhouse at Hoakalei Country Club in 2019 made the LPGA event possible, he said.

“We had to make tweaks to the course but were willing to take a loss to host our first televised golf event,” Terao said. “The event offers great prestige for our members, and will draw more members.”

In addition to investing in the course, Terao said he hired Chef Kevin Story, who formerly cooked for billionaire Larry Ellison on Lanai, in advance of the tournament.

Terao said the club has a waiting list for social memberships and its dining memberships are nearly filled up. However, he hopes interest in the club’s full memberships will rise from its current 440 to 550.

“This tournament is getting good TV play and will help build interest in memberships,” he said.

Television exposure

Rolfing said the state’s lack of a robust televised tournament schedule also has played a role in how well Hawaii courses are positioned relative to other destinations.

Hawaii once hosted a record nine professional tournaments, including five PGA and four LPGA tournaments. Now, it’s down to three PGA tournaments — the Sentry Tournament of Champions at Kapalua on Maui, the Sony Open in Hawaii at Waialae on Oahu and the Mitsubishi Electric Championship at Hualalai on Hawaii island.

Professionally televised tournaments visually showcase Hawaii golf courses and send a message that they are worth a plane trip, Rolfing said.

He added that multiyear sponsorships are important to keep golf tournaments in Hawaii, where they are already so expensive.

“It costs considerably more to put a golf tournament on TV than a football game,” he said. “In the case of the Lotte, we are tracking 144 players, 144 balls and 144 scores.”

Rolfing said TV sports channels used to keep television equipment in Hawaii full time when the NFL Pro Bowl was played here. But now everything has to be shipped into Hawaii, which can cost up to 40% more than sending equipment to locations on the mainland.

The Lotte has been the only LPGA tournament in Hawaii since 2009, when the Kapalua LPGA Classic was canceled. Hawaii was left off the LPGA’s 2010 and 2011 schedules, but the event returned in 2012 with the Lotte sponsorship.

Kelly Hyne, chief sales officer for the LPGA, said in a statement, “We are happy to partner with the Hawaii Tourism Authority (HTA) and further this long-standing relationship.

“Hawaii is always a favorite stop for many of our LPGA Tour players and staff. We look forward to sharing our love of the islands with our global audience.”

Sports marketing

There is an obvious connection between tourism and many sporting events. Still, HTA’s decision to support this year’s Lotte drew some criticism. Most of the scrutiny came because HTA agreed to the $250,000 sponsorship just last month, well after the LPGA had committed to host the event. More commonly, the greater part of sports marketing partnership costs go toward securing events.

Previous HTA sports marketing decisions also have been questioned, such as spending or not spending millions to fund the NFL Pro Bowl, which ended its run in Hawaii in 2016.

The HTA also previously took heat when the state lost high-profile golfing events, like in 2010 when the PGA Tour pulled both the PGA Grand Slam and the Turtle Bay Championship in the wake of the dwindling economy and the subsequent drop-off in sponsorship money.

The LPGA has played events here for four decades, but the commitment to Hawaii has been stronger during some years over others.

HTA President and CEO John De Fries said HTA board members saw the Lotte Championship as a chance to strengthen relationships with the LPGA and the Lotte Corp., a South Korean multinational conglomerate — brands it believes are good partners in their efforts to grow “regenerative” tourism.

The event was broadcast live on the Golf Channel during all four rounds from 1 to 5 p.m. (7 to 11 p.m. Eastern time). The sponsorship gave HTA commercial marketing rights and provided the community with benefits such as free tournament attendance for about 5,000 residents.

At this stage in the pandemic, golf is one of the few sporting events HTA still is funding. HTA’s fiscal year 2022 sports budget is $3.67 million, of which some $2.4 million, or roughly 66%, has been reserved for golf.

In addition to supporting the LPGA, HTA has allocated $2.17 million for PGA Tour contracts. The agency also has $167,000 budgeted for a branding partnership with University of Hawaii athletics.

HTA brand manager Ross Willkom said golfers tend to be “high dollar, low impact” travelers.

He estimated the economic impact of HTA’s Lotte sponsorship at more than $10 million, with a marketing value above $5.6 million.

Willkom said the sponsorship also was an opportunity to increase gender equity, with a golf clinic for up to 40 women, along with a new girls golf chapter to support junior golf in the islands.

Willkom said the field of Lotte Championship players is the most international of all Hawaii’s professional tournaments.

The large number of top players from the Asia-Pacific region provides a possibility of additional free media similar in scale to that which accompanied Hideki Matsuyama’s win at the Sony Open, De Fries said.

“Golf is the one televised event that is really outdoors and the real star is nature,” De Fries said.