Originally created 02/24/03

Masters spending feels corporate cutbacks



The freewheeling corporate spending that goes on in Augusta during the Masters Tournament is why many local businesses call the annual event "Christmas in April."

This year, though, Santa's bag isn't going to be as full.

With a sputtering economy, a focus on fiscal responsibility, the possibility of war with Iraq and the controversy surrounding Augusta National Golf Club's membership, most Fortune 500 companies have cut back on hospitality spending.

Several tournament regulars, including CBS, Citigroup and Cadillac, aren't spending money at all.

"IBM, J.P. Morgan, Coca-Cola - they've all canceled on me. The list goes on and on," said Bill Waters, the owner of Waters Van Rentals.

Corporations rented nearly 400 of his 11-passenger vans last year to shuttle executives and guests between corporate hospitality suites and the tournament. This year, he said, corporations have reserved fewer than 200.

Other sectors of the city's service industry also feel the pinch. Rental home brokers, caterers, limousine and van companies - all the way down to the guy who rents two-way radios to chauffeurs - have seen a decline in business.

"I'm going to be way off," said Spiro Papadopolous, the owner of Augusta Communications.

"Right now, 50 percent of the people I dealt with last year aren't coming," he said, noting that Lucent Technologies, Wachovia and Southern Co. will be among this year's corporate no-shows.

"Of the companies that are coming," said Diane Starr, the owner of Corporate Quarters Inc. and Master Kitchen Kaddies Inc., "most have cut back their numbers."

Evidence of the corporate pullback is mostly anecdotal. Rental brokers mention estate-size homes in gated communities that went for $15,000 last year fetching only $8,000 this year. Caterers who served $200 dinners to a group of 40 executives last year say only 15 are coming this year. Golf courses, whose tee times are normally booked months in advance, say they still have openings.

"Big companies are mostly what we get (that week), and there has been a dropoff," said Scott Allen, an assistant pro at Augusta's Forest Hills Golf Club. "I think we're going to fill up; it's just going to take a little more time."

Some businesses have suffered more than others. Caterer Vera Stewart, the owner of Very Vera, saw her Masters Week business shrivel when her two main clients, Coca-Cola and IBM, canceled their plans. Her friend Terry Wick, the owner of Events and More, who also had two Fortune 500 companies pull out, was able to pick up several smaller companies to fill in the gaps.

The smaller companies contacted Mr. Wick after reading about him in news stories about Martha Burk, the head of the National Council of Women's Organizations, who is leading a protest against the Augusta National's male-only membership.

Mr. Wick said the decline in Masters spending has more to do with the economy than the Burk campaign. Lewis Blanchard, whose Augusta company organizes corporate hospitality events nationwide, agrees.

"Masters spending is down, but there's not an event that's not down right now," said Mr. Blanchard, the president of Executive Marketing. "We do the U.S. Open, the Super Bowl, the Final Four; you can't attribute all of that to Martha Burk."

There's also the post-Enron quotient - it's not a good time for companies to be associated with greed and excess.

"How is it going to look if your company's stock has dropped 50 percent and you're flying guests into Augusta on the corporate jet?" said Kevin Goldsmith, the owner of Pullman Hall catering services in Augusta.

The lighter corporate presence and less demand for high-end catering and luxurious home rentals could change the dynamics of visitor spending.

"I think the restaurants and the hotels are going to have a good year," Mr. Goldsmith said.

Out of about 20 hotels called this month, mid- to-higher-priced hotels in the Washington Road area reported they were mostly full for the tournament week, excluding a few open rooms during practice rounds. Some lower-priced inns and accommodations in other parts of Augusta, however, reported vacancies.

Independent home-rental companies that represent area homeowners, most of whom have been accustomed to getting top dollar, are reporting higher vacancies and lower rental rates.

"Things had gotten a little crazy for a couple of years," Ms. Starr said. "This might be a leveling agent to bring people back down to Earth."

But the Masters Housing Bureau, the rental service sanctioned by the Augusta National and operated by the Augusta Metro Chamber of Commerce, reports rentals 10 percent to 15 percent higher than they were this time last year.

"When it's all said and done, I think the Masters will go on very well," said Ed Presnell, the chamber president. "At the end of the day, we should be equal if not better than previous years."

Augusta National does not disclose attendance figures nor the number of tournament badges it issues, making it difficult for tourism officials to estimate the tournament's economic impact.

Business owners do not expect attendance at this year's tournament to be any different from the past, though - no ticket will go unused.

Staff Writers David Westin and Jeremy Craig contributed to this article.

Reach Damon Cline at (706) 823-3486 or dcline@augustachronicle.com.