Callaway Gardens takes action to cut costs

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PINE MOUNTAIN, Ga. (AP) — After selling more than half of its 13,000 acres last year, Callaway Gardens is now taking new actions to cut costs.

The resort in Pine Mountain is eliminating some jobs and will close the gardens for more than a week in early January, the Columbus Ledger-Enquirer reports (http://bit.ly/151m7Hm). CEO Edward Callaway said Tuesday the first six months of the year had been worse than expected.

"We spent $2.5 million on capital improvements this year. We thought we would grow our business by that much in the year. We're not going to," Callaway said. The gardens were seeing good growth in daily and weekend visits but that the group business wasn't growing as needed, he said.

Much of the money was used to improve the 274-room Mountain Creek Inn next to Callaway Gardens. Both individual and group travelers were turned off by the hotel and its furnishings, which had gotten "old and tired," Callaway said.

"I'm finding out it takes a while to win a group back," Callaway said. "Groups book three months out, six months out, 12 months out. So we're slowly growing our group business back."

But he estimates that it will take at least two years to pay off the capital expenditures. To compensate for that, he decided to lay off more than a dozen employees, get rid of 15 other positions and reduce the hours for some jobs. Employees are also having to pay a greater share of their health insurance.

Callaway is the grandson of the resort's founders, Cason J. and Virginia Hand Callaway, and son of Howard "Bo" Callaway, a longtime gardens executive and foundation board member.

"I'm adjusting our business and fine-tuning it, and I hate it because we've got great people and great employees," Callaway said. "But we're having to scrimp and skinny down to get through this year so that our revenues exceed our expenditures. We're never going to do anything else but that. That's just a given from now on."

He's also planning to close Callaway Gardens Jan. 1-11, a move he expects will be permanent.

"Last year during that time we had almost no business. It's just a very smart thing to do is close during a period of time when you have very slow business after Fantasy," he said, adding that the resort can use that time for repairs and significant annual maintenance.

The gardens have struggled to come back from the $44 million in debt it had entering 2012. Two land sales that totaled about 7,000 acres helped stem the financial losses. Those sales, along with negotiations with lenders, have helped reduce the debt to about $8 million last year. Callaway has said that's manageable.

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Information from: Columbus Ledger-Enquirer



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