Is golf as a business declining?

[superduper]

my friend who is a clubmaker complains that the number of golfers is declining each day.  I also feel the same way.   A few months ago, we knew that several major retail chain stores closed their business.   Yet, those two giant OEMs keep releasing new products almost every month.  Last month, I played with a friend at a local muni course on a thursday afternoon.  And it was to be honest a sleepy day.  There was only a group behind us consists of 2 golfers.   Back in the 2009, that course was packed even during a work day.  I remember our group had to line up waiting for 3 other groups teeing off.  So what do you think?  Is golf declining as a business?   Including public courses and golf retail shops?  And WHY?

[GolfSpy Barbajo]

Interesting question -- I have a buddy who's a teaching pro and his thought is that golf may be "right-sizing."  Should courses be that crowded?  Maybe it's not such a bad thing...

 

I'm not sure if I agree with him or not, but courses are trying to be creative in finding ways to fill their tee sheets.  I think the GolfNow model isn't necessarily good for courses.  Basically, in exchange for their tee time service, courses have to give GolfNow free tee times that they can sell at steep discounts. Tends to devalue the course's regular rates, in my opinion.  Courses do need to find ways to get "butts in the seats" so to speak, in order to stay in business, but I'm not sure the GolfNow model is proving to be effective.  

 

Things like FootGolf and Fling Golf may not create a new generation of golfers, but at least it's a source of revenue for some courses.  I'm hearing of some pretty creative organizations working with courses to get people to play more golf, as opposed to creating more golfers.  

[fozcycle]

Recently, my club "downsized" the membership.   They can make more off the publicpaying rack rates than they can can off of incremental memberships, playing more than 8 - 12 times a month.

 

I say hogwash.  Those extra public customers may pay more to play but they don't patronize the Bev Cart and the Pub like members do.

[NiftyNiblick]

The working class that discovered golf in the 1950s can no longer afford to play.

 

People who worked in union factories could afford to play golf.

 

People who work in retail stores or make lattes or burgers cannot.

 

I really believe that it's that simple.

 

Also, towns can't afford to maintain munies.

 

Member owned clubs are out of most people's reach.

 

Non-member owned clubs like mine are only moderately more affordable, and if they start accepting green fee players to increase revenues, the members get less for their money and drop out.

 

It is not impossible to envision golf joining ocean yacht racing and polo as an ultra-plutocrat activity.

 

For far too many people, it's getting harder and harder to pay for more important things like mortgages and tuitions and health insurance.  Golf, sad to say, is the most expendable among those things.

[Kenny B]

Recently, my club "downsized" the membership.   They can make more off the publicpaying rack rates than they can can off of incremental memberships, playing more than 8 - 12 times a month.

 

I say hogwash.  Those extra public customers may pay more to play but they don't patronize the Bev Cart and the Pub like members do.

 

Sadly, the club will also find that as more public plays, the course deteriorates.  I've seen it happen.  Divots aren't replaced (or in your case filled); ball marks are not repaired; divots on the greens made by putter heads; carts driven where they shouldn't go; beer and pop cans everywhere but in garbage cans; I could go on and on, but you get the idea.  The club has to respond and fix all of this, and member rates will go up.  Whether they fix all of the problems caused by public play or not, the members will ultimately play a less quality course.

[silver & black]

The working class that discovered golf in the 1950s can no longer afford to play.

 

People who worked in union factories could afford to play golf.

 

People who work in retail stores or make lattes or burgers cannot.

 

I really believe that it's that simple.

 

Also, towns can't afford to maintain munies.

 

Member owned clubs are out of most people's reach.

 

Non-member owned clubs like mine are only moderately more affordable, and if they start accepting green fee players to increase revenues, the members get less for their money and drop out.

 

It is not impossible to envision golf joining ocean yacht racing and polo as an ultra-plutocrat activity.

 

For far too many people, it's getting harder and harder to pay for more important things like mortgages and tuitions and health insurance.  Golf, sad to say, is the most expendable among those things.

This.... exactly!

[PlaidJacket]

Interesting question indeed. But we've been having this discussion for years now. Especially the USGA & PGA.  But in my little neck of the woods golf is going great. No course or club closures. Quite frankly I think we could use a new semi-private course. And I mean a good one. Not some lame scrape off with a beer cart and shitty range. We have only one retail strip center golf shop here. They appear to do well it seems. I'm in an oil economy and that helps even though it's down right now. Wages and salaries are pretty high. There are three private clubs here. None of them have ever gone under. Good times or bad.

 

Is the golf business in trouble? Probably depends where you live I'd say. Many areas of the country overbuilt.  Like some say down here in Texas. "We're culling the heard". Think about it. Golf went through an unprecedented boom. But so have lots of business throughout time. Where are they all now? Mostly gone! And golf is a business. I'll also be the first to say that I don't know jack about running a golf course. But in general it has to take a lot of money each month to properly maintain an 18-hole facility in good condition. And that's not even counting the clubhouse. As far as I'm concerned these days I couldn't GARA about a fancy clubhouse and all the overhead that goes along with it. Been there done that. More than once. I recall when I was younger and a member at a fancy club with fine dining, tennis, pool, spa, fitness center, racket ball courts, and on and on and on. Guess what? I never used any of that stuff. I played golf and lots of it. Nice courses too I'll add.

 

This past summer I finally decided to go play Diamondback Golf Course in Abilene, Texas. It's owned by former PGA champ and Masters Champion Charles Coody. Now this is a golf course. 18 holes of great golf. A nice practice range and even nicer practice green and short game area. And that's all it is. Sure, it has a modest Pro Shop but no equipment for sale. Mostly hats, shirts, balls, and a few basic accessories. They'll also provide lessons. The course has a small walk-up window where you can get a hot-dog and a cold beer or sandwich. But that's it. Fine with me. I go there to play a great golf course that has a challenging layout and is maintained very well. However, my first time there I had the pleasure to meet Charles and we chatted a bit. I recall at one point he alluded to how tough the business is and he thanked me for coming. I suspect he makes money alright but I somehow doubt it's his main source of income. 

 

So concluding I say yes. The golf course business is a dicey business to be in. Anywhere. Could I do any better than the next guy trying to make a buck out of it? Who knows? I do know one thing. I'd have none of the high overhead type clubs that are the industry model these days. I'd follow the Coody route if at all.

[apprenti23]

Been saying for years that courses have been trying to achieve unobtainable numbers. Declining back to where it should be sounds about right to me. Healthier.

[NiftyNiblick]

I'll go out on a limb and guess that the other "daig" and I are looking at this from entirely different socio-political perspectives!


Another example of MGS diversity!!!

[GolfSpy Barbajo]

There are a couple of B-level courses near me that appear to be doing quite well.  Both are public - decent courses but not what you'd call spectacular.  Both have a thriving wedding/function business - it's always fun practicing on the putting green while an unsuspecting  young couple is talking their wedding vows in the courtyard!

 

One of the courses has an excellent restaurant that always busy and open year round (my daughter worked their for a year), while the other has more of a snack bar.  That course has a TON of tournaments and events -- but you can still get a tee time when you want.  The other course is, in my opinion, on the verge of overpricing itself.  It's a very good $40-$50/round course, but a terrible $60+ course.  If you want to play between 8 and 2 on weekdays, or Sat/Sun before 2, it'll cost you $60+ with cart.  Not worth it.  Also noticing the greens are quite as well kept as they used to be - the greens were always a plus at this particular course.  I'm guessing the hike in greens fees over the past two years may be coinciding with a relative drop in play, but that's just a guess.

 

The other course is always in pristine condition - can be played for $35 or so during the week (cart is extra, but it's an eminently walkable course), and is fun to play.  Not sure what this all means, but both courses have a lot of competition here in MN, and both seem to be doing okay.  I'm guessing the function/event business helps fund the overall operation, but both have pleasant staff, easy to navigate websites and the experience at each is always positive.

 

There's a C-level course nearby that was rumored to be closing down.  I was a member there for a year - won a discounted membership at a silent auction for a bargain price, but I hated every round I played there.  Staff was kinda surly and the course was one of the strangest layouts I've ever seen.  Oh, and it was usually in terrible condition.  No surprise that it's struggling.

 

What does it mean?  IMO - whatever business model you choose, if you run it well, treat customers right and make the experience enjoyable, people will come back.

[ZenGolfer]

The golf industry has been shrinking for quite a number of years now.

[NiftyNiblick]

The Charles Coody owned Texas course described by PlaidJacket seems to be the polar opposite of our place.

When our club was member-owned, it didn't have golf at all. It had tennis, shooting sports (trap, skeet), a nice clubhouse and swimming pool, and a once active social calendar. It was abutted, however, by a scruffy, poorly maintained muni that had been an FDR era WPA project.

The club's membership was wealthy but aging and static. The muni was losing money for the town and quite frankly, an eyesore for the club. Eventually, a private company bought both the muni from the town and the club from the equity membership. The adjoining properties were merged, the golf course was completely renovated, and the membership was opened up to new and often less patrician subscribers.

The course was radically altered from its original 1930s configuration and became a very pretty 5300 yard, par 66 layout, not attractive to many very serious players but extremely attractive to social, recreational players. That made room for a field turf (just the hitting line, of course, not the target fairway!) practice tee that was absent from the muni. There is only one set of field turf tees on the course and only one line of yardages on the scorecard. The course is well maintained, and the bunkers are unlike the hard pan disasters that were on the original course. They're actually fluffy but not brutally punative. The place is not for everybody, doesn't even have a website (unheard of in 2015), but the membership has a waiting list...for now.

I love both the course and the club. There are many here who might not. But I wonder how long it can last the way the modern economy has devastated the social order that existed during earlier prosperity.

[superduper]

A lot of private clubs discussion here.  Well I have never been a member of a private club.  I do not  have to be.  You pay a yearly membership and you play at that course all the time?  how boring is that?      But I was a member of a golf club (not a course, simply a group of people).   We had a monthly tournament and there was a trophy for the winner.   And we played at many different courses all year round.    

[Kenny B]

Although there are some forum members here that belong to private clubs, I think most people that play a lot join a club at a public golf course simply because it is cheaper than a country club and also cheaper than paying daily fees at various courses.  I probably could join the local country club, but for that cost I could join a club at a public course and afford to travel around the Northwest to play lots of courses.  I don't like playing the same course ALL the time, but it's nice to just go to the course whenever I want.  Last month I joined a local public course simply because it was cheaper than paying the daily fees for as much as I play.  I will still travel because I like playing different courses.

[NiftyNiblick]

I completely understand what you're saying, guys. Modest private clubs with middle and lower middle class memberships are simply ONE area in the modern economy where golf is shrinking.

 

 

 

The game is being squeezed in many areas. Public courses. Off course golf shops. People taking lessons. People taking up the game. Equipment companies going under. It's all part of the same problem.

 

 

 

It was not my intention to offer my story as the only example in which golf appears to be on the decline. Indeed, our club seems stable right now, but one merely wonders for how long.

[rickkimbrell]

A lot of private clubs discussion here.  Well I have never been a member of a private club.  I do not  have to be.  You pay a yearly membership and you play at that course all the time?  how boring is that?      But I was a member of a golf club (not a course, simply a group of people).   We had a monthly tournament and there was a trophy for the winner.   And we played at many different courses all year round.    

 

I guess some people who are members of private clubs ONLY play at that course but that is not true for everyone.  I have belonged to 5 different private clubs over the years and have never just played the club where I belonged.  Currently am a member at the one where I live.  But I too belong to a traveling golf club and we play all over the Greater Houston area 2 times every month.  I also play a lot of golf at different golf courses in the area outside of my traveling group.  I belong to the club where I live because it is convenient to get in my golf cart and go play anywhere from a handful of holes to 18 or more in the summer months when I get off work.  The range is convenient and I play in some (not all) of their tournaments.  Some formats I just do not like.   

[revkev]

I want to start by apologizing to Super - my first thought when I saw this thread started was not flattering because as someone else mentioned we've beaten this to death over the past few years. 

 

The obvious answer is, Yes! 

 

However we have several newer members who bring different perspectives to the question.  I'm enjoying the fresh look at the problem.  I'm also thinking that while the answer remains yes the reasons for the yes may shift based upon location.  I grew up playing in the Northeast.  Given how expensive it is to live there much less play golf is pretty miraculous that I even took up the sport and my circumstance was clearly upper middle class.  It does not surprise me at all that people have stopped playing there as they are being squeezed in a variety of ways - you need lots of money if you want to play much golf in Connecticut. 

 

In Florida the issue is clearly a period of correction off of a time when courses were over built around housing developments that were also over built.  In my area we have numerous private club wanna be's that are either now Daily Fee or defunct.  We've lost a Muni because St. Pete is hoping that it is the site of a potential new stadium for the Rays, if not it will become some sort of housing.  Golf is fairly affordable here for most people but courses are crowded and more expensive in the winter/spring season.

[jbil8802]

A lot of private clubs discussion here. Well I have never been a member of a private club. I do not have to be. You pay a yearly membership and you play at that course all the time? how boring is that? But I was a member of a golf club (not a course, simply a group of people). We had a monthly tournament and there was a trophy for the winner. And we played at many different courses all year round.

I don't find it to be boring at all actually. The course is beautiful and the layout and character of each hole are excellent. I never get tired of playing it. Tournaments and events are also a lot of fun. The friendships, camaraderie, and connections have become priceless to me.

 

In all honesty I no longer have a desire to play the more beat up public courses with greens that look like they've had dance parties on them. There are a few that I still enjoy playing and will continue to do so occasionally. There's no leash that ties me down to my club course.

[NiftyNiblick]

I completely understand super's disinterest in private clubs.

There's no need to join a club if you're only interested in the golf. At least for now, there are plenty of places to play golf.

Joining a club is about the golf, yes, but it's also about a place to go and hang out, a place to play cards, a place to read, a place to go to dinner, or even breakfast, a place that has dances and social functions, a place for your wife to play tennis is she's so inclined, a place to beat balls on the range, a place with a swimming pool if you don't have one which I don't--it's a club.

Everybody isn't interested in a club. That's totally cool. There's nothing wrong with just wanting to play golf, and wanting to play at different venues. I would never criticize anybody for that. And even if you like belonging to a club, there's no necessity to join one with a golf course.

The thread was about the economics of golf, and I never intended to lean it toward the sociology of golf.

If anything I said was interpreted by super or anyone else to discount public links golf, an important national institution, it was inadvertent and I apologize.

[Dhuck Whooker]

Yes shrinking. I live in a large metropolitan area, in 2008 the older courses in the densely populated suburbs were poised to sell to developers but the real estate bubble popped so these courses stayed open. For years we had golf glut, lots of courses, low rates, great availability. But not sustainable.

 

Today, ironically, as things get better economically, these courses are selling to developers, some of these are the old classics, where my dad played when he was a kid in the 1950s, inevitable but still sad.

[sp0rtsfan86]

The courses in NJ have gone from full up to having to do bonuses for members. It started with non county residents getting the ability to get a membership card, then it was free golf after 15 rounds. Now they offer 9 hole rates and super twilight rates.  In Yuma, the courses try anything to get people for summer, in winter they are all at max capacity due to the influx of winter visitors. 

 

Now I rarely play golf without checking golf now. They've devalued the courses too much for me to play rack rate. That being said, golf is going through a natural cycle of downturn. courses are forced to get smarter, greener and provide greater value. If they don't they die. Simple. 

 

However, a bigger truth. I don't see a ton of people my age playing. I don't see golf diehards that are 20-30 years old. There's two guys I've played with on my home course who are diehards and where I was 10 years ago. Both stink, although one is probably about 6 months of playing once a week from breaking 90. They have friends who have tried golf and gave it up because they stink.  The point is is you always need a lot of newbies to fill in the ranks of those that tried it and leave it. I'm not sure many millennials have the time and money to devote to the sport, especially when good paying and stable jobs are tough to come by and on top of it, you are going to be horrible for 6 months just to get somewhat good at it.

[jbil8802]

I see the same thing at my club. There's maybe 30 of us that are in our 20s out of 400 or so members. I would say 35% are from 20-49 and 65% are 50 and older. Gotta get some younger guys in. It'll be interesting to see what the membership looks like when I'm 50.

[revkev]

Super the reason there is a lot about private clubs is that a shift from private to semi private or daily fee is a sign of decline in the industry. Private clubs go that way, up scale daily fee courses and sometimes munis close when the golf industry declines. That's what's happening in my area.

 

I there are however a lot of young people playing golf here.

[superduper]

just wondering,  how much is called an affordable cost to play golf for 18 holes?   if you are between 20 to 50 years old middle class....

[Fireinthehole]

Went to my local club builder who thought he might sell 5 tmag m1s but he said he's already sold 23!

That's crazy... For all the ups and downs I thought that was high. The two courses I have memberships too have definitely been struggling for members especially my age 20-30.

[Kenny B]

just wondering,  how much is called an affordable cost to play golf for 18 holes?   if you are between 20 to 50 years old middle class....

 

There are so many variables in answering your question.  Affordable to you is probably different than affordable to me or anyone else.  It also depends on what part of the country you live; whether it's in-season or off-season; whether you play munis, clubs or resorts; and whether or not your area is golf-starved or golf-glut.  Are you talking about the daily fee cost or buying an annual membership?

 

I can only give you my experience and I know others will give different answers.  I have done a fair amount of traveling around the country to play but haven't been everywhere.  

 

Here in the Northwest a round of golf will run anywhere from $30 to $150 and that may or may not include a cart depending on the course.  I like to find courses and deals that are in the $50 range or less.  

 

Seasonal areas like Arizona and Florida are expensive in the winter and cheap in the summer.  I played in Naples Florida in July for cart fee.  I've played TPC Scottsdale in July for $50; in January it's $300.  You can find good deals in these area during their "shoulder season" in spring/fall.

 

Non-resort areas without big season changes are more stable, but again it is location specific.  I have found good values playing nice courses in Tennessee, for example.

 

Memberships are a different story.  Some clubs charge an "initiation fee" where you buy into the club.  That can range from several hundred dollars to tens of thousands of dollars.  If they are not private clubs, there is usually no fee, but an annual membership is likely to be about $2K, again depending on your location.  I just joined a local course and it's $2300 but that is for both my wife and I and includes a cart.  A single is about $1400 without a cart.  I know a guy in Idaho that plays on three city courses and pays $400 annually walking.  Three courses!  That's a deal.

[silver & black]

I buy a membership at my home course every year. It's $330.00 a year. You can play as much as you want for no more money all year, if you walk. If you want a cart, it's $12.00 on weekends and $10.00 on week days for 18 holes. I will play a few nicer courses during the season, but I won't/can't pay more than $50.00 a few times a year.

[Kenny B]

I buy a membership at my home course every year. It's $330.00 a year. You can play as much as you want for no more money all year, if you walk. If you want a cart, it's $12.00 on weekends and $10.00 on week days for 18 holes. I will play a few nicer courses during the season, but I won't/can't pay more than $50.00 a few times a year.

 

That's a deal!  My old course that I still play occasionally was $900 a year for both my wife and I with a cart.  However, the course had "issues" and the carts are, well, very old and unreliable is being kind.  We usually walk.  Going from $900 to $2300 is a bit of a shock, but my new course is much, much nicer and more playable typical of all other courses we play in the area or when we travel.  To me, it's worth it.  I don't have a lot of golf years left, and I want to enjoy my rounds as much as possible.