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What is the future of the Golf Economy?


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The golf industry is at its highest levels since, when? maybe peak Tiger era? How long do you expect it will last?

I've read that it will take maybe another year before the supply chain catches up, but will the demand still be high? Should we expect the going rate for drivers to be $600 or $650, next year?

What do you all expect the future of the golf economy to look like? 

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Its like the stock market! right after a high there is a crash. With all the limitations from Covid there were only a few options to get people out of the house. Golfing and Camping went on a tear. This will probably last another year with the now current Delta strain. Once things get back to normal somewhat, the market will be flooded with used campers and you will lose a lot of the golfers that were just looking to get out of the house. I would also think that the market will be flooded with golf equipment. Manufacturers are in over production mode to keep up and if they don't slow down at the right time there will be a lot of equipment becoming available for reduced pricing to clear out excess inventory as well as used equipment coming on the market in droves. These are just my thoughts on the situation.

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There will probably be a small decrease in the number of golfers that play on a regular basis. This time last year there were no tee times available at most courses, whereas this year there’s a few spread out during the day that are open on weekends and the late afternoon spots are available now.

Prices for equipment will probably go up a bit because everything costs more now and no sign of going down anytime soon. 

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My home club is already seeing a decline compared to this time last year. Last summer, you couldn't find a parking space on a random Tuesday afternoon, much less a weekend. Now, I have the course to myself again on weekday afternoons. Saturdays aren't nearly as crowded considering parents are hauling kids to youth sports. Sunday's are the only day that hasn't fallen off at my home club. I don't even bother on Sunday's. It's just far too crowded.

Golf is a niche sport/activity. It will always revert to the mean with noticeable peaks and valleys in-between. This pandemic isn't going to change that permanently in my opinion.

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It isn't as crowded here as last year but play is still up a bit from previous years.  At least if I go now in the evening I can jump around to different holes to avoid 4-somes....last year there weren't any open holes to jump around to.

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Here are a few clues to add on.

Most the demand came from local public golf courses.  Thus, difficult to get a prime time tee at one of the closed in daily fee golf courses.  Most new golfers or the "returning" golfers on such golf courses, the time per round of 18 had been extended from the normal 4-4 1/2 hrs. to close to 6 hours.  Course marshals are not eager to enforce the playing pace, because the golf courses are looking to rack up the lost revenues from 1 year ago.  Green fees are up.  No promotions for the local golf courses.

Most the resort type, and the high end public daily fee type are sending out promotions for reduced lodging and green fees.  This including some of the top in their class.

What this tells me is this.  Most the crowd on the golf courses now are new to the game or had not been a regular to the game.  How to capture these and turn them into a regular patron, will be the key to the future economy of golf industry.   The sudden surge of the golfing population was as simple as , this was the only outdoor sports that was available, did not require a long trip nor a lot of money.  Basically, no competition except for hiking/camping.

With the rising cost of the green fees and the gradual opening of the economy for other type of recreation.  More are traveling by air now, more are going to the traditional destinations...... more are dinning out......... There would be a balancing point of supply meets demand and this craze will blow over .

Let's face it, this game is not easy to be good.  Personally, I don't see someone "enjoying" this game when they couldn't even advance the golf balls more than 150 yards to their intended target.  It is still affordable, but tittering on the edge for people to say, wait, I could have done , other things .  

As for equipment ?  All the high price tag and the "fitting craze" will also meet the reality of whether the average person will see this game as they wish to dump everything they have as disposable income into.  A lot of them will go back to fine dinning, traveling and their usual activities.

The issue lies with, the industry could not turn up more new golf courses over night.  It take a lot of investment and time to develop a golf course.  Many still remembered the wave of closing down the golf course not that long ago.

As for golf clubs ?  Personally, I'm not too excited to spend close to a Grand for a driver which will not last more than a few years.  Not worth it to me for the extra 10-15 yards,  I'd take one more club on the approach shot.  The same principle apply, supply meets demand.  The equipment world lost some of it's luster when everyone promised the same thing and way too fast to come out with new models.  Unless there is an affordable new material involved, they're the same year after year.

 

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3 hours ago, sixcat said:

My home club is already seeing a decline compared to this time last year. Last summer, you couldn't find a parking space on a random Tuesday afternoon, much less a weekend. Now, I have the course to myself again on weekday afternoons. Saturdays aren't nearly as crowded considering parents are hauling kids to youth sports. Sunday's are the only day that hasn't fallen off at my home club. I don't even bother on Sunday's. It's just far too crowded.

Golf is a niche sport/activity. It will always revert to the mean with noticeable peaks and valleys in-between. This pandemic isn't going to change that permanently in my opinion.

I will add, my club has seen a noticeable increase in membership applications over the past 18 months. Given the abnormally high number members that passed away in that same time frame, I don't think we gained in membership though.

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As a daily fee, public course golfer.  I can't see greens fees coming down, at least not in the NY Metro area.  Most courses are hard to get on before noon on a weekend if you're not the first ones to book when you're window opens - resident/non-resident/associate, etc.

As for equipment, prices might stagnate for a bit if there is excess stock, but not to the point where we will see massive roll backs.  With a rise to inflation promised to be on the horizon, new equipment prices will rise as well.  

And of course, all of the people who tried out golf because of the pandemic aren't going to stick with it, but many will.

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I think the golf economy is going to be relatively flat for the coming years. The pandemic has probably helped prevent net golfer losses as a result of elderly golfers that quit playing. However, as others have noted, golf is hard. I think we are probably to the point where all the new golfers start hitting the skill wall where just looking at a golf club no longer improves their performance. Many others have also noted some return to normalcy regarding tee times on public courses. Once people have to start leaving their house to work again, they won't be so anxious to get out of the house to play golf when they are done with work.

Regarding equipment, it's tough to say. If manufacturing and shipping costs (inflation) keep going up I expect golf club prices to stay stable or increase. I'm not sure what inventories and production looks like for the golf companies but I'm honestly not expecting a crash in the equipment space. If there is a crash it will be on the putter side of the market where everyone and their dog is milling a $300+ putter but I've been saying this since before the pandemic. I think more realistically, if golf is flat or there is a supply imbalance we will probably see the return of sales and discounting like in the past. The used club market will be interesting because there are lots of people who will just set their clubs in their basement and forget about them. As far as I've seen, the used market doesn't dictate prices of new clubs. This was evident pre-pandemic as most used clubs would lose in excess of 50% of their value the second the next iteration of clubs would come out. I personally would like to see the used club market go back to where it used to be. It's tough to tinker when used clubs are going nuts. 

I think some of the club fitters may be the losers in the coming years. I think Club Champion has burnt its fair share of bridges over the last two years. The reality is that spending $3k+ on a set of clubs is just not real sustainable for "average people" in the long-term. Plus, as good launch monitors become more accessible, there is no real reason to pay a premium to know what your numbers are. The winner I see in the club fitting space will be existing golf shops that can do a decent fitting for free, especially as better launch monitors become cheaper. I also see the small independent fitters/club repair guys that build custom clubs doing well in the future. The local fitters I know who build Maltby, Hireko, etc. have tons of new customers as new golfers were desperate to find anyone that could get a decent set of clubs in their hands. Plus, with Maltby and Hireko making some genuinely good stuff, I expect to start seeing more and more people play it as it is soooo much cheaper than OEM stuff. 

The other loser I see in the coming years are the likes of Haywood, Ben Hogan, and other DTC companies that aren't Sub70. Selling cheap golf equipment is not an easy business to be in. I expect to see a few companies to stick around but I don't see them all surviving, there's just too many especially with competition from brands like Inesis and whatever store brand Dicks/Golf Galaxy decide to promote. Same goes for the DTC golf brands that aren't Vice or Snell. 

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Another data point that hasn't been mentioned is just how many people "working from home" were in fact "working from the golf course."  On multiple occasions last spring and fall I saw more high school and college age kids on the course at 2 p.m. than any other demographic.  Learning via Zoom was a joke.  Our next door neighbor was a teacher (left to sell real estate in this crazy housing market) and she said the last month of the school year she was averaging 5 kids on camera.  Multiply that by millions of kids, and some of them were out playing golf.  Same at the college level.  

I also talked to a friend who belongs to a local country club and he told me he knew personally of two people who lost their jobs due to being found playing golf rather than working from home.  Tens of thousands of examples of that is a big reason why courses were flooded last year, but not as much this year.  People are back in school, or will be this fall.  Not everyone will be back in the office, but, for example, airline pilots and flight attendants and teachers certainly will be when they weren't last year.  The demand will lessen somewhat but will not revert back to pre-Covid levels since there are a lot who will continue to work from home.  Some will be full-time, and some hybrid, but either way a lot more chances to be on the course than just 2 years ago.  And there will certainly be some stickiness with the extra couple of million who took up the game and will continue to play.  

I'll add an additional question to the thread and one I've posited to fellow golfers in the past:  What happens at the many private clubs that were operating ok, on the margins, with, let's say, 300-350 members.  In 2019, that would describe the majority in this country at a typical country club, not a high end Congressional or Champions, but your typical country club.  Members could get a tee time most of the time when they wanted.  Saturday mornings were a challenge but most any other time was no problem.  NOW, however, that same club has maxed out at 400, or 450, or whatever its cap is.  Tee times are scarce at the club level., not just public courses  What is the pushback going to be, and in some places already is, from the long-standing members who now have upwards of 50% more golfers to compete with for tee times, dinner reservations, etc.?

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1 hour ago, sixcat said:

I will add, my club has seen a noticeable increase in membership applications over the past 18 months. Given the abnormally high number members that passed away in that same time frame, I don't think we gained in membership though.

I was talking to the head pro at the semi-private near me a few months back. The past few years they had offered a few of those "X rounds with cart for $Y" every summer. He said they had ended that because their memberships were through the roof and it didn't make sense to offer deals when he had so many members on the tee sheet and new pending applications. 

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58 minutes ago, ForeRightAgain said:

As a daily fee, public course golfer.  I can't see greens fees coming down, at least not in the NY Metro area.  

As for equipment, prices might stagnate for a bit if there is excess stock, but not to the point where we will see massive roll backs.  With a rise to inflation promised to be on the horizon, new equipment prices will rise as well.  

And of course, all of the people who tried out golf because of the pandemic aren't going to stick with it, but many will.

I'd imagine you won't have many choices of golf courses including 45 min-60min. drive each way.  In our metro area, within an hour drive will have more than 2 dozen golf courses and some are very nice daily fee.

I agree, not to see anything different than the usual NOS for the previous model year, practiced since more than a decade ago.  Inflation is already here if you have no noticed.  everything is higher in price excluding the paycheck.  Some even rolled back on the company share of contribution to the 401K plan.  Benefit cuts is normal.  Tough time is on the horizon for the average salary earner.  Not to mention the small businesses which has been suffering since more than a year ago.  Shipping cost has also put  a huge damper on the internet sellers.  The good old days of no sales tax and low shipping cost is, behind us.

I sincerely hope a major part of these new golfers will stay with the game.  The charm of this game is still the same.  What changed is the perception to the game from the people.  The media had painted the picture of ease of the game.  People see the 300 yard drive and 200+ yards 5 irons with the Tournament Players ........ they thought this game can be bought by taking a few lessons and get fitted for the equipment, and they could "buy" this game .  

As you stated, many of the golfers passed on from old age and personally I know quite a few quit the game because of economic reasons..... we'll need the new replacement to maintain the level which was built up in the last few decades.  More are working in the industry related fields now than ever, and the reverse of direction will put a lot of us,  in financial difficulty.

 

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2 hours ago, russtopherb said:

I was talking to the head pro at the semi-private near me a few months back. The past few years they had offered a few of those "X rounds with cart for $Y" every summer. He said they had ended that because their memberships were through the roof and it didn't make sense to offer deals when he had so many members on the tee sheet and new pending applications. 

I think this will dictate what will happen within the industry. Public course in my area has doubled their green fees over the last year, yes double. That can't continue as people will only pay the outrageous rates for a little while, it has already affected quite a few people I have talked to.  

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4 minutes ago, ShootingYourAge said:

Learning via Zoom was a joke

Good students hates the ZOOM classes.  It is easily fudged and cheated for better grades.  

Eventually, the cheaters will pay the price for not putting in the real effort to learn.  However, the difference of current evaluation on the paper is doing no justice to those kids who did not cheat.

Zoom classroom is the same as remote work place.  I had seen lots of golfers on the golf courses -who looked suspiciously like they should have been at work.  Many were busy on their smart phones between the shots.   No accountability, and no consequences- until they get caught, of course.  Too many are skipping lines !  Skipping the rightful duty and responsibility !

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2 minutes ago, THEZIPR23 said:

I think this will dictate what will happen within the industry. Public course in my area has doubled there green fees over the last year, yes double. That can't continue as people will only pay the outrageous rates for a little while, it has already affected quite a few people I have talked to.  

Same in our area,  Many senior with fixed income are cutting back on their range session and rounds per week.  Golf is one of the few activities which keeps the senior out of the house and get their exercises.  Golf courses are eager to make up for the golf craze from the new population.  They even denied the Summer program for junior golf.  Why would they give discounted fee for the juniors while they could charge 4 times the green fees to these new golfers ?

They run the municipal golf courses like they run a,  for profit business.  

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13 minutes ago, THEZIPR23 said:

I think this will dictate what will happen within the industry. Public course in my area has doubled there green fees over the last year, yes double. That can't continue as people will only pay the outrageous rates for a little while, it has already affected quite a few people I have talked to.  

A few near me didn't double but went up $20 or so.  Add that up over a season and it gets up there.  The problem is that they're still getting the $ because tee times are scarce. 

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23 minutes ago, russtopherb said:

I was talking to the head pro at the semi-private near me a few months back. The past few years they had offered a few of those "X rounds with cart for $Y" every summer. He said they had ended that because their memberships were through the roof and it didn't make sense to offer deals when he had so many members on the tee sheet and new pending applications. 

We're a stock/equity club so, membership requires the purchase of one share of stock. Having a noticeable increase in membership applications, accompanied by a stock purchase request isn't normal. The uptick in applicants has been coming from the 18-34 demographic. That is pleasantly surprising to me considering the average age of our membership has been rising for a number of years now. We currently have approximately 375 active, dues paying members. 

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If all these talks about another national lockdown come into fruition, well, I really don't know where the golf industry will end up.  As a business, you need people to survive.

We were fortunate in my State and things were approached with common sense.  We played golf during the whole thing and membership in my club actually went up.

 

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5 minutes ago, hrfdez said:

If all these talks about another national lockdown come into fruition, well, I really don't know where the golf industry will end up.  As a business, you need people to survive.

Did I miss the first "national lockdown?"

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1 hour ago, sixcat said:

Did I miss the first "national lockdown?"

Oh please!!!! If you are going to just troll, then stay in your basement.  If you want to have an actual conversation then I'm all ears.

As a matter of fact, I'm not even going to waste my time.  It is obvious you are just a keyboard jockey.  Bye!

Thanks for reminding why I walked away from forums 10 years ago.

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