How will the looming recession impact the golf industry?

[TBS]

Wanted to get y'all's takes on how high inflation, high CPI, supply chain issues, fertilizer price, looming recession, etc. will impact the golf industry here in the US?

I know its seen a pandemic boom but I'm curious to hear how much a recession could bring it back down. 

[BIG STU]

I think as in anywhere it is the demographics of an area. I live in a tourist and retirement area and it has not slowed down yet to some extent. Our winter tourist golf season was a boom mainly due to the Canadians being allowed once again to come down. We had a big Country Music Festival this past week and it was booming tourist wise. Now on the other hand tourism seems to be flourishing for now in general. But I think some families are taking early vacations this year before gas prices get too high. I know some dine in restaurants are saying they do not have a lot of folks. I think that is due to people after getting gas can not afford to eat out in those places. I know on the local news this morning the boating industry is somewhat suffering with boat owners putting into the water less and less due to rising gas prices. One guy I know that runs a small charter fishing service has parked both of his boats due to rising fuel and maintenance costs. Said of course he had to up his prices to stay in business and folks could not in general afford the increases

On the golf front my course is somewhat unique. We have low cost memberships and we have a strong local membership base. They do not do Motel packages but do book some on Golf Now.Com. Now we are not as pristine as some of the resort courses but we have the lowest 18 hole rates on the beach even the walk on prices. Right now we are having trouble with our greens due to the fact of the busy tourist golf season and a iffy transition season. I know some of the upscale courses have closed for the summer to re do greens etc. Our course closed last week Wed thru Sunday to aeriate both greens and fairways. They did open to play the shootout Saturday. Now they are open per say this week until noon to accomply the men's and ladies league play but are taking the afternoons to water and do further maintenance to the course. Now it will be intereresting to see what happens to the one golf group that has 19 courses. Before the pandemic they had done away with individual course memberships and aileanated most of the locals. During the pandemic they shut down 6 of their courses due to no play. Now they did open those up back in December when the boom started. What will tell the tale is how high the gas prices will get and how it affects tourism in general. The reason I drew my opinion was the week befor we closed we had an influx of family and college type tourist golfers and we were busy. I had heard some of them saying that they had taken early vacation while they could afford to and were playing at our place because of the cheaper rates. Yeah I practice some and sit on my corner of the patio resting observing and listening. Had a couple of kids ask me politely if the putting green was open because it was in such bad shape? 

[GaDawg]

I just don't see how this inflation, outrageous fuel prices and higher wages are not going to impact golf soon.  I would think that dues and rates will have to increase. My course, which has held Nationwide/Korn Ferry tournaments in the past is operating very very lean. Currently, they only have 7 employees on the golf maintenance staff. They are working very hard to maintain the best conditions possible. Last week, I provided lunch for them just trying to show some appreciation for all their hard work.

The club did start holding some outside events on Monday's in May to try and generate additional income. In speaking with the GM, they want to hold off on increasing dues if at all possible.

Just after covid, the club was able to become 100% full on memberships, which was the first time in probably 8 -10 years. Going to stay away from politics, but a lot of this could have been prevented or at least held to lower rates/prices.

[Middler]

Depends a lot on how long this lasts, though it certainly doesn't look like it will be short-lived to me.

[Kansas King]

Inflation and fuel prices are already digging into golf. Want an afternoon tee time today at a local muni in a decent sized city in south central Kansas? Not a problem anymore.

I think we're on the precipice of golf club membership being affected. I have a feeling that courses will see the pain at membership renewal time. I'm not currently a member anywhere as the private club I was a member of was bought out by a company I'm not fond of and I've had several life events over the last 18 months that have certainly slowed how much I play. So I simply have not joined anywhere. I was thinking of joining one course in my area but with everything going on, I'm not going to. The costs of everything have just gotten out of control. Between fuel, travel costs, energy, groceries, and any home related expenses, I'm just starting to feel tapped out. I will likely rejoin our local munis over private golf to save a significant chunk of change. I love private golf but I'm not going to stretch for it. I have a feeling that I'm not alone. 

[Goober]

I can only hope for the best. But if it came down to a roof over our heads and food on the table versus golf. Than sadly golf will win every time. No.. just joking… I think any courses that require an out of the way drive for many will really struggle 

[MmmmmmBuddy]

Negatively.  

Increased costs to operate will necessitate higher rates to play and increased dues for members. 

This is inevitable.

I hate it, but when you budget for the fiscal year and then the costs for fuel and fertilizer double, there has to be an increase in revenue to offset these costs. 

I am not looking forward to the 2023 budget cycle.      

[THEZIPR23]

25 minutes ago, MmmmmmBuddy said:

Negatively.  

Increased costs to operate will necessitate higher rates to play and increased dues for members. 

This is inevitable.

I hate it, but when you budget for the fiscal year and then the costs for fuel and fertilizer double, there has to be an increase in revenue to offset these costs. 

I am not looking forward to the 2023 budget cycle.      

I don't disagree, the input costs associated with growing anything have become unsustainable. From what I have seen in my area is that green fees increased with the pandemic as they did everywhere from what I assume so how much of the surplus income will be applied to the costs moving forward? Delicate question and one that probably doesn't have a straight answer, however around here there is not any room to go higher. Seems like 2023 will be on razor's edge of balancing costs with revenue. 

[edingc]

22 minutes ago, MmmmmmBuddy said:

Negatively.  

Increased costs to operate will necessitate higher rates to play and increased dues for members. 

This is inevitable.

I hate it, but when you budget for the fiscal year and then the costs for fuel and fertilizer double, there has to be an increase in revenue to offset these costs. 

I am not looking forward to the 2023 budget cycle.      

And, depending on the course, corners start to get cut. Not that I can blame them.

At my course the fairways are getting narrower (less pesticide/fertilizer). Fairways and roughs are mowed less frequently (less diesel). 

I was talking with the owner a few days ago and he strongly hinted he's about had enough. I don't know how much longer he's going to bother with it. If he sells I just hope the next owner is as good as he is, IF it even were to stay operating as a golf course and not turn into a housing development.

[MmmmmmBuddy]

4 minutes ago, THEZIPR23 said:

I don't disagree, the input costs associated with growing anything have become unsustainable. From what I have seen in my area is that green fees increased with the pandemic as they did everywhere from what I assume so how much of the surplus income will be applied to the costs moving forward? Delicate question and one that probably doesn't have a straight answer, however around here there is not any room to go higher. Seems like 2023 will be on razor's edge of balancing costs with revenue. 

I think that this is very facility dependent.  I know of several operators that took the profits from the Pandemic Surge and plowed them back into Capital Improvements and other spends that will improve the facility and golf experience for the future. 

The golf business is always up and down. the good operators will find a way to sustain during the inevitable dip, and others will not.

Golf availability is a commodity.  Price will be dictated by demand. If the price that a facility has to charge to maintain profitability is to high for the market they are in, they will be forced to close, or change the way they operate.

It is going to be a very interesting few years for the golf business.

[revkev]

1 hour ago, MmmmmmBuddy said:

Negatively.  

Increased costs to operate will necessitate higher rates to play and increased dues for members. 

This is inevitable.

I hate it, but when you budget for the fiscal year and then the costs for fuel and fertilizer double, there has to be an increase in revenue to offset these costs. 

I am not looking forward to the 2023 budget cycle.      

I apologize that I did not "like" anyone's comments because this is a sad thread.  But it's an important one.  We haven't felt the impact yet because the boom was such a boom that private clubs increased membership and raised rates so they are currently flush.  Public ones also raised greens fees.  Currently play is off but we are now out of season.  However we were jamming throughout the summer last year and we are not now - still as a private club the money comes in - we stopped seasonal memberships - you are either a member or not.  

 

The reality of it all is stated above though - if this continues into the fall it will impact the number of people who come to Florida next winter which in turn will impact membership and so on and so forth.  Our memberships start as annual but once you are a full member paying full price they become month to month.  I've already seen a change in menu at the restaurant which means increased prices.  I'd expect an increase to cart fees at some point soon also.  Eventually we will see a decrease in membership.

 

 

[KC Golf]

I believe resort public courses that rely mostly on long distance visitors in places where flights are required will suffer from this hyper inflationary environment.  Early on with the opening of travel (post COVID) these places have and continue to be booked up.  Ultra high end courses will be okay, but as the recession takes hold these mid level public resort courses will increasingly rely on a smaller number of guests and will be in a rock and a hard place of higher operating costs and dwindling rounds played. 

Given their financials haven't fully recovered from the COVID period, I believe its going to be a survival of the fittest at some point.   Hopefully the smart and nimble operators will be able to weather this since I believe the recession will be short lived.

 

[dlow206]

3 hours ago, edingc said:

At my course the fairways are getting narrower (less pesticide/fertilizer). Fairways and roughs are mowed less frequently (less diesel). 

i have experienced the same to a certain extent, but did not connect potentially why until i read this thread. i was wondering why i am all of a sudden in the past couple months hitting out of terrible lies that weren't that terrible before. like areas that were normal rough are now treacherous. 

[fixyurdivot]

Negatively for sure.  For the vast majority the belt-tightening starts with non-essential items.  Course rates are already increasing to offset prices hikes from seed to fertilizer to fuel to wages and that makes the play or pass (the round) more difficult.  The "experts" say we're not in a hyper-inflation period but I not so sure we're not that far from it .  I agree with @revkevthat it's sad.  Coming out from the pandemic, one (or at least I) wouldn't have thought we'd see this type of inflationary increase.  I hope some/all of it is not opportunistic supply/demand price manipulation... nah, that could never happen.