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 From the News Desk...Continued contraction is a necessity for golfBefore any of the 2 million or so people who work in the golf industry notice signs of better times ahead, things will have to get much worse for a select few. And service to golfer clientele could go a long way in determining which facilities survive the next several years. That was the message coming out of more than one state of the union-style discussion held during the recent PGA Merchandise Show in Orlando, Fla. Even the National Golf Foundation, which preached the build-a-course-a-day philosophy during golf’s happier days, is acknowledging there is an oversupply of courses and that a “correction” is needed during its State of the Industry Outlook held Jan. 29. “There is a much-needed correction in the market,” said NGF chief executive office Joe Beditz. “That is the implication of an overbuilt market.” That sentiment was echoed, only not as gingerly, during the seventh annual State of the Industry discussion presented jointly by Pellucid Corp. and Edgehill Consulting that same day. “You created the demand for too much supply,” Pellucid principal and industry analyst James Koppenhaver said, directing his rhetorical message toward NGF. “Now you’re saying the market is overbuilt. Which is it?” In fact, Koppenhaver and Stuart Lindsay of Edgehill Consulting showed cautious optimism for the future, predicting only "slightly" better times ahead for the industry during the next several years. What is sure to be a fourth consecutive year of negative course growth confirmed the feelings of both parties. For decades, golf zipped along in the fast lane, with nary a hint of negative growth (more closings than openings) since the end of World War II. Industry analysts, however, project that 139.5 18-hole equivalents closed in 2009 (official numbers are due soon) compared with 49.5 openings for a negative net growth of 90. If that calculation is accurate, it will mean 513 18-hole equivalents closed in the past four years, resulting in negative net growth of 159 facilities. “Now, the mantra is plow a course every three days. I’ve always been an advocate that that is a good thing. The downside is it’s happening too slowly."In contrast, the industry experienced net growth of 656 18-hole equivalents in the five years previous to the current four-year downturn. Likewise, more than 3,000 courses were built during the 1990s. Two factors have combined to cause worry. Since the end of that building boom, according to NGF research, rounds played have dropped from 518.4 million in 2000 to a projected 488.1 million in 2009, while the number of golfers (about 28 million) has remained steady, meaning people are playing a lot less golf spread over more courses. In short, just about everyone is feeling the pinch as the figures mean an average dilution of rounds played of 10 percent spread over each of the 16,000 or so 18-hole golf courses nationwide. But as Koppenhaver said, there is no such thing as an “average” golf course, and some are feeling the hurt more than others. According to NGF research, 10 percent to 15 of all daily fee and private golf courses reported being in serious financial trouble in 2009. To reach supply-demand equilibrium, NGF says the market should contract by about 10 percent (1,500) over the next 10 years. Koppenhaver believes contraction of 2 percent to 4 percent annually would lead to a stronger overall climate for the golf industry. “Now, the mantra is plow a course every three days,” Koppenhaver said. “I’ve always been an advocate that that is a good thing. The downside is it’s happening too slowly. At this pace, which is about one-half of 1 percent per year, we’ll still be 10 percent over equilibrium in 2029. That’s too slow.” Indeed, the number of rounds played has changed little over the past five years, staying between 488 million and 502 million. And while industry initiatives over the past several years have been aimed at driving more participation, their overall lack of success should be a lesson, said Koppenhaver. “We’ve heard for years that demand is elastic. Well, it’s no longer elastic, it’s inelastic,” Koppenhaver said. "The challenge today is winning the battle for the share of golfer." Embracing point-of-sale technology and improved service, rather than diluting a product through price slashing, are better strategies for long-term success, according to Koppenhaver. In research of core golfers (defined as those who play at least eight times per year) service is not a factor in choosing a golf course, but plays a key role in determining golfer satisfaction, he said. “It’s not important in picking a course, but exit polls show it is high in determining golfers’ overall enjoyment,” he said. “It’s much easier to get a customer we already have than to drag one in off the street. “We’ll never have more than 30 million golfers. We have to get more out of those that we have. If we could increase involvement and stop the loss (of golfers) we would gain a lot more than we could by chasing people who are not in the game yet.” |
In other news... Study examines spring pre-stress fertility programs Research finds no correlation between biostimulant applications before spring core cultivation and recovery. Posted: 09/02/2010 Read more » Aquatrols, TurfNet present Water Week The series of five Webinars is aimed at helping superintendents manage water and soils more efficiently. Posted: 09/01/2010 Read more » News and people briefs Registration opens soon for Irrigation Show, Briggs & Stratton elects new chairman, FMC taps new director for professional solutions division Posted: 09/01/2010 Read more » GCSAA selects firm in search for new CEO Kansas City-based company will open search process for Mark Woodward's successor in October. Posted: 08/31/2010 Read more » Water foul! Research shows that droppings from non-migratory geese on turf can result in nitrogen runoff into adjacent bodies of water. Posted: 08/26/2010 Read more » Complete news index » |
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