At this week's PGA Merchandise Show, economic lessons guide industry executives, course operators and PGA professionals toward a new reality, which will benefit the game and its players
ORLANDO, Fla. – The annual golf fest of the PGA Merchandise Show is upon us here this week: a 23-acre trade show, involving more than 1,000 exhibitors, 7,500 golf professionals and an equal number of industry consultants, tradesmen, inventors, clothiers, and golf industry wannabes.
By the casual look of things at the sprawling Orange County Convention Center, the industry would appear to have been taken over by golf simulators, launch monitors and CBD oil. But this isn’t just a showcase of goods; it’s also a meeting place for folks in the industry who think that golf should succeed as a business. There are traditionalists who scoff at the idea because they think golf should be no more than a game.
Good luck with that. The U.S. golf world comprises an $84 billion economy, according to a 2016 study by the National Golf Foundation. That’s counting everything related to the game – dues, green fees, food and beverage, equipment, payroll and taxes. Like any other business, golf has its ups and downs: its Tiger Woods-era booms and its recession-era slides. Avid golfers and fans of the PGA Tour might not concern themselves with the economics of the trade. But somewhere, deep inside the industry, there are folks comfortable with numbers, spreadsheets, flow charts, pro forma reports and the bottom line. Without them overseeing the ledgers, golf courses would go bankrupt.
That’s what makes the annual State of the Industry report so interesting. Two data geeks, Jim Koppenhaver of Pellucid Corp., and Stuart Lindsay of Edgehill Consulting, collaborate on what is now a 90-minute info fest. To be sure, most of the slides are cluttered with the kind of overloaded graphics and type fonts that give PowerPoint a bad name. But if you look closely at the data and follow the rapid-fire narratives that accompany it, you will find that there’s a treasure trove of useful information.
It looks as if 2019 will show 20.6 million golfers playing 432 million rounds. That’s holding pretty steady from 2018, though it’s a far cry from peak industry levels in 2000, when the count reached 29.8 million players. Those days are over. Rather than rue the decline, Koppenhaver and Lindsay are trying to help stabilize the golf facilities by looking more closely at the data so that course operators can make better decisions. Among them: flexible pricing, making the facility more amenable to women and minorities, encouraging entry-level golf, and making sure that course managers at public facilities capture information about customers so they can reach out to them and promote a return round or two.
For one thing, the industry is utilizing only 55 percent of capacity – measured in terms of available tee times versus actual tee-sheet bookings. In fact, during the entire golf boom of the 1990s and early 2000s, the industry was adding as many as 250-350 courses a year while upwards of 40 percent of tee times went unfilled.
Average course traffic in the U.S. peaked at 36,500 rounds in 2000 and now is at 32,300. More alarming is a general drop in the play rate over that time, from 9 percent of the U.S. population (age 7 or older) down to 7 percent.
The net loss of 815 courses since 2000 (down to 13,408 courses, measured by 18-hole equivalent) has helped rectify the imbalance of supply and demand. Better yet would be more golfers taking up the ranks. For those who look to alternative facilities such as Topgolf or Drive Shack as a remedy, Lindsay offers a cautionary note. The evidence so far of crossover is scant. It certainly has not prevented a continued, if slow, slide during the past few years in the total number of active U.S. gofers.
There’s a lot to learn from these data geeks without getting overloaded. This is, after all, a world in which golfers thrive on a plethora of data about their games – swing speed, ball velocity, launch angle, smash factor. Guile and feel can go only so far. It’s all part of the old adage that holds for business as well as swing mechanics: you can’t control it unless you can first measure it.
It should not ruin the experience of a great game for everyday golfers to learn that more needs to be done to protect and enhance their facilities. The most valuable part of golf, as it turns out, is the social aspect and the fun involved. That might well extend to promoting match play – an ideal format, argues Koppenhaver, for players of every skill level to enjoy the game while engaging socially with other golfers.
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