As I am driving down I-95 in South Florida I see a course in Boca Raton off the highway that is in shambles. Closed and weeds growing everywhere. Residents of this community purchased due to the golf course views they were promised. Now as Lennar proposes to build more homes on the course their view is about to change dramatically. Every dinner I have attended over the past few months, similar stories about clubs closing their doors becomes a topic. Sadly for those property owners the communities rarely own the course. They are often sold by the developer after the community is completed.
I then read articles about how the game of golf is in a great decline. Golfsmith and other golf retailers are closing up their stores and packing it in. Golf equipment companies are merging to stay alive and some are just giving up (Nike). Sounds pretty bad hugh.
People are saying the social family dynamic has completely changed and dad is no longer going to the club on the weekends to play with the boys.
All of this has merit. But if you step back and look at the big picture it is a little more obvious. Golf was on a bubble ride since the late 90's. Real estate was grossly over developed with every community being built in Florida termed a "Luxury Golf Course Community". If you were a developer you would have done the same. Lending was loose, the markets had a good run, and plenty of people were interested from the north in buying a zero lot line slice of sunny Florida. It sure didn't hurt that you had a marketable player dominating the game fist pumping his way onto everyone's TV screens.
We all know the rest. Markets tanked, real estate bombed, and the marketable tour player fell with it. Before that all happened people were flush with some extra spending money. They were buying that new driver each year since those new drivers coming out were a big improvement. Upgrading to a nicer course was doable. Maybe even joining a private club or buying in a nice community.
1) Tee time re-sellers are questionable for courses. But great for new and starting golfers. Rates have definitely become more competitive. I grew up playing golf as a junior for under 20 dollars. It was somewhat affordable as a kid. 80 Dollar golf is not realistic for someone learning. There are more offerings again at reasonable prices which is good for the future of the game. Data shows there is a decline of new golfers over the past 5 years. Of course there is. Until greens fees become realistic most new golfers are not going to pay $90 to play. It's starting to get there.
2) Online booking of tee times is a must. No more calling shops trying to see whats available. This has made for more competition regardless of the re-seller debate. This is great for new and younger players. They have been looking for this for years.
3) There were too many golf courses built. We all know that. Some are going to close that were heavily leveraged in good times. I feel bad for people that bought lots for extra money and a golf course view. That would be hard to stomach.
4) Equipment is basically capped. You can't have a hotter driver. The golf ball is essentially maxed out. Spending money is tight for many. They are not out buying anything that's not already worn out because there is not a visible difference.
5) Junior golf in most areas is extremely busy. College golf is very competitive. I remember when you could sign up for any junior event or even AJGA events and get in. Now you have to qualify and enroll and hope to be selected. There are more junior golf tours and tournaments than ever. There are plenty of juniors trying and playing the game.
6) The economy is doing pretty well in most segments. However expenses for most people have gone up considerably. Insurance costs have become brutal. Either as an employer or a employee. Not just health but your home / auto etc have all increased substantially. Obviously other costs have increased as well. This has put a pinch on "fun money".
Where is it all headed?
Obviously it's my opinion. Some courses are going to disappear. Product sales will never increase as dramatically as they did. Online sales of tee times will lead to a more competitive environment which will lower rates on a public and resort level. This will allow some of those now junior golfers to continue to play after college and when starting families. If rates come down those junior golfers will continue to play and golf will remain stable. Some courses will also do well by differentiating themselves from typically snobby and stuffy attitudes. I've seen some offering blue-tooth speakers in their carts and other similar non traditional perks. Were headed towards the "after the bubble" cycle. Much like our real estate market is returning to a more normal environment, golf will settle in as well. It's not going to disappear. There are plenty of players like myself who just can't give up the relentless challenge this game provides. Not everyone is out for constant instant gratification.
Looking forward to a great 2017... at whatever your trying to do!
Peter S. - SCOREYOURBEST