Golf continued its macro trend toward stabilization in 2014, in contrast with the sensational negative perceptions of the game and business portrayed by many in the mainstream media. Rather than balanced coverage of the big picture in participation and course supply, last year’s headlines promoted a “falling off a cliff” view of golf.
Sociodemographic, financial and cultural headwinds certainly persist for recreational golf, and it remains highly competitive for golf-related businesses. Golf’s pay-for-play greens fee revenues and spending on the sport will always be vulnerable to outside forces including weather and the economy, but the game remains incredibly popular and fortunate to have a deep well of interested prospects to activate. The sky is not falling on golf, despite the gloomy scenarios portrayed by multiple media outlets and some industry pundits during the past 12 months.
Positive economic indicators, stabilization in participation and rounds played, an increase in weather-adjusted utilization, and the return of private equity funding to the industry are just a few of the under-reported developments in golf that tell the current story of the industry.
Much was written about the course closures that continued in 2014, absent the acknowledgement that they remain part of a positive trend—the ongoing, natural correction in total course supply. Expect that trend to continue as we move toward a healthier balance between supply and demand.It’s important to note that closures continue to represent a very small percentage of the overall U.S. supply.
That supply correction notwithstanding, the industry saw the most active year in golf course acquisitions in recent memory. Four prominent 2014 portfolio deals involved some of the largest owner/operator groups in the country, and were backed by well-funded private equity firms. These deals not only demonstrate a bullish attitude toward golf by savvy investment groups, but are also likely to result in substantial investments in course infrastructure and amenities at facilities involved in the deals.
Despite poor weather that suppressed first-quarter play in 2014, rounds played finished the year only 1.7% behind 2013, according to the rounds played coalition (comprised of NGF, Golf Datatech, PGA of America and the NGCOA). On a positive note, average rounds per day open were up in 2014 despite a decrease in overall playable days, according to PGA PerformanceTrak. The increase in rounds played per day open is an encouraging indicator of demand and utilization.
The golfer number (participation) appears to be continuing a stabilization trend. 2014 was the fourth consecutive year at approximately 25 million golfers that played at least one round of golf in the past 12 months. The number of core golfers (eight or more rounds per year) also appears to have held steady with 2013 figures.
The golf industry has many unique segments, so one’s perspective on the year clearly would depend on the type of business they are in. Yet all things considered, 2014 may well be remembered as the year golf found its post-recession footing and turned a corner toward a future at least a little brighter than its recent past.