A Look Back at Golf in 2013
Emerging Trends in Municipal Golf
NGF 2013 Municipal Golf Survey
October 2013 Rounds Played Report
The Leaky Bucket – Attrition in Golf Participation
2012 China Golf Report Now Available
List of NGF Membership Anniversaries in Q3
Sponsored by: NGF’s App Membership
Top 5 countries (outside the U.S.) with the most golf courses in development:
Retaining Members through the Holidays
by Zack Bates
You’re invited! Join us! RSVP Early! Our Members are bombarded by invitations to club events during the holidays in addition to their regular social calendar.

Golf Club Members and Golf Club Owner Both Foiled By Contract Language
by Rob Harris
The Ohio Court of Appeals recently issued two golf related decisions that provide a cautionary tale to those who denigrate the importance of the written words to which they affix their names.
Emerging Trends in Municipal Golf

Municipal golf has played a very important historical role in the democratization of golf in the U.S. Since Van Cortlandt Park opened as the first public access course in the U.S. in 1895, municipal courses have supported the entry of millions into the game through less difficult, more accessible and more affordable golf. These facilities exposed the game to a broader cross-section of the American public at a time when most clubs were private, and ultimately became an integral part of the recreation mix in Park systems across America.

The National Golf Foundation, which has worked with hundreds of municipalities to help them improve golf operations, has witnessed the role of municipal golf evolve over the years. As activity levels at muni courses escalated from the 1970s to the 1990s, more municipalities began viewing golf as something other than just a recreational amenity to its citizens - namely, as a profitable enterprise that could contribute positively to the municipality’s General Fund. Thus, many public sector golf systems were accounted for under the Enterprise Fund structure, in which user fees were mandated to, at a minimum, pay for all expenses.

For a variety of reasons, the municipal golf sector, like others, has seen the landscape change once again since the turn of the century, resulting in a more difficult operating environment. Many municipal golf systems have been unable to meet basic operating expenses, let alone make facility improvements or transfer money to the General Fund. First, there was a dramatic increase in the supply of public golf courses in the 20+ years between 1985 and the mid 2000s (more than one-third of the nation’s current supply of public courses came on line since 1990). Secondly, the growth in the number of golfers reached a plateau just as new golf course construction was peaking at about 400 new courses a year. At the same time, most municipal golf systems experienced rapidly increasing labor expenses.

Though daily fee courses and private clubs are also struggling with today’s golf market dynamics and economic climate, municipal golf systems face some unique challenges:

  • Municipal golf facilities compete with privately owned, often high quality, daily fee golf courses that are typically more adept at yield management pricing strategies. Many municipal golf operators are not limber enough to react quickly to these and other changing market dynamics. Bureaucracy also impedes municipal operators through cumbersome policies regarding personnel changes, procurement, etc.
  • The cost of producing a round of golf at municipal golf facilities – at least those that operate with public labor - is typically higher than that of comparable, or even superior, daily fee facilities. Though this higher cost of labor is mitigated somewhat by the fact that most municipal golf courses do not pay property taxes (a source of consternation among many privately owned daily fee operators), enterprise funds generally have significant “indirect” charges that result in transfers of money to the General Fund.
  • NGF has observed through its consulting practice that an “entitlement” culture among certain customer groups (e.g., Men’s / Ladies / Senior Club members) is prevalent at many municipal golf courses, making it more difficult to maximize revenues and compete effectively. The manifestation of this culture is most evident with respect to cheap unlimited play passes, artificially low green fees for some classes of users, and preferential access to the golf course.
  • The previous point illustrates the fundamental dichotomy that NGF often observes when working with municipal golf enterprise funds – facility managers and City/County staff are held to the for-profit business standard for their golf systems, while City Hall approves or even mandates policies that treat golf more like a public accommodation (see public pools, tennis courts, soccer fields, etc.) that is supported by tax payer dollars. Our experience tells us that modifying policies that enable entitlements and/or that impede best business at municipal golf courses is, for many, not worth the expenditure of political capital.

Faced with unique challenges, as well as the market-based forces described earlier, municipal golf may be undergoing yet another evolution. NGF has observed that as golf enterprise funds are increasingly unable to meet expenses or contribute positively to the General Fund, several trends appear to be emerging. These include:

  1. Increased outsourcing of golf operations and/or course maintenance to the private sector.
  2. “Forgiveness” of large (often multi-million dollar) accumulated golf fund deficits by municipal general funds.
  3. Folding of golf operations back into the General Fund, as the cities of Phoenix, AZ and Ann Arbor, MI have done in the past year. (We often find that when conversion back to general fund accounting occurs, once-skeptical politicians rediscover the value of golf as a recreational amenity that also provides other ancillary values to the community).

Municipal facilities will continue to play an integral role in facilitating entry into the game of golf by providing accessible and affordable venues that feature non-threatening learning environments. And, it will occasionally command the nation’s attention when golf’s major championships come to venues such as Torrey Pines, Bethpage Black, and Chambers Bay.

Still, municipal golf operators will continue to have to balance financial objectives with political realities and the goal of providing a quality, affordable recreational amenity to citizens. Many operators have successfully struck this balance, while others continue to struggle. Given that much of the latent demand for golf is among user groups that have traditionally had low golf participation rates (e.g., minorities, women, lower income groups), the importance of maintaining alternatives to more expensive daily fee courses and private clubs is clear.

*As measured by the number of non-golfers that have indicated an interest in taking up the game.

Featured Report
2012 China Golf Report Now Available

Golf is growing in China, and 2012 was a good year for golf in the country.The number of golfers has grown 16% since 2011, and 38% of China’s total number of golfers are now classified as Core Golfers (those playing at least 8 rounds per year).  Rounds were also up 8%, totaling more than 11.5 million for the year. With golf still in its infancy, opportunities for growth clearly exist in the market.

Published by VCT