[olivier]

Short article in this week Economist

Why golf is in decline

http://www.economist.com/business/displaystory.cfm?story_id=8035922

[mike_malone]

 We played a neighboring private club the other day. I paired with our golf chair and played their incoming and outgoing golf chairs. So, the after round talk was about the dramatic decline in rounds played in the last five/ten years. For them it has been cut in half !

   We speculated on the reasons. I think we agreed that guys with children have different habits today. We felt that our fathers were less engaged with their children during their free time. And now they spend more time with them. This alone leads to a significant reduction in play.


  For a private club that means we just pay more per round for the privilege. I guess at some point this will become a problem. But the public courses need that play to stay in business.

   

[Kyle Harris]

As usual, the Economist hits the nail on the head.

I just don't see how an activity that consumes 120-250 acres of land, 5+ hours of time, and a median price of $40 per pop is going to survive.

[James Edwards]

8$ an hour isnt too bad is it?

[Kyle Harris]

8$ an hour isnt too bad is it?

James,

When one factors in the marginal utility (what else could be done during that time?) and the cost of equipment (how many balls are lost, at roughly $2.00 per ball average per round, not even counting the one time costs of clubs), the economic cost (as opposed to strict financial cost) is significantly higher.

Factor in the land use cost to the community.

Golf needs a change of vision fast.  

[Jason Mandel]

Kyle,

I thought this title has something to do with how all the PSU alumni are going to feel on the course Sunday morning  

Jason

[James Edwards]

Kyle,
I assume you were talking about the opportunity cost of golf to the golfer, and you are right that there are many alternatives to walking around outside for 5 hours at a cost of $40. However, golfers will still play golf. Thats what they do. Golf is a good game, but it's exclusive nature is harming its development currently. As demand wanes in its traditional demograhic, golf will adapt (as it is already doing through short courses, executive courses, six hole courses etc) to attract new players by reducing the aforementioned opportunity cost. This may be the new direction that you are talking about, but it does not represent a threat to the game, but an opportunity for it to reinvent itself and safeguard its future.

[Kyle Harris]

Kyle,
I assume you were talking about the opportunity cost of golf to the golfer, and you are right that there are many alternatives to walking around outside for 5 hours at a cost of $40. However, golfers will still play golf. Thats what they do. Golf is a good game, but it's exclusive nature is harming its development currently. As demand wanes in its traditional demograhic, golf will adapt (as it is already doing through short courses, executive courses, six hole courses etc) to attract new players by reducing the aforementioned opportunity cost. This may be the new direction that you are talking about, but it does not represent a threat to the game, but an opportunity for it to reinvent itself and safeguard its future.

Thanks for the correction, Micro for me was in 2002 and has since been sullied by Money and Banking classes.   Oppurtunity Cost is what I meant. (I actually sat for a minute and tried to think of the term, marginal utility is what I could come up with, but doesn't make much sense in context).

But yes, I think you're correct that golf will survive thanks to a dedicated few. Golf seems especially resilient in this regard (See: Great Depression) but I'd rather see the reinvention before the decline and not as a knee-jerk reaction.

[A.G._Crockett]

Kyle,
I assume you were talking about the opportunity cost of golf to the golfer, and you are right that there are many alternatives to walking around outside for 5 hours at a cost of $40. However, golfers will still play golf. Thats what they do. Golf is a good game, but it's exclusive nature is harming its development currently. As demand wanes in its traditional demograhic, golf will adapt (as it is already doing through short courses, executive courses, six hole courses etc) to attract new players by reducing the aforementioned opportunity cost. This may be the new direction that you are talking about, but it does not represent a threat to the game, but an opportunity for it to reinvent itself and safeguard its future.

Thanks for the correction, Micro for me was in 2002 and has since been sullied by Money and Banking classes.   Oppurtunity Cost is what I meant. (I actually sat for a minute and tried to think of the term, marginal utility is what I could come up with, but doesn't make much sense in context).

But yes, I think you're correct that golf will survive thanks to a dedicated few. Golf seems especially resilient in this regard (See: Great Depression) but I'd rather see the reinvention before the decline and not as a knee-jerk reaction.

Kyle,
Marginal utility works fine.  If you think about a young adult with a family, and an hour or two of recreation jogging or playing tennis or basketball at relatively low cost (at least compared to golf) the marginal utility of the additional hours spent for a round of golf would be low at the prices golf charges.  Many would opt for other activities because of the diminishing marginal utility of each extra hour of recreation.  (Does it show that I teach Econ.?  )

BTW, opportunity cost works fine also.

[JohnV]

Economically, playing golf doesn't make much sense.  That is one of its beauties.

Public golf looks better than private from an economic viewpoint.
Think about the guy who pays $5K a year for membership in a private course and only plays it 20 times.  $250 a round.  Makes $40 a round look pretty good to a lot of people.

If golf doesn't make sense, how does skiing survive?  More land and lift tickets cost at least as much as green fees at most courses.

[cary lichtenstein]

What I found interesting was the graph on the above link, it was bound to happen at some point in time.

I am curious to know how the new courses breakdown, public, private, private with housing, resort.

Any links for that?

[Phil Benedict]

   We speculated on the reasons. I think we agreed that guys with children have different habits today. We felt that our fathers were less engaged with their children during their free time. And now they spend more time with them. This alone leads to a significant reduction in play.
   

At my course the frequent players are mostly middle age (45 and up) or older, because the younger guys are spectating at some activity of their children.  Let's face it, the baby-boomer generation is a bunch of wimps.  My father never changed a diaper in his life!  He was from the greatest generation who won WWII and was entitled to spend Saturday with his buddies hacking up some public course.

[A.G._Crockett]

Economically, playing golf doesn't make much sense.  That is one of its beauties.

Public golf looks better than private from an economic viewpoint.
Think about the guy who pays $5K a year for membership in a private course and only plays it 20 times.  $250 a round.  Makes $40 a round look pretty good to a lot of people.

If golf doesn't make sense, how does skiing survive?  More land and lift tickets cost at least as much as green fees at most courses.

JohnV,
I'll make a couple of uneducated guesses about skiing vs. golf.

The golf courses that are closing are likely on the lower end of the spectrum of profitability vs. land value for housing.  It is not the top-end resort golf courses that are closing.  It may simply be that there are few if any comparable ski resorts to the golf courses that ARE closing, and so the closings aren't happening in the ski industry.  This may be because the alternative land uses of ski slopes do not include housing, unlike the situation in Myrtle Beach.

Also, it may be that there was never a ski "boom", and so no market shakeout is occurring as in the golf industry.

[Phil Benedict]

Skiing is much more of a family activity than golf.  It's something that young children enjoy and can do well.  As such, skiing fits very well with the trend of fathers doing more with their young children than previous generations.

[Jim Adkisson]

The cost that all are missing is the cost to warehouse us devotees in either an asylum or prison if we were not able to get away for 4 hours a few times a week...Depending on the day/week, I know that I would either go insane or kill some customer/coworker if I couldn't get out and swing the sticks.  

[Bob_Huntley]

   We speculated on the reasons. I think we agreed that guys with children have different habits today. We felt that our fathers were less engaged with their children during their free time. And now they spend more time with them. This alone leads to a significant reduction in play.
   

At my course the frequent players are mostly middle age (45 and up) or older, because the younger guys are spectating at some activity of their children.  Let's face it, the baby-boomer generation is a bunch of wimps.  My father never changed a diaper in his life!  He was from the greatest generation who won WWII and was entitled to spend Saturday with his buddies hacking up some public course.

Phil,

I think I know your Dad!

As a young father-to-be I didn't attend Lamaze lessons nor had any desire to witness the birth of my child. It just wasn't done. The medical staff wanted no part of spectators at a delivery.

Gosh, across the fields the African farmworker's wives were required to toddle off to a separate hut when they were menstruating. Different times....different expectations.

I do see that the younger generation are fantastic parents, however, I also feel that the children seem overcoddled and and regimented. Every activity seems governed by an adult, some, like a great number of Little League baseball coaches, I would not want my child to be near.

[Dan Kelly]

When one factors in the marginal utility (what else could be done during that time?) ...

It's been decades since my one and only economics course -- but I thought that was the "opportunity cost."

P.S. Guess I should have read Mr. Crockett's post first!

Mr. Crockett -- Where does Gresham's Law fit into this?

[tonyt]

8$ an hour isnt too bad is it?

It isn't the cost per hour that's the problem.

It is forcing patrons to pay $8 an hour for a minimum of 4-5 hours.

If cinema tickets tripled in price, but value was offered by each movie going for 4-5 hours, would the movies be popular? Oh yeah, and the operators would have to build screens that collectively took up 150-200 acres on each site.

[JESII]

Mr. Huntley hits another nail square on the head.

[Robert_Ball]

I also feel that the children seem overcoddled and and regimented. Every activity seems governed by an adult...

There's been research that backs up your observation, Bob. Gen Y (age 8-24) is believed to be lacking in future leaders and less concerned with individuality than past generations.  They're also very thrifty.  Seems to me that it's going to be a challenge to get them to spend their time and money on golf.

[A.G._Crockett]

When one factors in the marginal utility (what else could be done during that time?) ...

It's been decades since my one and only economics course -- but I thought that was the "opportunity cost."

P.S. Guess I should have read Mr. Crockett's post first!

Mr. Crockett -- Where does Gresham's Law fit into this?

Dan,
If Gresham's Law fits into this, I'm damned if I know how.  But that's the cool thing about Economics; there are likely mental gymnastics that can be done to make it work.

I do think, however, that you are dating yourself severely by even knowing about Gresham's Law.  Suffice it to say that it doesn't come up much these days...

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