[Andrew Buck]

A new study shows that real median household net worth declined by 30% over the past 10 years.

John,

I clicked on your link, but simply got an error.  My first question would be, does the study also address the median household net worth over the last 20 years.  I could see the median household worth increasing 30% from 1994 - 2004 on the basis of the housing bubble, and simply returning to the norm the last 10 years since the bubble popped. 

That's not to say that we don't have a society in for a world of hurt when baby boomers retire and realize they don't have the same pensions as their parents.

[John Kirk]

Andrew,

Try this expanded link.  I think this will work.

John


http://web.stanford.edu/group/scspi/_media/working_papers/pfeffer-danziger-schoeni_wealth-levels.pdf

[Andrew Buck]

To add on to John's post, there is this WSJ story about college debt:

http://blogs.wsj.com/numbers/congatulations-to-class-of-2014-the-most-indebted-ever-1368/

It claims average debt for the class of 2014 is $33,000. Student debt has spiked dramatically over the past 10-15 years and it seems unlikely that is going to change. Obviously there are many students who graduate with much more modest debt totals, but there are lots who rack up debt in the $50K range.

Combine massive debt to go along with a decline in net worth and it isn't totally shocking that golf is cut out of the budget by many.

I think this makes to think there are many economic issues potentially facing the country and the reality that economics will hurt the golf industry in the future.  I certainly don't see the education model of providing cheap debt for all majors and all institutions to be valuable or sustainable, and I think there are plenty of economic trends at play.

The reality is, the data shows that people spend as much disposable income now as ever on entertainment.  This may be a result of both parents working, or increased debt or a million other things.  That still doesn't change the fact the MLB attendance is up 65% since 1985, or NFL attendance is up 40% since 1985, despite the fact that both sports have seen ticket prices double in inflation adjusted dollars.  

[Jud_T]

The fact of the matter is that golf is a niche market for aficionados, like hockey.  I probably spend 25-50% on golf of what I did in the boom years, but I'm a much smarter consumer now.  Not in and of itself a bad thing.  Guys like Mike Keiser, who get it, are continuing to take market share from those who don't.  While we here wring our hands over the state of the game and equipment manufacturers gnash their teeth over revising their sales guidance down, there are great things happening on the margins for those of us who care.  I fully anticipate my 15 year old son to call me in 20 years and say that he just played golf with some guys from work and now he's got the bug again.  Circle of Life sh&t.

[Mike Sweeney]

My thoughts:

It's pretty clear that the golf business, both the number of courses and the sales of golf equipment, will continue to decline.  The most desirable private golf clubs will continue to do well.  The rest is unclear, but I'd guess that good golf courses with low greens fees and low maintenance budgets will do OK, while all other golf courses will be insolvent.  Golf will experience increasing political unpopularity.  I expect 30-50% of all golf courses to be out of business within 25 years.  Sorry.  

Jeez John, this is like listening to a Jackson Brown song

I was sad to recently see that John Riley Golf, my old custom golf guys in Monterrey, closed up. They fitted me before it was trendy.

50% is way too high for course closing in the USA, imo, and I look at this as an opportunity for guys like our friend Mike Young. He was yelling about too many layers in golf, before it was trendy. Guys like Mike will figure out:

Household income/networth <30% = new operators who figure our a pricing model for >30% discount

Your post also seems to focus on the USA market. We are NOT the growth market for golf. On the Moscow tournament thread, people were picking on the number of spectators at the tournament. Reality is someone is investing in golf in Russia as there is no way they made money on that tournament.

In terms of politics, I don't know the numbers overall, but raising money from charity outings have been very good financially and spiritually from a personal perspective. While this group on GCA.com is not the outing type, charity golf outings have been a great way to raise money for mom and pop local charities. This too was probably overplayed in the go-go days but there is no sport like golf for creating different types of bonding experiences ranging from buddy trips, charity, and yes political boondoggles.



Okay, it doesn't always work  

[John Kirk]

My 30-50% guess for course closures is an opinion of what will happen in the USA.  We'll see.

I keep my pessimism, or as I see it, objective analysis, partially hidden from public discussion, but I called the end of the golf course boom in 2007 accurately.

Let's choose Bob Dylan instead.  Because I've been thinking about the Ballad Of A Thin Man lately, and the oft-mailgned concept of peak bullshit.

"Because something is happening here, but you don't know what it is, do you, Mr. Jones?"

[Josh Tarble]

Many of the posts assume that golf is consumed rather than played.  That's consistent with Mike Keiser coining the term "retail golfer."  Consumers value products based upon two factors:  cost and the benefit.  In that event golf is simply a losing proposition in today's world.  I don't believe it can be fixed.  So what - golf is not required for an abundant life.

We in the treehouse see it differently since we love the game - stated otherwise it's priceless.   We learned the game in an era where consumerism had not yet hit full stride.  

We're very fortunate.  

Mike  

I wanted to call this out, because this may be the best post in the entire thread.  Golf will never be a good investment and only the people that truly love the game are going to be willing to spend money on it.  Regardless of age - but especially those with less disposable income.

I think it would behoove the entire industry to remember that at times.

[BCowan]

Another major hurdle besides the tax exempt issue-  in the UK, folks know how to play in 4 hours.  Full tee sheets on this side of the pond means 5 hours.  I can get that at any public course.

''Full tee sheets on this side of the pond means 5 hours.''

Totally disagree with this statement.  The beauty of Golf Clubs is members are more likely to self police others.  They are more hard core golfers and hence move with a purpose playing 4 hours or less.  Your Social golfers tend to join a CC that is conveniently close to their house, loves the social functions, and plays less rounds. 

[Sean_A]

Many of the posts assume that golf is consumed rather than played.  That's consistent with Mike Keiser coining the term "retail golfer."  Consumers value products based upon two factors:  cost and the benefit.  In that event golf is simply a losing proposition in today's world.  I don't believe it can be fixed.  So what - golf is not required for an abundant life.

We in the treehouse see it differently since we love the game - stated otherwise it's priceless.   We learned the game in an era where consumerism had not yet hit full stride.  

We're very fortunate.  

Mike  

I wanted to call this out, because this may be the best post in the entire thread.  Golf will never be a good investment and only the people that truly love the game are going to be willing to spend money on it.  Regardless of age - but especially those with less disposable income.

I think it would behoove the entire industry to remember that at times.

Josh

I think you and Bogey are right, golf is a consumer product that is rented/bought just like anything else.  Most golfers would baulk at paying $200 or even $100 a game.  Many in the Treehouse don't even consider cost when talking about golf and where to play.  Its a different world when a guy is hooked, obsessed and in love with the game...so long as he has means. 

Ciao

[Colin Macqueen]

Sean,

You write  "Many in the Treehouse don't even consider cost when talking about golf and where to play.  Its a different world when a guy is hooked, obsessed and in love with the game...so long as he has means."

I would love to know how true this is.  So as an example I am willing to give up a few personal details and I wonder if any others will follow suit and give an idea of what members of this group are repaired to fork out for the "gemme'.

So my joining fee was $7500 and I've been a member for ten years at this club. My annual fee is $3200. By the time I pay for the competition rounds ($7 a game, 100 games a year), pay for my locker and bag storage, golf balls and buy a round after the game I guess that's another $1200. The odd members social shindig/night, Poet's Corner and meals at the club would set me back another $500. Away games in Melbourne, and the coast here in Brisbane about $300. This rounds out at $5950 so lets call it $6000. I probably have another 50 games a year at the Club which costs me nothing.

I am "hooked, obsessed and in love with the game" and it costs me $40 a game. As a percentage of my after tax income this $6000 represents about 12.5%. I reckon my break-even point would be 25% but then I don't have certain (any?!) responsibilities. Now I don't have many overheads … kids away, no mortgage, am retired and have nae vices ( a wee bit o' malt from time to time)!

I can understand if others do not want to divulge the percentage of after tax cost but an honest costing per game would be interesting methinks.  I also recognise that this forum is a particularly strange niche but within this group it would still be interesting.The Aussie dollar is as close as doesn't matter for this purpose.

Any takers?

Cheers Colin

[Rob Curtiss]

Sorry to post this in 2 places-
But I think Golf needs more Bunker Hills- a nice 9 hole course in Colorado.

I mean it encouranges walking- its an easy walk- but has carts-has some nice design- the fairways ran pretty quick for how green they were- the greens rolled perfect- it has some short holes and some longer holes so you can use a bunch of different clubs depending how good you are - seems like a course that a good golfer and/ or a beginner could play.

Pace of play for 18 holes - 2 hrs 20 mins walking.

Get this - I paid 18 bucks for the first nine - added additional 11 bucks for back nine, 2 waters and a snickers.
And the money goes to local veterens.
Oh - and friendly service- what a concept!

There is no time issue and no real money issue here either.

[Brent Hutto]

Colin,

I won't try to come up with a detailed accounting of various expenses arising from golf-at-my-club but I'll say a ballpark figure of $5,000 per year for the stuff that actually shows up on my monthly bill is pretty close. At least over the past couple years. And I play almost just over 100 full rounds per year there, plus another half dozen or so nine-hole visits. So maybe $48-$49 per round on average.

I also play another 20 rounds or so per year either at other local courses or out of town. They probably average quite a bit more per round because a few of them are high-$$$ visitor fees at UK clubs or high-$$$ resort rounds in USA. So I'd guess once those away rounds are factored in my total expenditures are considerably higher and somewhere in the ballpark of you percentage-of-income numbers, give or take a few percentage points.

[Tim Gavrich]

I agree with the notion that my fellow millennials are going to gravitate toward golf later in live. I also agree with the statement that the number of golf courses is going to shrink (but I'm not sure about 30-50%), which hopefully means that the "reset" that develops from now to about 2030 will leave a higher-quality and more efficiently-run corps of courses.

Until then, here's hoping that lots of private clubs will be pragmatic and offer appropriately discounted "Young Executive" memberships to those of us in our 20s and 30s who play golf now and hope to continue. Even if it means annoying some of the blue hairs, it would seem to be in a lot of clubs' interests to just get younger members in the door and prove to them that, down the road, when membership becomes more expensive due to age, it's going to be worth shelling out for. There's also the added theoretical incentive on the young member to make sure he/she does well enough in his/her career to be able to be a member later in life.

I'd be interested to see the average ages of a representative set of private clubs across the geographical and prestige spectrum. How many clubs will see 25% of their members pass away in the next, say, 20 years? Are those clubs doing enough to set up a good pipeline for replacement of those members?

[Bill_McBride]

Sean,

You write  "Many in the Treehouse don't even consider cost when talking about golf and where to play.  Its a different world when a guy is hooked, obsessed and in love with the game...so long as he has means."

I would love to know how true this is.  So as an example I am willing to give up a few personal details and I wonder if any others will follow suit and give an idea of what members of this group are repaired to fork out for the "gemme'.

So my joining fee was $7500 and I've been a member for ten years at this club. My annual fee is $3200. By the time I pay for the competition rounds ($7 a game, 100 games a year), pay for my locker and bag storage, golf balls and buy a round after the game I guess that's another $1200. The odd members social shindig/night, Poet's Corner and meals at the club would set me back another $500. Away games in Melbourne, and the coast here in Brisbane about $300. This rounds out at $5950 so lets call it $6000. I probably have another 50 games a year at the Club which costs me nothing.

I am "hooked, obsessed and in love with the game" and it costs me $40 a game. As a percentage of my after tax income this $6000 represents about 12.5%. I reckon my break-even point would be 25% but then I don't have certain (any?!) responsibilities. Now I don't have many overheads … kids away, no mortgage, am retired and have nae vices ( a wee bit o' malt from time to time)!

I can understand if others do not want to divulge the percentage of after tax cost but an honest costing per game would be interesting methinks.  I also recognise that this forum is a particularly strange niche but within this group it would still be interesting.The Aussie dollar is as close as doesn't matter for this purpose.

Any takers?

Cheers Colin

I'll share.  My monthly dues are $375 including tax but there are many fixed add ons.  One of my mates spends 4 months each summer at Lake Tahoe.  His monthly bill when he's out of town is $650.   

I've haven't been playing much at home due to ennui followed by a knee injury.  Luckily my lovely wife plays 3-4 times a week!

Golf at American private clubs is not inexpensive. 

[Michael Goldstein]

Some interesting stats from home:

- There are approximately 110,000 [A] registered golfers.
- 416,000 people play golf at least once per year.  Of these, just over half (213,000 ) play once a month.

Of the casual players (i.e., at least the difference between A and B) 53% of them are aged between 25 - 44. 

 

 

[Craig Sweet]

100 rounds played per year??   Seriously?  Well, those retired MIGHT play nearly everyday, but a Millennial trying to get established in the work world, start a family, and buy a first home, is NOT going to play 100 rounds per season.  If any of you are looking at what is happening in the golf biz world, and reaching conclusions about its future, through the eyes of someone with time and money to play 100-150 rounds per year you are totally missing the boat.

A couple of things....Millennials are not the club "joining" type...Millennials like golf, but they also like music, craft beers, their family and family outings...in other words....golf does not consume them so they are not going to consume golf.  And being a member of anything, other than maybe a Neighborhood Watch group or the PTA, is not their thing. 

The reality is this...Golf has had several "hay days" and the most recent one brought a lot of course construction along with McMansions lining the fairways....that model is not what it was and won't be that way again anytime soon.  It's not just the Millennials that have been lost....I'm in the camp that says golf will further diminish to the point where it is a little "niche" sport.

[Mike_Young]

Why the millennials.....I would bet almost none of us played more from 22 to 30 or 35 than we did before or after.  The private club model will be forced to change because of them but it also changed because of my generation. 

[BCowan]

Why the millennials.....I would bet almost none of us played more from 22 to 30 or 35 than we did before or after.  The private club model will be forced to change because of them but it also changed because of my generation. 

Thanks Mike for being one of the few that actually get it.  You are the under appreciated golf course owner who keeps the backbone of American Golf going.  Being pissed that i was born two generations too late and stuck in the Millennial category, I laugh what others write on this subject.  Private Golf is missing out on the 40-55 year old crowd.  Avg Club age seems to be getting in the 60+ area at a lot of clubs.  Retail golf is helped greatly (imho) due to many being turned off by the Private club model (exclusivity and waste)

[Jud_T]

Name 3 people who can easily afford it but chose to remain public golfers primarily because of exclusivity and waste.

[BCowan]

Name 3 people who can easily afford it but chose to remain public golfers primarily because of exclusivity and waste.

I would never name 3 people on a public site.    Have a great day Jud. 

[Brent Hutto]

A couple of things....Millennials are not the club "joining" type...Millennials like golf, but they also like music, craft beers, their family and family outings...in other words....golf does not consume them so they are not going to consume golf.  And being a member of anything, other than maybe a Neighborhood Watch group or the PTA, is not their thing. 

I guess I need to stay out of the discussion until someone tells me what "golf" is in the phrase "How Golf Lost the Millenials".

"Golf" is not $400/month private clubs.

"Golf" is not Taylor Made meeting its quarterly revenue targets.

"Golf" is not the survival of caddie programs.

"Golf" is not the Bandon Resort.

"Golf" is simply hitting a golf ball with a golf club while traversing a golf course. There have never been 20-year-olds joining high-$$$ private clubs in any great numbers. Or attending high-$$$ resorts frequently. So what are we talking about here?

My point in discussing my 100+ rounds per year at my $400/month private club is that expensive private club memberships can be perfectly sensible IF you play golf 8-10 times a month. Given that very few "Millenials" are going to be looking to play that much golf during their childbearing years (the next decade or two) then high-$$$ private clubs haven't "lost" them, they never would have had them in the first place.

To me the only meaningful question would whether the "Millenials" will be first generation among the last half-dozen or so which does not play the game in significant numbers once they are middle-aged and older. If they arrive at age 50 and still have no interest in playing golf, then indeed "golf" has lost them. If they're just away attending school, starting careers and having soccer-playing sproglets for the next 20 years then nothing has been lost.

[Josh Tarble]

A couple of things....Millennials are not the club "joining" type...Millennials like golf, but they also like music, craft beers, their family and family outings...in other words....golf does not consume them so they are not going to consume golf.  And being a member of anything, other than maybe a Neighborhood Watch group or the PTA, is not their thing. 

I guess I need to stay out of the discussion until someone tells me what "golf" is in the phrase "How Golf Lost the Millenials".

"Golf" is not $400/month private clubs.

"Golf" is not Taylor Made meeting its quarterly revenue targets.

"Golf" is not the survival of caddie programs.

"Golf" is not the Bandon Resort.

"Golf" is simply hitting a golf ball with a golf club while traversing a golf course. There have never been 20-year-olds joining high-$$$ private clubs in any great numbers. Or attending high-$$$ resorts frequently. So what are we talking about here?

"Golf" is blaming millenials for all problems, because its easier than actually finding a solution 

[Brent Hutto]

Or waiting for the solution to sort itself out.

It is entirely plausible in my opinion that some percentage (10? 20? 30?) of currently extant courses go under during the next decade or two. And that a couple of higher profile golf equipment companies crash and burn spectacularly (Callaway? Others?). And that the number of "Millenials" playing the game is not sufficient to replace the golfers who will die off between now and when the "Millenials" turn 40. And yes, it's plausible that no great number of new golf courses will be built in USA during that period. Alas.

If that happens, I have to think the most likely result looks a lot like "golf" as it was when I took up the game in the early 1990's. Which did not seem such a bad thing to me at the time, obviously, as I was attracted enough to become a golf obsessive. And I have to purely selfish here and admit that twenty years ago my current club-home was a relatively much more expensive proposition than it is nowadays. There's probably no way I could have belonged to such an excellent club or been playing such an excellent course 100 times a year if the golf boom had continued unabated. We'd be asking $10,000 initiations, have a waiting list and the dues would be half again what they are now. All of which would mean me still playing at semi-private courses of half the quality.

So the crash is not an unalloyed disaster as long as one doesn't expect to make his or her living from the industry...

[Josh Bills]

I would have to agree with Mike Y on his state about the millennials. "Why the millennials.....I would bet almost none of us played more from 22 to 30 or 35 than we did before or after."  I personally would not have joined a club had there not been a serious reduction in any initiation at my club and never considered joining a club until I was more established in my job, I am 40 and thus not a millennial.  I don't think the millennials are truly lost, just not in a position in life to partake in golf on a consistent basis.  My own friends who laughed at my playing golf in high school are now 40+ and play golf regularly, though would never have done so in their 20s or even 30s.  Golf is never going to overtake football, basketball,  soccer or name the streamline sport in your area, as the sport of young people.  For one thing most school teams only have 5 varsity golfers, hardly an inclusive sport like others.  However, as people lose the ability to play football, etc., they often turn to golf.  There are exceptions like most people on this DG as most have enjoyed golf their whole life.  IMO the Millennials are not lost, most are just not ripe for golf yet.  What does this mean for the golf industry, likley that as with ever generation there will be golfers once they have more time, money, friends who are playing and have lost the ability to partake in other orgznied sports. 

[Jason Thurman]

The problem with the article is that its "facts" are so questionably sourced and poorly stated. It cites a decline in play among Millenials. As some have noted, that decline probably makes sense if it's comparing Millenial participation from 10 years ago (when many were teenagers without responsibilities) to Millenial participation today (when many have jobs, children, and bills that keep them off the course). If that's the decline it's referencing, then it's no big deal. However, if the decline is actually in number of players between the ages of 25 and 40, year over year, and if play among that group has comprised 50% of the total decline in golfers, then it's a huge deal. If participation in golf historically shrinks among people between 25 and 40, but grows among people after the age of 40, then the number of golfers in each age group should be pretty consistent from year to year. If there has actually been a precipitous year over year drop among players from age 25-40, then that's a big problem for the game that would signal that younger people are not interested in the game in the same way that they have been historically.

It would be great if we had data showing the historic growth of the game among players in different age ranges that could validate and help make sense of some of the numbers and anecdotal observations being thrown around. For instance, do people really flock to the game as they reach their late 30s/early 40s? What age range comprises the bulk of golfers? What percentage of golfers are comprised by people between the ages of 25 and 40 historically, and how does that number compare to the current number?

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