Golf Club Atlas
GolfClubAtlas.com => Golf Course Architecture Discussion Group => Topic started by: Mike_Young on December 30, 2015, 06:01:34 PM
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Interesting question...The Pellucid report today asked the following and wrote the following:
Golf Industry's Big Short:
How Will it Play Out?
"Call me a sucker for Michael Lewis' take on the financial markets, baseball etc. but after seeing the movie "The Big Short" and reading the book, the characters who are trying to fight their way through the never-ending haze of confusion and misdirection in each story just resonate with me and remind me of the 15 years now I've spent in the golf industry trying to figure out, "What the hell is really going on at the most basic and fundamental level?"
Fortunately for those of us trying to make our living in this industry, there isn't any "big short" of the magnitude of the housing market mortgage loans manipulation between '05 and '08 portrayed in the book and movie, but we continue to be in desperate need of simple, clear thinking on the path forward for the industry in the face of declining participation and rounds that are simply following weather patterns against the backdrop of latent oversupply that's being absorbed at a glacial pace.
As I complete my 13th year of chronicling the information fundamentals of the golf industry (that's ~227 newsletters at an average of 7 pages each or over 1,500 pages of the written word trying to figure out this puzzle and enlighten subscribers/readers), we certainly have more information than we did back in 2002 but the "industry narrative" remains remarkably the same. In this issue I'll draw some parallels to themes from The Big Short and outline how we might find our way out of this maze quicker and with better clarity by learning from the financial markets' mistakes:
There is a finite level of demand for golf, building real estate around golf supply doesn't increase that finite level of demand
There is a segmentation of that demand across accessibility (private vs. public), value points (Public Premium, Value and Price) and experience types (Regulation vs. Learning & Practice) which needs to be heeded
Losing low-involvement golfers today masks the eventual rounds demand day of reckoning as our core golfers "age out" of the system and when it will take multiple new or existing golfers to replace their rounds contribution
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The golf version might be a bit boring. I doubt the AHA moment would involve multiple hookers joining numerous nice clubs because THEY were being solicited.
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The golf version might be a bit boring. I doubt the AHA moment would involve multiple hookers joining numerous nice clubs because THEY were being solicited.
You never know....
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Losing low-involvement golfers today masks the eventual rounds demand day of reckoning as our core golfers "age out" of the system and when it will take multiple new or existing golfers to replace their rounds contribution
Instead are Core Golfers leaving the game due to low-involvement types frustrating them? Are Yo Yo's making core golfers find another hobby?
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No Ben, I don't think so.
But when that active golfer eventually leaves the game and the low involvement golfer has to take up the slack it will take several. If a club is now around the average age of 59-61 and is not attracting 30 year old golfers there will be a huge problem in 10-15 years.
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Mike,
When was the last time the game attracted a large swath of 30 year olds? The 'Tiger' boom? I am 43 and was knee deep in the game at the time, not having taken up the game until I was 21 (1993). By 97', I recall a bunch of backwards-hat-wearing beer chuggers with metallic thingies on their belts with abhorrent etiquette, swinging for the fences it seemed on nearly every shot. I know new golf courses builds exploded during this time, but I swear after a couple of years, the kids left.
I may be on Pluto here, but at least in the club world, memberships for under 35's are incredibly expensive. I remember when I first joined a club it was largely based on cost-per-round, not the things I look for today. I am assuming, since you write a newsletter, you own or manage a private club? With golfnow, nice publics that used to be $50 are now half that at selected times. Clubs want to attract the elusive family of 4, 35-40 years old, but a guy working with two kids can't get his cost-per-rounds at a decent price because he simply doesn't have the time to play 4 days per week. So should his membership be severely discounted to say $200 vs. a resident/full adult @ $500, so he gets used to paying dues? That seems to be the answer in my neck of the woods on a micro level, but as it relates to the larger issue, I'm shocked by the courses that seem to hang on?
As you pointed out, supply greatly exceeds demand. I have talked to those that 'manage' that through weekly memberships, restricted play at certain times (ala gyms) based on their price point...but attracting younger folks to the game still seems to be an issue? I can't tell you the number of club newsletter I read where the Tennis pro has programs and instruction galore (often a full page), but the golf pro has virtually nothing at 3-4x the price?
Maybe you can shine more light on your own experiences? I think the topic is an important one.
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Who is the average golfer?? I am at a loss to define that person. Help!
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Joe,
To clarify, I did not write the topic...I posted it from Pellucid newsletter I receive each month...
All I can say is that estimates are golf will stop falling when we reach the 20 million participation rate. If we don't have the 30 year olds getting into the game it will eventually become smaller and smaller....for a club to have an average age of 60 and try to lower it to 50 is a huge if not impossible undertaking.
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Well Mike I kinda fit in the category of potential member in their mid 30's. I'm a hard core golfer, hard core traditionalist yet anti-establishment at the same time ;) . If I were a member of a club, I wouldn't want to lower the standards of a club by taking in backward hat wearing un-tucked shirt wearing idiots. I agree that once a club reaches an average age of 61, It might be near the end. I don't see any clubs trying to attract the Individual golfer, just the family. It would be nice to scale back other operations and salaries and focus on GOLF. I think you might have more younger prospects. However the older hard core golfers have money and Golf is turning them away. My parents as an example of core golfers just sent in a year of absence to their club after being there 40 years. Both the club i grew up at and the quasi-private one I play at now both have lots of youth playing and practicing. It spontaneously happens, golf is desired by a niche amount of kids and adults. The guy who's kids and wife don't play golf, he is the one who gets overlooked. He does do cost per round analysis now and can't justify it with saving for overpriced tuition and nice family vacations. He may only play 20 rounds, but would probably join for half the dues of the family that uses the facilities all the time. He probably isn't in that category of having to play Sat and Sun from first time-10AM, which everyone assumes and fusses over. What advising companies preach scaling back? You can't be progressive and scale back at the same time ::) ::) *** There's no Money in scaling Back***
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Ben how is golf turning 'them' away?
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Joe,
Trying to define ''them''
Your Mid 30's guy has a mortgage and college loans and if his family doesn't play Golf he doesn't want to pay $400-$500 a month dues, more today can't justify it. Plus the Country Club with white tablecloths, fine dinning, and fu fu food are more of a turn off with 30 year olds. Unfortunately these lads don't understand the customs of having a beer and burger after a round is an unwritten rule, their wives wear the pants. This is a reality and forcing someone to eat somewhere they don't want to doesn't bring in new blood.
Then your possible 50 year old potential member loves golf, respects the ethos, has watched caddie shack in the movie theater (jealous), has 2 kids in college, and a wife or ex-wife. He would love to play golf and have that fellowship or a nice golf course to sneak in 9. He can't justify the $500 a month being the only golfer. He's torn between just going on buddy trips with friends or playing in beer leagues so he's not considered the ''Country Cluber'' to his friends. He would most likely join as an individual member fee even if he knows he can only play 20 rounds, they are quality rounds.
Growing staff of door greeters and Managers that don't wear multiple hats but grow the budget through job specialization and fancy titles are too prevalent IMO and diverting money spent on drainage, bunker Maint, tree maint and other course maint items.
As for people who have been long time members of clubs, they have just heard the sales pitch too often and have watched sheep herded too many times. When you do surveys and bunker renovations show up #1 year in year out and you spend money on other items you get camels with broken backs.
I'm lucky to play a place that does 30,000 rounds a year with 750 individual members and a waiting list. They also don't have a kitchen that serves food, just a turn shack. Thankfully they turned down the option to build a big clubhouse to host the Buick Classic PGA stop which could have ruined the culture.
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If Mr. Trump is elected President, America will become great again, and golf will return to its rightful place as the ultimate in aspirational recreation. It'll be yuuuuuge, I tellya, yuuuge.
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Comparing golf's current economics with the "Big Short" housing bubble, fueled by a demand in mortgage-backed securities, is not a very good comparison.
The people invest a certain amount of discretionary money in golf, and it appears that amount has been gradually decreasing. I don't expect a catastrophic event, but rather a gradual contraction of the game's importance, and the number of playing fields.
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The problem with attracting the 30 year olds to clubs is that few have the disposable income for it. Look at the pay TV industry, they are very concerned about the aging of their subscriber base, since the millennials are not subscribing to traditional cable/satellite packages like their parents did. They've done surveys and while some of it is "don't have time for TV" or whatever, most of it is that they consider it too expensive.
They have expenses their parents never did at their age - such as much higher student loan debt, as well as internet and cellular service. If they think having ESPN costs too much, what hope does a club have of convincing them to join?
Sure, they can offer discounts, but what are the 50 year olds going to think about 30 year olds paying half what they do? If the deal expires once they reach 40 and a group of 40 year olds approach the club president and say "we would like to remain members, but not at the higher rate" do they extend it until they are 45? That lower rate for younger members may become the permanent new rate of the club, and they won't survive once enough older members paying more have died off (or quit because they felt they were unfairly subsidizing younger members)
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Comparing golf's current economics with the "Big Short" housing bubble, fueled by a demand in mortgage-backed securities, is not a very good comparison.
The people invest a certain amount of discretionary money in golf, and it appears that amount has been gradually decreasing. I don't expect a catastrophic event, but rather a gradual contraction of the game's importance, and the number of playing fields.
John,
I think in someways it is very similar when you look at the gmaes played in purchasing these large groups of companies by some of the larger management companies with Wall St money. Lot of paper games played....and some of these equipment manufacturers who could almost stop production for a year and have product ot sell....there's some stuff out there....
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It's a tough slog selling memberships but we have had some success by having a bunch of disparate Groups that play regularly . Our members know there is a game that doesn't require them to organize , just call an hour before and show up . It has bred some good competition and some growth .
We have a fairly low annual dues ( under 5k yearly) with weekly memberships that are discounted. Our golf course is good and mood is low key and fun not snooty . Our location is really exceptional which might be the biggest reason for success.
But it's hard work and often a tricky read , gotta stay focused .
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The problem with attracting the 30 year olds to clubs is that few have the disposable income for it. Look at the pay TV industry, they are very concerned about the aging of their subscriber base, since the millennials are not subscribing to traditional cable/satellite packages like their parents did. They've done surveys and while some of it is "don't have time for TV" or whatever, most of it is that they consider it too expensive.
They have expenses their parents never did at their age - such as much higher student loan debt, as well as internet and cellular service. If they think having ESPN costs too much, what hope does a club have of convincing them to join?
Sure, they can offer discounts, but what are the 50 year olds going to think about 30 year olds paying half what they do? If the deal expires once they reach 40 and a group of 40 year olds approach the club president and say "we would like to remain members, but not at the higher rate" do they extend it until they are 45? That lower rate for younger members may become the permanent new rate of the club, and they won't survive once enough older members paying more have died off (or quit because they felt they were unfairly subsidizing younger members)
I have friends that have their memberships in their wives names due to her being younger, when their dues double they are gone. Their wives have no interest in using the club's facilities. Hence I said the Individual membership model. Why should a guy who's wife doesn't play golf pay the same as a guy's who's wife is an avid golfer playing 50 rounds a year? Individual memberships at $250 and family at $500. Family membership wife gets to vote and single gets to vote. NO progressive age structure membership with voting rights which 99% of clubs have. Younger members would like a vote. The more TRUE individual memberships offered the larger the pool of potential members. The days of people who don't even play golf subsidizing it by joining just to join are gone.
Mike,
I think there are a lot of parallels with Golf and the Big Short. Housing prices are going up due to Fed action and causing people's discretionary money to be diverted to mortgage payments. I'm glad that the movie mentioned Greenspan and Fannie Mae a few times, but overall it was to dis Capitalism wrongfully.
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Comparing golf's current economics with the "Big Short" housing bubble, fueled by a demand in mortgage-backed securities, is not a very good comparison.
The people invest a certain amount of discretionary money in golf, and it appears that amount has been gradually decreasing. I don't expect a catastrophic event, but rather a gradual contraction of the game's importance, and the number of playing fields.
John,
I think in someways it is very similar when you look at the gmaes played in purchasing these large groups of companies by some of the larger management companies with Wall St money. Lot of paper games played....and some of these equipment manufacturers who could almost stop production for a year and have product ot sell....there's some stuff out there....
Mike:
There are a lot of golf companies in trouble. But, it won't be like the housing bubble unless people start borrowing money so they can join a club, and I don't think there are many banks lending for that right now ...
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Sure, they can offer discounts, but what are the 50 year olds going to think about 30 year olds paying half what they do? If the deal expires once they reach 40 and a group of 40 year olds approach the club president and say "we would like to remain members, but not at the higher rate" do they extend it until they are 45? That lower rate for younger members may become the permanent new rate of the club, and they won't survive once enough older members paying more have died off (or quit because they felt they were unfairly subsidizing younger members)
Doug:
The truth is that the people those clubs are trying to attract have less time to play than the older members, and can't justify the same price. You either give them a discount, or they don't join and your club dies off.
When they get to 40, there will be fewer older members who are taking advantage of the current system, so the price will stay down and the solution will be to have more members per club.
U.S. private clubs charge higher dues than anywhere else in the world, because they have fewer members per club. That was true even when clubs were full at 300 or 350 members: it's impossible to make the numbers work with 180 or 200 members, as many clubs are trying to do now. We're going to have to become more like Australian or U.K. clubs, with larger memberships and smaller dues that correspond to the number of rounds people actually have time to play.
All that means there are too many private golf clubs in the U.S. now, and probably still too many golf courses in general.
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Mike,
I think we had our mini version of it. I recall golf architects and builders enthusiastically saying "college golf courses are the next big market." Then it was China, but before it was real estate. Now, I guess its conversions to fun, 9 hole courses for the Millennials.
As if us needing to build more courses would actually drive demand, a la the NGF mantra of the mid 80's when you and I first went into biz for ourselves. Lack of courses is holding back demand, yeah, that's the ticket!
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All that means there are too many private golf clubs in the U.S. now, and probably still too many golf courses in general.
Tom,
that's about as simple as you can put it but the industry will not accept that and continues to come up with growth concepts and other ideas but in the end we just have to wait for population to catch up. We don't want to hear it but we all know that is the problem. And the housing issue was the same way. People knew there would be a day of reckoning but would not acknowledge.
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Private golf clubs are always going to have an uphill battle trying to attract guys who are already married with kids (e.g. guys in their 30s to early 40s) for lots of reasons that have been mentioned in this and other threads.
In order to preserve themselves long-term, I think private clubs should court more aggressively people who are my age (26) and even slightly younger, in order to get that membership to become part of their lives before all the financial trappings of marriage and children enter the picture in earnest. But in the research I've done, clubs expect a 25 year old to be able to afford the same amount of dues as a 39 year old or even a 49 year old in some cases, which makes little sense to me.
The problem, of course, is that in order to get a substantial group of <30 year olds to join, the dues would have to be priced so aggressively that the >65 year old members would probably cry "socialism!" and bolt, which of course forsakes the forest for the trees.
Have private clubs ever had a membership drive aimed at younger folks where only after a certain number (say, 4-8) agreed to become members that their membership was granted? That might mobilize a particular prospective member to work on his golf buddies to join as well.
The hope would be that those new guys would form their own nucleus within the club, eventually recruit other new members and ultimately end up never wanting to leave the club and, once they get married and have kids, working hard to justify the gradually increasing dues as they get older and more established in their careers.
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My favorite story from the housing bubble:
http://piggington.com/strawberry_picker_buys_720_000_house_on_15_000_yr_income (http://piggington.com/strawberry_picker_buys_720_000_house_on_15_000_yr_income)
The only thing the two bubbles (arguably there is no golf bubble - only a mature and functionally obsolete industry) have in common is this: Neither home ownership nor golf is the American Dream. I, for one, believe the Millenials deserve credit for figuring that out.
I read the Housing Bubble Blog daily for a couple of years during the debacle. Unbelievable.
Mike
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I think a similarity between the two is the belief and action based on one truly flawed assumption each;
Housing prices will always go up and,
We need one new course a day to keep up with demand.
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I think a lot of the comments about millenials are right on the money.
Not only do most of them have zero financial wherewithal to join a club, and likely never will, I doubt many have interest even if they could.
This young generation is very anti-establishment, justifiably so, because the establishment has left them on the outside looking in. Saddled with massive college loans which is further compounded by low paying jobs waiting for them when they graduate, their current future is so bleak that they can't even see themselves being home-owners much less owning a golf membership.
The privates are going to have to figure out something quick....
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I think a lot of the comments about millenials are right on the money.
Not only do most of them have zero financial wherewithal to join a club, and likely never will, I doubt many have interest even if they could.
This young generation is very anti-establishment, justifiably so, because the establishment has left them on the outside looking in. Saddled with massive college loans which is further compounded by low paying jobs waiting for them when they graduate, their current future is so bleak that they can't even see themselves being home-owners much less owning a golf membership.
The privates are going to have to figure out something quick....
They could afford the club life, at the expense of giving up ancient grains, $12/ pound pea pods and eggs that come from free range, generally content chickens.....but everyone has choices.
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To attract me, a club would:
- Be entirely private
- Have a group of members with whom I'd enjoy playing
- Be focused entirely on quality golf (course design, maintenance, operation)
- Avoid spending on non-golf (tennis, pool, health club, kids entertainment)
- Limit food service to a good after-round pub and have no spending requirement
- Have no initiation fee (lost if I move, the club is sold, goes Chap-11, or loses quality)
- Have dues that is no more than 2X what I would pay elsewhere on a cost-per-round basis
Members can wear their hats backwards, play music, wear jeans or whatever they want, peck at smart-phones, pierce and tattoo whatever body parts that they want, and ride hover-boards. As long as they play fast and take care of the course, they're welcome.
Unfortunately, this eliminates pretty much all of the clubs in my area and seems counter to growth strategies that I've seen with clubs adding non-golf amenities trying to be “family friendly”. Adding gimmicks like foot golf or huge holes falls into this camp.
It gets to the question of “What business in the club in?”. If it's “Golf” that leads one way. If it's “Family Entertainment” that's entirely another (TopGolf?). Both can probably be successful, but trying to do both seems a bad approach to me.
There seems to perhaps be a 3rd - “Golf/Social” which cover what clubs historically have been. I'm not sure trying to be all 3 will work. Clubs need to pick one and go with it 100%.
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I think a lot of the comments about millenials are right on the money.
Not only do most of them have zero financial wherewithal to join a club, and likely never will, I doubt many have interest even if they could.
This young generation is very anti-establishment, justifiably so, because the establishment has left them on the outside looking in. Saddled with massive college loans which is further compounded by low paying jobs waiting for them when they graduate, their current future is so bleak that they can't even see themselves being home-owners much less owning a golf membership.
The privates are going to have to figure out something quick....
They could afford the club life, at the expense of giving up ancient grains, $12/ pound pea pods and eggs that come from free range, generally content chickens.....but everyone has choices.
Joe,
Rest assured the millennials are not shopping at Whole Foods, even thou they would like to. Its almost entirely Gen Xs and older. And the extent of their splurging is usually a few drinks at the bar on Friday night.
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I think a lot of the comments about millenials are right on the money.
Not only do most of them have zero financial wherewithal to join a club, and likely never will, I doubt many have interest even if they could.
This young generation is very anti-establishment, justifiably so, because the establishment has left them on the outside looking in. Saddled with massive college loans which is further compounded by low paying jobs waiting for them when they graduate, their current future is so bleak that they can't even see themselves being home-owners much less owning a golf membership.
The privates are going to have to figure out something quick....
They could afford the club life, at the expense of giving up ancient grains, $12/ pound pea pods and eggs that come from free range, generally content chickens.....but everyone has choices.
Joe--
I don't know how old you are, but I daresay that for every Millennial who fritters away their money, as you seem to be implying, by buying pricier organic foods, there has to be at least one Baby Boomer who buys a brand-new $50k-plus car instead of a Honda Accord or something used that costs $30k or less.
Don't kid yourself - every generation is materialistic in its own way. Millennials aren't space aliens.
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Comparing golf's current economics with the "Big Short" housing bubble, fueled by a demand in mortgage-backed securities, is not a very good comparison.
The people invest a certain amount of discretionary money in golf, and it appears that amount has been gradually decreasing. I don't expect a catastrophic event, but rather a gradual contraction of the game's importance, and the number of playing fields.
John,
I think in someways it is very similar when you look at the games played in purchasing these large groups of companies by some of the larger management companies with Wall St money. Lot of paper games played....and some of these equipment manufacturers who could almost stop production for a year and have product to sell....there's some stuff out there....
Thanks for the response, Mike.
In my first comment, I almost mentioned that the price of some or most golf equipment seems too high compared to its manufacturing cost.
Like you suggest, a key feature of golf's growth has been debt and bankruptcy.
My home club Pumpkin Ridge was sold this summer to a Dallas, TX firm that owns about 20-25 golf properties. The club was purchased with borrowed money. Speaking for our aging, core membership, we are hopeful that the new owners will invest in and take pride in our beautiful golf club on the outskirts of suburbia.
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The sooner US clubs adopt the practices of their UK/Irish/Australian brethren, the better (more members, lower dues, fewer frills, more sustainable maintenance practices, focus on golf, etc.).
I'm all for it, but I'm not holding my breath.
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There is still room for superior new courses, but the number of courses will decrease overall.
I saw The Big Short at the movies last night. I enjoyed it immensely, but left the theater feeling gloomy about the future, and humanity in general.
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I think the next 20 years will be enormously important for the private golf club model. Can private clubs, used to doing things a certain way for a very long time, adapt to the changing social landscape and economic realities of the world we now live in?
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The sooner US clubs adopt the practices of their UK/Irish/Australian brethren, the better (more members, lower dues, fewer frills, more sustainable maintenance practices, focus on golf, etc.).
I'm all for it, but I'm not holding my breath.
Last summer I played at a decent public course outside of Seattle. Around the fourth hole, I heard a commotion behind us in the form of a boom box on a cart playing Lynnrd Skinnerd's Saturday Night Special. Of course, the driver had his cap on backwards and was imbibing. Over the course of the round, the music changed but it was basically loud rock which I actually like in my car or occasionally at home.
This is the problem of golf courses watering down versions of standards of golf etiquette and player expectations to the level they have as the result of trying to be all things to all people. I can understand to a degree the issue of course and clubs wanting to survive in an economic sense. Unfortunately, I shudder to think of what will emerge in the long run.
The Aussies and the Irish make an effort to uphold standards and traditions of the game with most courses and clubs not being overly stodgy about it. Players know the rules and mostly play in frequent competitions. Pace of play is good. Players mostly make an effort to do course maintenance and follow policies. They rake bunkers, leave bunkers in the recommended areas, fix pitch marks, and sand and replace divots. Pace of play is generally very good. Mobile phones are off, caps are worn with bill forward, and people follow dress standards. Beverage carts intrude minimally or are non-existent and local players usually walk. I can't think of an example where I have seen much drinking as part of the activity on the course, even though both cultures are known for enjoying alcoholic beverages.
Aussie and Irish culture are noted for spontaneity and both value "craic." So it is possible to maintain standards which relate to respect for the game, courses, and fellow players.
The golf industry in these countries is struggling but I think what will survive will be something like what I grew up around when I learned the game playing with an aunt and uncle.
That explains in part why I spend extended time in both countries these days.
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Excellent post, Charles. Not only should we strive to adopt the economics and maintenance practices of clubs in the UK, Ireland, Australia here in the USA, but we also should strive to adopt more of their attitudes and behaviors with respect to the game.
Personally, I don't care much how one dresses on the golf course (wear your hat facing forward or backward for all I care), but maintain pace of play and respect the course by fixing pitchmarks and replacing divots.
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To attract me, a club would:
- Be entirely private
- Have a group of members with whom I'd enjoy playing
- Be focused entirely on quality golf (course design, maintenance, operation)
- Avoid spending on non-golf (tennis, pool, health club, kids entertainment)
- Limit food service to a good after-round pub and have no spending requirement
- Have no initiation fee (lost if I move, the club is sold, goes Chap-11, or loses quality)
- Have dues that is no more than 2X what I would pay elsewhere on a cost-per-round basis
Dave,
What you have essentially described already exists, it's called Semi-private minus the 'entirely private' part. I live in Tennessee where a muni w/cart is $25, a former nice course (public) 10 years ago that used be $50 w/cart is now $30-35 on golfnow. I don't know where you live, but are you telling me you would pay double the golfnow price at say $65 cost-per-round if you could get your wish list? If you played twice per week, that's $520. Surely you have a club that you could walk for $520 even with a food minimum in your area (or just join a semi)?
Unfortunately, this eliminates pretty much all of the clubs in my area and seems counter to growth strategies that I've seen with clubs adding non-golf amenities trying to be “family friendly”. Adding gimmicks like foot golf or huge holes falls into this camp.
I don't know of a 5 decent clubs that have added foot golf or those stupid holes? As much as I think I would have loved to be Ward Cleaver, I recognize that era is probably never coming back. Since birth control became prevalent and divorce became more acceptable clubs almost HAVE to be family friendly or forget getting the guy since so many households are now dual-income. The golf-club only (completely private) model works in limited areas if the golf course is exceptional (and if its exceptional, it's not cheap)...but even then, I think a deep-pocketed individual has to subsidize it.
I think where the AVERAGE club misses the mark is kind of what Joe H was alluding to with their heart-friendly menu, free range this, cage free that, craft beer, and child care. Clubs think the 30-40 year old is going to want to sit back and knock back $5 beers with multiple adjectives, eat $14 chicken sandwiches, and drink $8 cosmopolitans? 1) They don't want to see that on their bill (adding to the overall golf bill) and 2) they would rather do that with people their own age. They add all that and then construct a gym that no one uses to capture 15 families that don't spend above their minimum and then what?
My wife played last year in a 9 hole group with 24-28 other ladies. Highly organized. Inexpensive group lessons. Fun games. They played other clubs frequently. The 18 hole lady group had just as many totaling 60-65 very active women. We played in a 9 hole couples league that was held every other Friday and was often sold out (14 couples). We all played together and ate together afterward. These events don't cost much to run other than staff but combine that with inexpensive kids camps, lessons, and a good junior league and clubs can do fine.
I understand most guys I know wouldn't want their wives near their golf club but for me at least, it makes the dues go down a lot easier than if I was the only one playing.
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To attract me, a club would:
- Be entirely private
- Have a group of members with whom I'd enjoy playing
- Be focused entirely on quality golf (course design, maintenance, operation)
- Avoid spending on non-golf (tennis, pool, health club, kids entertainment)
- Limit food service to a good after-round pub and have no spending requirement
- Have no initiation fee (lost if I move, the club is sold, goes Chap-11, or loses quality)
- Have dues that is no more than 2X what I would pay elsewhere on a cost-per-round basis
Dave,
What you have essentially described already exists, it's called Semi-private minus the 'entirely private' part. I live in Tennessee where a muni w/cart is $25, a former nice course (public) 10 years ago that used be $50 w/cart is now $30-35 on golfnow. I don't know where you live, but are you telling me you would pay double the golfnow price at say $65 cost-per-round if you could get your wish list? If you played twice per week, that's $520. Surely you have a club that you could walk for $520 even with a food minimum in your area (or just join a semi)?
Joe,
It exists on private level too. If Dave lives up North, its a 6 month season, so basically his $500 mark would be $250 a month. If he's paying $500 a month for upscale public it's only 6 months of the year if that counting shoulder season. Why should money be wasted on food min. (services/products) people no longer want? My parents club doesn't have a food min. Dave is spot on about initiation fees. People are moving a lot. Why wouldn't you want their monthly dues for the 5 years they live in your city? I wouldn't give 250 members my money knowing how they would piss it away.
Unfortunately, this eliminates pretty much all of the clubs in my area and seems counter to growth strategies that I've seen with clubs adding non-golf amenities trying to be “family friendly”. Adding gimmicks like foot golf or huge holes falls into this camp.
I don't know of a 5 decent clubs that have added foot golf or those stupid holes? As much as I think I would have loved to be Ward Cleaver, I recognize that era is probably never coming back. Since birth control became prevalent and divorce became more acceptable clubs almost HAVE to be family friendly or forget getting the guy since so many households are now dual-income. The golf-club only (completely private) model works in limited areas if the golf course is exceptional (and if its exceptional, it's not cheap)...but even then, I think a deep-pocketed individual has to subsidize it.
"the golf only model only works in limited areas'', that is BS! Deep-pocketed individuals don't subsidize Golf only places. Don't lump in 1% destination clubs with golf courses focusing on Golf. No, the golf course can be a Doak 5 or 6 and be golf only. I've said this before that you can have a million dollar maint budget and $250 a month dues. I'm not advocating that high of maint budget, I'm saying that unless in a high rent area, people are there to play Golf. The other stuff causes the Golf monthly rate to go up substantially. Tom Doak nailed it earlier, the memberships are too expensive and the model needs to shift with cheaper memberships and more members. Now people disenfranchised with the current model have destination golf to fill their need.
I think where the AVERAGE club misses the mark is kind of what Joe H was alluding to with their heart-friendly menu, free range this, cage free that, craft beer, and child care. Clubs think the 30-40 year old is going to want to sit back and knock back $5 beers with multiple adjectives, eat $14 chicken sandwiches, and drink $8 cosmopolitans? 1) They don't want to see that on their bill (adding to the overall golf bill) and 2) they would rather do that with people their own age. They add all that and then construct a gym that no one uses to capture 15 families that don't spend above their minimum and then what?
You are completely wrong again. I am 35 and would drink 2-5 craft beers at the club. A friend of mine is a member of a private Ross course and the 30 year olds redid the menu. Tacos, great burgers, and wings. Craft beer and can beer. Those are the ones staying and spending money. They took the 3 steak selections off the menu. People go to steakhouses out on the town. Older members eating soup are not spending. I think converting conference rooms at my parents club into a gym would be brilliant. The one thing I agree with you is baby sitting. My parents paid for babysitters, clubs shouldn't be providing that. They almost have to now because the failed FAMILY only model exists and is pushed.
My wife played last year in a 9 hole group with 24-28 other ladies. Highly organized. Inexpensive group lessons. Fun games. They played other clubs frequently. The 18 hole lady group had just as many totaling 60-65 very active women. We played in a 9 hole couples league that was held every other Friday and was often sold out (14 couples). We all played together and ate together afterward. These events don't cost much to run other than staff but combine that with inexpensive kids camps, lessons, and a good junior league and clubs can do fine.
I can't stand leagues at private clubs and the point of joining a club IMO is to not have to deal with them. If wives and kids want to play golf take them to par 3 courses or out at night like my parents did. I don't agree that it doesn't cost a lot to run. It requires bigger staffs and the idea that people need someone to group them together and can't just show up and Buddy Up impromptu.
I understand most guys I know wouldn't want their wives near their golf club but for me at least, it makes the dues go down a lot easier than if I was the only one playing.
I don't think its that. People want more active golfers. If my wife decides to take up golf, I'll take her to the range and or a muni. If she gets hooked then we would get two INDIVIDUAL memberships. At my course we have a lot of woman golfers and ones with really good etiquette and they play quickly.
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The bottom line is that a load of older "middle class" privates charging $400-600 a month are going to have to find a way get closer to $200 a month, increase membership to ~400-500 and tone down costs if they want to survive...or else go semi private or public. I have no idea how newer middle class clubs with land purchase loans to pay off will survive.
Ciao
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Sean,
I don't see it that way. Golf is like anything else. Some of these places will close and things will eventually be fine. So many people think if a course is a great, old classic then it must survive and eventually it will be ok. No, not all will. It works just like with restaurant or anything else. The decline in golf participation was one thing but let's not forget the influx of restaurants in many communities that at one time considered the private club the spot AND for some of the older places alcohol was also a draw. In my area the VFWs, American Legions and private clubs all suffered once some of the cities and counties allowed alcohol.
Going back to the housing crisis...Imagine if there had been a campaign to have more younger people buy homes whether they could afford them or not. Well, we have been doing the same thing with golf. Now we just need to let it find itself.
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Mike
Yes, some will close basically because there is little will to change to remain viable...this I think is a direct link with older memberships.
Ciao
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I might be a touch older than a millennial but these issues hit home for me. As I have evaluated memberships, the following issues seem to be nearly universal at clubs trying to attract those in their 30's.
1) Usage costs - I don't think the $500/mo. dues that have been derided on this thread are the issue. It's the fact that most clubs I see have mandatory cart or caddie policies, food minimums, bag room tips, locker room attendant tips, weekend tournament entry fees, etc. If you play 8 times a week as you hope to as a member, your "all in" for the month is suddenly $1,000 or more. These are nice luxuries, but I bet most people would happily go without a lot of these services if it will bring their costs down. I suspect that most of these extras exist just to impress guests rather than serve the membership.
2) Debt - A lot of clubs have funded necessary capital expenditures with long-term debt in the past decade. It's a turn off to be asked to pay assessments for the kitchen upgrade that was finished 7 years ago when you know that the irrigation system will need to be replaced in 5 years.
3) Overly Helpful Staff - I'm in my 30's - carrying my bag 50 yards to the putting green is not a problem and it feels really awkward to have someone constantly offering to do it for me.
Contrary to some popular beliefs, I think most millennials appreciate a certain level of decorum that is traditionally associated with a club as long as it doesn't go overboard. What they don't want is for someone to scold them if they take 3 steps into the clubhouse without remembering to remove their hat.
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Joe:
I don't know what “semi-private” means. Either a course is public, meaning anyone can pay a greens fee & play, or it is private, where only members can play. Semi-private seems to be a marketing term to make public golf look like more than it is.
I live outside of DC. Public (or semi-private, if you prefer) golf costs between $80 and $150 per round on weekends. Annual passes (or semi-private membership, if that sounds classier) cost between $3000 and $6000. One would need to play more than 40 rounds at the course makes that cost effective and probably more than 50 to justify limiting course choices to one a rewarding deal. Playing weekdays increases the number of rounds, but the equation changes little as weekday fees are much less.
No doubt there areas of the country where costs are much less. There are 4 NLE courses withing 10 miles of my home, all closed within the last 5 years and at least that many operating in Chap-11.
Currently I play with a couple of regular groups who shop the online tee time brokers for the best deals, restricting it to the half dozen best design/conditioned courses. I think that golf discounting is a temporary thing. When enough courses close, demand-supply will be back in balance.
A private club runs $15K-$100K and up for initiation, and anywhere from $500 and up monthly. (A couple of the above NLEs were private, including one that I was close to joining which took with it $50K of initiation from my neighbor...)
Ben:
Sounds like we agree in many areas. The point that I was trying to make, but likely didn't do a good job, is that private clubs should not try to be everything to everybody. They need to pick a specific product offering and stick to it.
Either cater to a specific market. For example:
1 - Hard core golfers with an affordable golf-focused offering (no fancy restaurant, pool, or other non-golf add-ons) [Many UK courses?]
2 – Families (have an easy to play course, lots of tee lengths, pool, tennis, kid stuff, no expectations of fast-play golf)
3 – Elite private (big name course, manicured conditions, fancy clubhouse & restaurant, high prices, exclusivity)
4 – “Goofy golf” (foot-golf, large holes, blasting music, fancy food, less than 18 hole rounds) [Maybe TopGolf has this one]
Over a long golf career, I've belonged to the first 3. This winter, I'm going to TopGolf for grins to round out the sample. I prefer #1. I acknowledge that others with different needs will prefer others.
Again, my point is that clubs need to decide on a focus area and stick to it. Trying to do it all alienates a lot of the potential members for one reason or another.
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Interesting question...The Pellucid report today asked the following and wrote the following:
Golf Industry's Big Short:
How Will it Play Out?
"Call me a sucker for Michael Lewis' take on the financial markets, baseball etc. but after seeing the movie "The Big Short" and reading the book, the characters who are trying to fight their way through the never-ending haze of confusion and misdirection in each story just resonate with me and remind me of the 15 years now I've spent in the golf industry trying to figure out, "What the hell is really going on at the most basic and fundamental level?"
Fortunately for those of us trying to make our living in this industry, there isn't any "big short" of the magnitude of the housing market mortgage loans manipulation between '05 and '08 portrayed in the book and movie, but we continue to be in desperate need of simple, clear thinking on the path forward for the industry in the face of declining participation and rounds that are simply following weather patterns against the backdrop of latent oversupply that's being absorbed at a glacial pace.
As I complete my 13th year of chronicling the information fundamentals of the golf industry (that's ~227 newsletters at an average of 7 pages each or over 1,500 pages of the written word trying to figure out this puzzle and enlighten subscribers/readers), we certainly have more information than we did back in 2002 but the "industry narrative" remains remarkably the same. In this issue I'll draw some parallels to themes from The Big Short and outline how we might find our way out of this maze quicker and with better clarity by learning from the financial markets' mistakes:
There is a finite level of demand for golf, building real estate around golf supply doesn't increase that finite level of demand
There is a segmentation of that demand across accessibility (private vs. public), value points (Public Premium, Value and Price) and experience types (Regulation vs. Learning & Practice) which needs to be heeded
Losing low-involvement golfers today masks the eventual rounds demand day of reckoning as our core golfers "age out" of the system and when it will take multiple new or existing golfers to replace their rounds contribution
Industry reports are noise for people who don't listen.
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Last summer I played at a decent public course outside of Seattle. Around the fourth hole, I heard a commotion behind us in the form of a boom box on a cart playing Lynnrd Skinnerd's Saturday Night Special. Of course, the driver had his cap on backwards and was imbibing. Over the course of the round, the music changed but it was basically loud rock which I actually like in my car or occasionally at home.
Exactly the kind of behaviour that many, many folk play golf to get away from! :)
Society and attitudes and behaviour has/is changing, evolving, always does, but peace and tranquility and serenity and all that kinda stiff is a key element in why I for one play golf. Take these aspects away and I reckon I'd give the game I've played and enjoyed since I was a youngster up pretty pronto and I doubt I'd be alone.
Clubs/courses need to recognise this because it's the middle/older age group that largely dominate amateur club golf, and this age group in general terms don't tend to appreciate the kind of behaviour mentioned in the quote above, and the middle/older age group probably spend more money at said clubs/courses than do the Saturday Night Special, cap backwards, imbibing crew.....so where's the cash going to come from if the middle/older brigade move away from the game?
Rant over.......for now!
Atb
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I have two sons, one is 22 and just graduated from college, and the other is 19 and a college sophomore - both played golf growing up and enjoy the game. I am a baby boomer and fortunate that I have done well enough that I am comfortably retired - had my kids late in life with a much younger wife. Here are some observations I have:
Most of us play golf because we view it as challenging and fun, mostly with friends, and have no problem with a round taking 4 hours if play keeps moving - longer than that is a question of enjoyment. Millennials are unable to do any one thing for four hours outside of work or sleep, without having something else to do at the same time such as playing on their phone, etc.
Cost of golf is not so overwhelming that it has to be either play on a regular basis or don't play at all. I lived in the DC area and there are clubs that have basically eliminated initiation fees and dues are substantially less for younger members. Here in North Carolina there are golf options that are much lower than in DC and certainly easily affordable - $200 a month and perhaps a small initiation fee.
Student debt can be a factor but that is not the case for most students.
There were far too many courses built just as there were with houses whenever someone sees a get rich scheme and houses are coming back because people need to live somewhere but golf is discretionary so it will never be in that circumstance.
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Interesting question...The Pellucid report today asked the following and wrote the following:
Golf Industry's Big Short:
How Will it Play Out?
"Call me a sucker for Michael Lewis' take on the financial markets, baseball etc. but after seeing the movie "The Big Short" and reading the book, the characters who are trying to fight their way through the never-ending haze of confusion and misdirection in each story just resonate with me and remind me of the 15 years now I've spent in the golf industry trying to figure out, "What the hell is really going on at the most basic and fundamental level?"
Fortunately for those of us trying to make our living in this industry, there isn't any "big short" of the magnitude of the housing market mortgage loans manipulation between '05 and '08 portrayed in the book and movie, but we continue to be in desperate need of simple, clear thinking on the path forward for the industry in the face of declining participation and rounds that are simply following weather patterns against the backdrop of latent oversupply that's being absorbed at a glacial pace.
As I complete my 13th year of chronicling the information fundamentals of the golf industry (that's ~227 newsletters at an average of 7 pages each or over 1,500 pages of the written word trying to figure out this puzzle and enlighten subscribers/readers), we certainly have more information than we did back in 2002 but the "industry narrative" remains remarkably the same. In this issue I'll draw some parallels to themes from The Big Short and outline how we might find our way out of this maze quicker and with better clarity by learning from the financial markets' mistakes:
There is a finite level of demand for golf, building real estate around golf supply doesn't increase that finite level of demand
There is a segmentation of that demand across accessibility (private vs. public), value points (Public Premium, Value and Price) and experience types (Regulation vs. Learning & Practice) which needs to be heeded
Losing low-involvement golfers today masks the eventual rounds demand day of reckoning as our core golfers "age out" of the system and when it will take multiple new or existing golfers to replace their rounds contribution
Industry reports are noise for people who don't listen.
Mark,
So tell me where you see the problem with the above....always open to listening.... :)
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While it's painful to earn your living in a contracting industry, this is possibly the best time in history to be a golf consumer. There are more good to great courses accessible on both the public and private side than at any time in history. Prices and services are becoming more competitive by simple economic supply & demand. If people want firm & fast 9-hole reversible courses you can play in under 2 hours with no frills then that's what the market will provide. It's not rocket science.
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Jerry,
"Student debt can be a factor but that is not the case for most students. "
Not trying to be argumentative but this is simply not true. While it may not be an issue for the circles you run in, the best estimates are 7 in 10 graduates leave college with an average of nearly $30k in debt.
http://www.usnews.com/news/articles/2014/11/13/average-student-loan-debt-hits-30-000
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Interesting question...The Pellucid report today asked the following and wrote the following:
Golf Industry's Big Short:
How Will it Play Out?
"Call me a sucker for Michael Lewis' take on the financial markets, baseball etc. but after seeing the movie "The Big Short" and reading the book, the characters who are trying to fight their way through the never-ending haze of confusion and misdirection in each story just resonate with me and remind me of the 15 years now I've spent in the golf industry trying to figure out, "What the hell is really going on at the most basic and fundamental level?"
Fortunately for those of us trying to make our living in this industry, there isn't any "big short" of the magnitude of the housing market mortgage loans manipulation between '05 and '08 portrayed in the book and movie, but we continue to be in desperate need of simple, clear thinking on the path forward for the industry in the face of declining participation and rounds that are simply following weather patterns against the backdrop of latent oversupply that's being absorbed at a glacial pace.
As I complete my 13th year of chronicling the information fundamentals of the golf industry (that's ~227 newsletters at an average of 7 pages each or over 1,500 pages of the written word trying to figure out this puzzle and enlighten subscribers/readers), we certainly have more information than we did back in 2002 but the "industry narrative" remains remarkably the same. In this issue I'll draw some parallels to themes from The Big Short and outline how we might find our way out of this maze quicker and with better clarity by learning from the financial markets' mistakes:
There is a finite level of demand for golf, building real estate around golf supply doesn't increase that finite level of demand
There is a segmentation of that demand across accessibility (private vs. public), value points (Public Premium, Value and Price) and experience types (Regulation vs. Learning & Practice) which needs to be heeded
Losing low-involvement golfers today masks the eventual rounds demand day of reckoning as our core golfers "age out" of the system and when it will take multiple new or existing golfers to replace their rounds contribution
Industry reports are noise for people who don't listen.
Mark,
So tell me where you see the problem with the above....always open to listening.... :)
Mike,
The problem is that sensible business operators are subscribing and reading this crap. I just love how the author uses "us" and "we" as though he's in the same boat, trying to survive the same storm, as his audience.........vomit.
Honestly, who on earth would listen to a guy who on one hand says," remind me of the 15 years now I've spent in the golf industry trying to figure out, "What the hell is really going on at the most basic and fundamental level?" " and than professes ,"how we might find our way out of this maze quicker and with better clarity by learning from the financial markets' mistakes:".
Comprehension of the decline in participation is not really that hard to work out and modify existing business models to suit. I'd be listening to the market and not some newsletter publisher.
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One of the few occasions where everybody is united that the US model for can't survive as it is except for a slim few.
Even the UK model is changing. Everyone is driving the price down. The under 40s want value and shop around. Most UK golf clubs are still average age 60. Under 40s don't want to pay the initiation fee and with plenty of clubs not charging they will go the best deal.
Many UK courses still some that see having no booking tee times as plus. Your under 40 man wants to open his phone and see there is a gap he can play. The under 40s join modern clubs. Many clubs now have a sliding scale from 16 to 30 (full price) £150 - £1000 per year. In the UK the view is really that the cheapest way to play golf is by being a member and that view does not seem to be shared by the US private model.
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Mike,
The problem is that sensible business operators are subscribing and reading this crap. I just love how the author uses "us" and "we" as though he's in the same boat, trying to survive the same storm, as his audience.........vomit.
Honestly, who on earth would listen to a guy who on one hand says," remind me of the 15 years now I've spent in the golf industry trying to figure out, "What the hell is really going on at the most basic and fundamental level?" " and than professes ,"how we might find our way out of this maze quicker and with better clarity by learning from the financial markets' mistakes:".
Comprehension of the decline in participation is not really that hard to work out and modify existing business models to suit. I'd be listening to the market and not some newsletter publisher.
Mark,
I agree that the problem is not that hard to work out. And if you read a continuation of the Pellucid reports he may be the only one who says that. Many agree we will bottom out at around 20 million golfers in the next few years. It doesn't matter if they wear their hat backwards, if they listen to rap music in the golf cars or if they skateboard the golf course. I agree with you regarding most industry reports as well as industry initiatives to grow the game. They are useless. We will just have to wait on more population to grow the game. The issue for so many of the places is the surrounding RE. The issue for so many of the equipment companies is pure participation. The issue for PGA, GCSAA, NGF etc is they don't want to let their employers know the participation is just becoming less.
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35 year old, no kids, loads of free time. In my hometown there are roughly a half dozen courses I might play throughout the year. Of those, two are private. Sure, the $400-500 dues plus mandatory cart fee, plus F&B makes zero sense to me. But the bigger reason I give no consideration to one of private clubs...The golf courses are awful...
As someone said earlier, I don't need the cart guy, the locker room attendant, etc. What I need is... A) a great golf course. B) a friendly environment. C) a halfway decent food/beverage for the occasional post-round hang out. I get all of that at the $25 muni, so why go elsewhere?
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35 year old, no kids, loads of free time. In my hometown there are roughly a half dozen courses I might play throughout the year. Of those, two are private. Sure, the $400-500 dues plus mandatory cart fee, plus F&B makes zero sense to me. But the bigger reason I give no consideration to one of private clubs...The golf courses are awful...
As someone said earlier, I don't need the cart guy, the locker room attendant, etc. What I need is... A) a great golf course. B) a friendly environment. C) a halfway decent food/beverage for the occasional post-round hang out. I get all of that at the $25 muni, so why go elsewhere?
Daniel,
Which muni can you play that is great for $25. I'd certainly like to know.....
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Re Daniel Jones comment, I recall thinking that the most successful clubs "back in the day" actually had the old locations, near business centers, but also then pretty crappy golf courses. Of course, over 30 years, many had remodeled.
When clubs were bigger, it seemed old money stayed at those central courses, and the new, younger whippersnappers or better players sought out some of the newer clubs with longer, more modern golf courses.
BTW, after our club closed here in DFW, I haven't rejoined anything, due to location, but my son did just get one of those junior memberships at Hackberry Creek in Irving, not far from where he lives. Works at Fidelity, got a promotion, played college golf, etc.
So, the club market isn't totally dead to the 20 somethings, just reduced, as it is for the overall market.
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I'm with Daniel. The only private course in town is a little 9 holer that I'd have no interest in, but there's a classic Ross at one of the clubs a half hour north of me. I've never had any interest in joining it - my interest is so low I don't even know what it would cost. Even if its yearly cost was no different than what I spend playing at public courses in the area (obviously it wouldn't be, this is hypothetical) I wouldn't be interested because then I'd feel I basically have to play almost all my golf at that one course because I was paying for it anyway.
While I'm sure it is a far cry from the old line clubs out east, it is still too stuffy and formal for a laid back guy like me. I don't want to fight off people who want to carry my clubs from my car to the clubhouse, and then expect a tip for that "service". Nor do I want to be a member of a club where people are worried about whether someone wears their hat backwards - and not because I do, I never even wear a hat. So long as they aren't damaging the course or my enjoyment of the round, I don't care what other people on the course do and certainly don't care how they dress. Given a choice I'd play at a course where shirts aren't required, rather than one that requires people to tuck in their shirts. A guy playing another hole with an untucked collarless shirt and cargo shorts doesn't affect me, never understood why people care about that stuff.
I can see the attraction of a club for those who play 50-100 rounds a year or golf is at least their main recreational activity but I just don't play often enough that it could ever make any sort of sense to join a club. It isn't even a matter of free time (I have no kids so I have more than most of you) but a matter of having too many competing interests for that free time.
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A good shoe guy at a club is a treasure.
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I want to amend a couple things. In a previous post, I said I thought that golf participation and the number of operating golf courses would decline gradually.
This is all speculation, of course.
It's a bit surprising that so few courses went out of business after The Big Short. Many went bankrupt and therefore many changed ownership. But anecdotal reports seem to suggest that many clubs are still weak financially.
Therefore, a real possibility exists that the next major recession/contraction will knock out a large number of courses and clubs, and no one will try to revive them. I'm amending my initial comment to suggest there may be a knockout blow that downsizes the game.
I am a gloomy contributor these days, but it makes no sense to sugar coat things. Quantitative easing after The Big Short set a precedent, and now the major oil producers are pumping at full capacity, despite the fact they are exceeding current demand. This is also new.
All of our primary contributors actually in the golf business have it right. Design and build for efficient maintenance and use of resources, while restoring and renovating the best existing courses. Within 10-15 years, unmanned maintenance equipment using GPS and powered by either gasoline or natural gas is a real possibility.
Frankly, if I were in the golf business, I would be wishing that life's other expenses weren't so onerous. Medical expenses now account for something like 18% of U.S. GDP, about twice as much as Great Britain and Australia. The desirable golf culture of these countries cannot be separated from their political/economic model.
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John,
Very well detailed, and I agree completely...and lower wages for millenials than what Gen X'ers and older had is making this even worse.
I too think after the last great recession, a lot of clubs were just delayed in closing when the next one hits....unless a lot of benevolent .1'ers buy up clubs for pennies on the dollar to operate at a loss as "Trophys"
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I'm wounded to see Lynyrd Skynyrd's name (albeit butchered) dragged through the mud of this thread. Hurtful.
Mike
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Purposely didn't read the entire thread, just Mike's OP.
Upfront, I don't think golf itself has a problem. It seems to me that as a golf consumer, I have more choice and differentiation than ever before. But the golf industry itself does have a problem. Actually three problems. The Industry, The Archivists, and The Trolls.
1) The Industry has to support itself. Or more accurately, justify itself. The booming economy and burgeoning career of Tiger between 1995-2005 built a huge golf industrial complex. Declining participation among low-frequency players and the aging out by the core player leaves that massive industry in a pickle. I don't see a way around the basic tenets of supply/demand for the golf industry at the macro level.
2) The Archivists believe being a golf consumer is analogous to their personal anecdotal experience. Unfortunately, the reigns of the golfing world are increasingly held at the local by these archivists. They wish to change nothing because the former days of golf industry glory was their heyday. Archivists can't envision why the golf industry is in a pickle or why change might be needed.
3) You know what the The Trolls are. The Trolls are the group that just hates on everything. The Trolls will acknowledge that the golf industry has a supply/demand problem. That's because Trolls are good at finding problems. They're just godawful at providing solutions. The last Turf Industry Show I went to in 2012 had a metric shit ton of a Trolls. Trolls will compulsively waste the time of innovators and leaders by diverting attention from solutions.
Trade publications can't say what I just did in the last sentence of The Industry paragraph. Anyone that wrote "we have no way out of the supply/demand problem we face at the macro level" in an industry-wide publication would be summarily dismissed (literally or figuratively). But, at the micro-level there are solutions. Architectural firms that focus more effort on renovation will survive. Construction/irrigation firms that focus on enabling superintendents operate more efficiently will thrive. Superintendents that increase efficiency while maintaining standards of play (and relentlessly communicating with their constituency) will survive. More than anything, these innovators will need industry support instead of archivists standing by shaking their head.
This is my two cents based on a number of factors. The golf industry will be fine for those that wish to adapt and evolve. In my opinion, innovators that use empirical data and robust relationships to quickly negotiate the golf downturn will do well.
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Architectural firms that focus more effort on renovation will survive. Construction/irrigation firms that focus on enabling superintendents operate more efficiently will thrive. Superintendents that increase efficiency while maintaining standards of play (and relentlessly communicating with their constituency) will survive. More than anything, these innovators will need industry support instead of archivists standing by shaking their head.
Ben,
I don't necessarily disagree with any of what you've stated; However, you've stated the above as fact, and I'm curious as to how you know. I'd LOVE to see the little guys have their day(especially a certain few architects that would put their heart and soul into a project or two), but it still seems like golf has it's have's and have nots. Money still is the primary motivator, whether or not we put a romantic spin on modern day developer heroes and such.
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Ben,
I give you mad props for calling your ownself out as a Troll....well done!
"1) The Industry has to support itself. Or more accurately, justify itself. The booming economy and burgeoning career of Tiger between 1995-2005 built a huge golf industrial complex. Declining participation among low-frequency players and the aging out by the core player leaves that massive industry in a pickle. I don't see a way around the basic tenets of supply/demand for the golf industry at the macro level.
2) The Archivists believe being a golf consumer is analogous to their personal anecdotal experience. Unfortunately, the reigns of the golfing world are increasingly held at the local by these archivists. They wish to change nothing because the former days of golf industry glory was their heyday. Archivists can't envision why the golf industry is in a pickle or why change might be needed.
3) You know what the The Trolls are. The Trolls are the group that just hates on everything. The Trolls will acknowledge that the golf industry has a supply/demand problem. That's because Trolls are good at finding problems. They're just godawful at providing solutions. The last Turf Industry Show I went to in 2012 had a metric shit ton of a Trolls. Trolls will compulsively waste the time of innovators and leaders by diverting attention from solutions. "
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Trade publications can't say what I just did in the last sentence of The Industry paragraph. Anyone that wrote "we have no way out of the supply/demand problem we face at the macro level" in an industry-wide publication would be summarily dismissed (literally or figuratively). But, at the micro-level there are solutions. Architectural firms that focus more effort on renovation will survive. Construction/irrigation firms that focus on enabling superintendents operate more efficiently will thrive. Superintendents that increase efficiency while maintaining standards of play (and relentlessly communicating with their constituency) will survive. More than anything, these innovators will need industry support instead of archivists standing by shaking their head.
This is my two cents based on a number of factors. The golf industry will be fine for those that wish to adapt and evolve. In my opinion, innovators that use empirical data and robust relationships to quickly negotiate the golf downturn will do well.
Ben,
I think you are close. The one thing I don't see is the renovation angle that everyone keeps talking about. Speaking for myself, I don't enjoy building bunkers on a course some other guy did. There are only so many courses that can do renovation. Most can't afford it. I like to build golf courses that are mine. That's why I don't care to get out and fight for renovation work. I don't see a living at it and would rather get into other facets of the golf industry and live another day to get new work. IMHO there are way to many architects and there is just not work to make the kind of living I would think most would desire. I think it has probably always been that way and architects were involved in other aspects of the industry. It will be an interesting year as IMHO the second round of flops will occur. Golf will be just fine. What you call the archivist will still have one finger up their rears. and that includes groups like First Tee, Hook a Kid etc... A guy just was telling us last week that the amount of out of date product Taylor Made has in the market place is over two quarters of production worth...
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That's because Trolls are good at finding problems. They're just godawful at providing solutions.
This isn't confined to Trolls, it's damn near everyone, including many highly educated, successful and influential members of this very site...
Nice posts, Mark Pavy.
As long as golf avoids bailouts and crooked politicians, it will be fine. It may struggle to find its place in today's world, with so many options, but it is simply too much fun to really fade away.
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I guess I'm a Troll.
I believe the problem is a dwindling source of discretionary income devoted to the game. Two things can be done:
1. Encourage more people to play, though word of mouth and familial ties to the game probably work best. Professional golf tournaments on TV are a compelling advertisement.
2. Eliminate unnecessary expenses. A separate thread on the topic might be interesting, about what people think is the most wasteful use of money/resources in golf life.
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Architectural firms that focus more effort on renovation will survive. Construction/irrigation firms that focus on enabling superintendents operate more efficiently will thrive. Superintendents that increase efficiency while maintaining standards of play (and relentlessly communicating with their constituency) will survive. More than anything, these innovators will need industry support instead of archivists standing by shaking their head.
Ben,
I don't necessarily disagree with any of what you've stated; However, you've stated the above as fact, and I'm curious as to how you know. I'd LOVE to see the little guys have their day(especially a certain few architects that would put their heart and soul into a project or two), but it still seems like golf has it's have's and have nots. Money still is the primary motivator, whether or not we put a romantic spin on modern day developer heroes and such.
Joe,
Sorry I didn't mean to imply that I had all of the answers. I think of this website mostly as a place where moderately informed people come to throw their opinions around in order to facilitate discussion.
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Ben,
I give you mad props for calling your ownself out as a Troll....well done!
"1) The Industry has to support itself. Or more accurately, justify itself. The booming economy and burgeoning career of Tiger between 1995-2005 built a huge golf industrial complex. Declining participation among low-frequency players and the aging out by the core player leaves that massive industry in a pickle. I don't see a way around the basic tenets of supply/demand for the golf industry at the macro level.
2) The Archivists believe being a golf consumer is analogous to their personal anecdotal experience. Unfortunately, the reigns of the golfing world are increasingly held at the local by these archivists. They wish to change nothing because the former days of golf industry glory was their heyday. Archivists can't envision why the golf industry is in a pickle or why change might be needed.
3) You know what the The Trolls are. The Trolls are the group that just hates on everything. The Trolls will acknowledge that the golf industry has a supply/demand problem. That's because Trolls are good at finding problems. They're just godawful at providing solutions. The last Turf Industry Show I went to in 2012 had a metric shit ton of a Trolls. Trolls will compulsively waste the time of innovators and leaders by diverting attention from solutions. "
Kalen,
I'm of the mind that elegant solutions to complex macro problems do not exist. With that said I do believe that there are innovative and smart people that can exist in difficult environments and succeed. I hope my post above tried to numerate at least one or two types of people that will survive the current golf downturn .
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Architectural firms that focus more effort on renovation will survive. Construction/irrigation firms that focus on enabling superintendents operate more efficiently will thrive. Superintendents that increase efficiency while maintaining standards of play (and relentlessly communicating with their constituency) will survive. More than anything, these innovators will need industry support instead of archivists standing by shaking their head.
Ben,
I don't necessarily disagree with any of what you've stated; However, you've stated the above as fact, and I'm curious as to how you know. I'd LOVE to see the little guys have their day(especially a certain few architects that would put their heart and soul into a project or two), but it still seems like golf has it's have's and have nots. Money still is the primary motivator, whether or not we put a romantic spin on modern day developer heroes and such.
Joe,
Sorry I didn't mean to imply that I had all of the answers. I think of this website mostly as a place where moderately informed people come to throw their opinions around in order to facilitate discussion.
Ouch. I was only curious if you knew something coming in the future of golf that I hadn't otherwise read about, that's all. No offense intended.
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Architectural firms that focus more effort on renovation will survive. Construction/irrigation firms that focus on enabling superintendents operate more efficiently will thrive. Superintendents that increase efficiency while maintaining standards of play (and relentlessly communicating with their constituency) will survive. More than anything, these innovators will need industry support instead of archivists standing by shaking their head.
Ben,
I don't necessarily disagree with any of what you've stated; However, you've stated the above as fact, and I'm curious as to how you know. I'd LOVE to see the little guys have their day(especially a certain few architects that would put their heart and soul into a project or two), but it still seems like golf has it's have's and have nots. Money still is the primary motivator, whether or not we put a romantic spin on modern day developer heroes and such.
Joe,
Sorry I didn't mean to imply that I had all of the answers. I think of this website mostly as a place where moderately informed people come to throw their opinions around in order to facilitate discussion.
Ouch. I was only curious if you knew something coming in the future of golf that I hadn't otherwise read about, that's all. No offense intended.
Dang it! I'm horrible with tone. I need to use more emoticons. No, no offense at all! I was just volunteering my opinion. My bad Joe. I have no insider info.
;D ;D ;D
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Architectural firms that focus more effort on renovation will survive. Construction/irrigation firms that focus on enabling superintendents operate more efficiently will thrive. Superintendents that increase efficiency while maintaining standards of play (and relentlessly communicating with their constituency) will survive. More than anything, these innovators will need industry support instead of archivists standing by shaking their head.
Ben,
I don't necessarily disagree with any of what you've stated; However, you've stated the above as fact, and I'm curious as to how you know. I'd LOVE to see the little guys have their day(especially a certain few architects that would put their heart and soul into a project or two), but it still seems like golf has it's have's and have nots. Money still is the primary motivator, whether or not we put a romantic spin on modern day developer heroes and such.
Joe,
Sorry I didn't mean to imply that I had all of the answers. I think of this website mostly as a place where moderately informed people come to throw their opinions around in order to facilitate discussion.
Ouch. I was only curious if you knew something coming in the future of golf that I hadn't otherwise read about, that's all. No offense intended.
Dang it! I'm horrible with tone. I need to use more emoticons. No, no offense at all! I was just volunteering my opinion. My bad Joe. I have no insider info.
;D ;D ;D
A three emoticon handshake? All is good!
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Ben,
Fair enough, I would agree that complex problems tend to be very difficult to fix as its difficult to know which particular fix directly affects an issue in a "cause/effect" manner.
In terms of identifying problems though, I have a slightly different take. I think its a healthy part of the process to fix anything, because if problems are not identified,( due to lack of trying or lack of belief that a problem actually exists), then for sure nothing will be improved. Finding and correctly defining a problem is usually one of the first big steps before a big innovation can take place.
That being said, I like you have a hard time coming up with viable fixes for this particular issue that are measurable.
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Ben,
Fair enough, I would agree that complex problems tend to be very difficult to fix as its difficult to know which particular fix directly affects an issue in a "cause/effect" manner.
In terms of identifying problems though, I have a slightly different take. I think its a healthy part of the process to fix anything, because if problems are not identified,( due to lack of trying or lack of belief that a problem actually exists), then for sure nothing will be improved. Finding and correctly defining a problem is usually one of the first big steps before a big innovation can take place.
That being said, I like you have a hard time coming up with viable fixes for this particular issue that are measurable.
Kalen,
Yes precisely. I'm no economist, but there's something to that Invisible Hand thing. No amount of foot golf, golfnow.com's, or name-your-fix is going to correct the macro issue. Golf participation is down. Supply is high. The game itself cannot remain as golf (writ large) and attract the players that already eschewed golf for other things.
That's the crux of this for me. Trade pubs tell me golf is in a bad spot. I say BS, golf is everything it has always been. The problem is that the industry needs more players to support it.
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Ben,
You really are right. The only reason one has to worry about anything golf is if they get paid by being involved with golf. There will always be golf....maybe less of it, maybe less employed by it, but at the end of the day, those who are more talented than average will still be there. An occupational hazard, I suppose.
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Ben,
You really are right. The only reason one has to worry about anything golf is if they get paid by being involved with golf. There will always be golf....maybe less of it, maybe less employed by it, but at the end of the day, those who are more talented than average will still be there. An occupational hazard, I suppose.
Joe,
Which really sucks right? I mean, it's great to be driving a Chevy Suburban right now. Not so great if you're livelihood is dependent on oil prices.
I think the industry should spend more time trying to make the supply side more solvent and less time making the demand side bigger, Maybe I'm off base.
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Ben, Joe etc,
It really will correct itself. As an example of cutting cost... this past weekend after all of the rain down here we were playing and the tees had not been cut in a week. The greens had not been mowed that day and I asked my group if they were good with the conditions. All were fine. We can get by on much less than we are doing. Have we really asked the golfer or has the competition between either boards or supts placed conditions at a level the player is not really pushing for? It will be fine.
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Ben,
You really are right. The only reason one has to worry about anything golf is if they get paid by being involved with golf. There will always be golf....maybe less of it, maybe less employed by it, but at the end of the day, those who are more talented than average will still be there. An occupational hazard, I suppose.
For sure Joe. Except that members of clubs are watching their beloved clubs slowing going down the tubes. So it is natural for clubs to look for ways to retain and increase membership. Some will do smart thngs and get lucky, some will do not so smart things and get lucky, some will be unlucky regardless. The part of luck in all this really is overlooked...as if clubs have power over the economy and where they are located. So from that perspective, the industry and golfers are tied together.
Ciao
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Ben,
You really are right. The only reason one has to worry about anything golf is if they get paid by being involved with golf. There will always be golf....maybe less of it, maybe less employed by it, but at the end of the day, those who are more talented than average will still be there. An occupational hazard, I suppose.
For sure Joe. Except that members of clubs are watching their beloved clubs slowing going down the tubes. So it is natural for clubs to look for ways to retain and increase membership. Some will do smart thngs and get lucky, some will do not so smart things and get lucky, some will be unlucky regardless. The part of luck in all this really is overlooked...as if clubs have power over the economy and where they are located. So from that perspective, the industry and golfers are tied together.
Ciao
Sean,
There's no luck regarding this in most cases. The top thing is location beginning with region, state, city, neighborhood...I'm just so tired o hearing of all the programs to save the game. Golf is no different than any other industry. The right product works in the right location. Np different than a car dealership. If the main dealership in a small town farm town was Mercedes and they started a Hook a kid on Mercedes program would it work? NO... They might even have a great program where the younger adults could purchase a car at no down payment and extend payments etc but eventually the maintenance and the cost of the car would catch up and the majority would sell it or give back or whatever. Golf is the same. There is a market for a certain amount of golf at various price points.
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Mike
You are forgetting that an over-saturated market has already happened. Clubs must go and much of this is down to luck. That isn't to say that clubs can't influence their fate, but luck plays a big part in all this. Business isn't nearly all about making all the right decisions....luck plays a big role much of the time.
Ciao
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I want to amend a couple things. In a previous post, I said I thought that golf participation and the number of operating golf courses would decline gradually.
This is all speculation, of course.
It's a bit surprising that so few courses went out of business after The Big Short. Many went bankrupt and therefore many changed ownership. But anecdotal reports seem to suggest that many clubs are still weak financially.
Therefore, a real possibility exists that the next major recession/contraction will knock out a large number of courses and clubs, and no one will try to revive them. I'm amending my initial comment to suggest there may be a knockout blow that downsizes the game.
John,
I believe many CAN'T go under because they are so closely tied to the neighborhoods they are in. If they shut down, home values would plummet so they keep playing the game of musical owners hoping at some point they will at least break even. The problem, at least in my view is, most of these courses used the worst land (and the homes got the best), are mostly unwalkable, and their clubhouses were built for their three busiest days and not their average day. That story has played out in my area as there aren't enough home owners to support the course within a 3 mile radius, and those outside that area don't want to join a course that they have to take a cart to play each time, or budget 4 hours because of the green to tee spacing.
Traditional courses with tight routings on good land have had their players/members siphoned off by these boondoggles and it appears to golf 'experts' the game is suffering? Meanwhile we have a golf channel that didn't exist when I learned the game in the early 90's, magazines on iPads, FREE quality instruction on youtube, TPI/golf fitness that used to be looked down upon, clubs on eBay that are half of retail, golfnow (which I hate, but nonetheless has made the game cheaper), entire websites devoted to golf only, and junior initiatives that are flat out impressive (at least in my area sponsored by my local PGA chapter).
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Mike and Sean,
Ur both half right. Sean most of the courses overbuilt in 80s and 90s were upscale public. Those were the pieces of shit built. As Mike said location is more important then anything assuming the course doesn't suck. Im watching a few courses struggle in nice areas. The biggest problem is there are too many Country Clubs and too many of the same model. The 1950s country club model will have to change in the declining areas to make it. It's sad when those go, u can't get back the land. The luck that Sean speaks of is only with having a great location!
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I want to amend a couple things. In a previous post, I said I thought that golf participation and the number of operating golf courses would decline gradually.
This is all speculation, of course.
It's a bit surprising that so few courses went out of business after The Big Short. Many went bankrupt and therefore many changed ownership. But anecdotal reports seem to suggest that many clubs are still weak financially.
Therefore, a real possibility exists that the next major recession/contraction will knock out a large number of courses and clubs, and no one will try to revive them. I'm amending my initial comment to suggest there may be a knockout blow that downsizes the game.
John,
I believe many CAN'T go under because they are so closely tied to the neighborhoods they are in. If they shut down, home values would plummet so they keep playing the game of musical owners hoping at some point they will at least break even.
John,
I think many WILL go eventually. Actually it's already happening.
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I want to amend a couple things. In a previous post, I said I thought that golf participation and the number of operating golf courses would decline gradually.
This is all speculation, of course.
It's a bit surprising that so few courses went out of business after The Big Short. Many went bankrupt and therefore many changed ownership. But anecdotal reports seem to suggest that many clubs are still weak financially.
Therefore, a real possibility exists that the next major recession/contraction will knock out a large number of courses and clubs, and no one will try to revive them. I'm amending my initial comment to suggest there may be a knockout blow that downsizes the game.
I am a gloomy contributor these days, but it makes no sense to sugar coat things. Quantitative easing after The Big Short set a precedent, and now the major oil producers are pumping at full capacity, despite the fact they are exceeding current demand. This is also new.
All of our primary contributors actually in the golf business have it right. Design and build for efficient maintenance and use of resources, while restoring and renovating the best existing courses. Within 10-15 years, unmanned maintenance equipment using GPS and powered by either gasoline or natural gas is a real possibility.
Frankly, if I were in the golf business, I would be wishing that life's other expenses weren't so onerous. Medical expenses now account for something like 18% of U.S. GDP, about twice as much as Great Britain and Australia. The desirable golf culture of these countries cannot be separated from their political/economic model.
John,
Ur last paragraph is one of many reasons why private golf isn't affordable. US private membership has always been founded on elitism. Mentioning cost as in market forces was never to be mentioned. That is changing culturally regardless of the housing golf courses imo.
In prior post you said u had little hope for humanity. I wish you had little hope for the fed reserve which created the housing cartballer tracks with artifical demand. Krugman said in 2001 we needed a housing bubble. I guess the same idiots get idolized day in and day out.
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Mike and Sean,
Ur both half right. Sean most of the courses overbuilt in 80s and 90s were upscale public. Those were the pieces of shit built. As Mike said location is more important then anything assuming the course doesn't suck. Im watching a few courses struggle in nice areas. The biggest problem is there are too many Country Clubs and too many of the same model. The 1950s country club model will have to change in the declining areas to make it. It's sad when those go, u can't get back the land. The luck that Sean speaks of is only with having a great location!
Ben
I also said middle many class clubs charging $400-600 a month need to fnd a way to get closer to $200 a month. That would eliminate much of the luck I speak of 8)
Ciao
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I think everyone on this page has valid points.
Its part luck, part location, part pricing, part <insert here>....Its certainly a complex business model with many inputs and hopefully you can get "lucky" and get the recipe right.
P.S. I've always thought that older clubs that have paid off their notes, would have a tremendous advantage in staying afloat in that they effectively only have to break even on operation costs to keep things going. Its the ones that are still trying to pay back land acquisition costs and course design costs that are likely in big trouble.