[Mike Hendren]

Be it high-technology, commodities, equities or real estate, speculation, coupled with abundant capital availability and a clouded understanding  of intrinsic value inevitably create a bubble that is often recognized only in hindsight when it bursts. 

I have for years been teaching that "spec" is a four letter word.  Is there anything more speculative than a new golf course?  Accordingly, while the number of rounds played in this country have stabilized and  perhaps slightly declined,  I would argue that the issue is supply, not demand.  What's we're seeing is a bursting of the golf course bubble, pure and simple.

Thoughts?

Mike

[Bill_McBride]

Be it high-technology, commodities, equities or real estate, speculation, coupled with abundant capital availability and a clouded understanding  of intrinsic value inevitably create a bubble that is often recognized only in hindsight when it bursts. 

I have for years been teaching that "spec" is a four letter word.  Is there anything more speculative than a new golf course?  Accordingly, while the number of rounds played in this country have stabilized and  perhaps slightly declined,  I would argue that the issue is supply, not demand.  What's we're seeing is a bursting of the golf course bubble, pure and simple.

Thoughts?

Mike

Agreed but it is intrinsically tied into the real estate collapse.  That has affected existing golf developments and limited new golf development.  I don't think you can really separate the two.

[Dave Falkner]

ergo the 6:30 tee time   home by 10 when the rest of the crew is just starting to rally, and if all goes well it can be followed bup by a trip to the range around 5 -5:30  when  all the other stuff has been taken care of

[Dave Falkner]

true regarding the tiredness, but there is nothing like that early morning stillness  with the  dew on the grass  and coming home with the bag of jelly donuts from the bakery 

[Mike_Young]

The game of golf can make it....but the golf lifestyle we have created in america will have a hard time....so many of the people we see as members of clubs today know nothing of golf just the lifestyle.....BUT the big problem is the lifestyle has created these huge clubhouses that just drain a golf course....the golf line item so often subsidizes all other facets of a club.....I think the problem is how do you stop the bleeding when you have built in all of this unneeded overhead and can't dump it.....the cart boy wiping a towel over your clubs for a tip, the valet, the country club for a day approach and all the hype will go and basics will prevail....IMHO

[Charlie Goerges]

Dave,

I think you're right, golf is competing against a variety of foes. I don't think the problem of declining interest in the game is intractable however. It comes down to money and time. Of these the more easily understood is money.

Time is the tough nut to crack. And it's not just time to play, it's time away from everything else. If golf has to compete against the kids' baseball team or ballet lessons or grocery shopping or yard work, it will lose. But if golf gets to compete against gym memberships or family night at the movie theater, or buying a boat, golf has a chance to win.

The "industry" just needs to frame the message/debate properly.

[Dan_Callahan]

I guess family time would cut into rounds played if you insist on playing alone or with other adults. But if you take your kids with you, thus freeing up your spouse to get stuff done sans kids, you come off as a hero. I love golfing with my kids, but I have to admit there is a certain amount of selfishness to that decision.

Golfing by myself = arguments at home. Golfing with my kids = hero when I come home. The same is true with skiing. In some respects, having kids has allowed me to pursue those activities that had previously been in hibernation when I was married but without kids. I mean, think about the difference between announcing, "I am going to the golf course. Home in 6 hours. Will see you and the kids tonight." Versus, "I'm going to the golf course. Taking the kids with me. Enjoy your alone time."

I guess if my kids were little assholes this wouldn't be quite as desirable an option. But they aren't, and as a result have been a part of some of the most enjoyable weekends of my life.

[Phil Benedict]

I have significantly curtailed my golf after dropping out of a private club at the end of last season.  I live in the New York area and public course alternatives are poor.

I haven't played a round in 3 weeks and definitely miss playing regularly.  On the other hand, I've found other ways to occupy the extra time and love not feeling rushed on weekends.  I don't think I'll get back to playing regularly until retirement, which is 5 or 10 years away.  

Golf is pretty demanding mistress.

[JMEvensky]

The game of golf can make it....but the golf lifestyle we have created in america will have a hard time....so many of the people we see as members of clubs today know nothing of golf just the lifestyle.....BUT the big problem is the lifestyle has created these huge clubhouses that just drain a golf course....the golf line item so often subsidizes all other facets of a club.....I think the problem is how do you stop the bleeding when you have built in all of this unneeded overhead and can't dump it.....the cart boy wiping a towel over your clubs for a tip, the valet, the country club for a day approach and all the hype will go and basics will prevail....IMHO

I agree with every bit of this.

I think that people who actually play golf,will forego the utility bill before their dues,green fees,etc.Those people were there before the lifestyle and they'll be there after.

Those who came to the game because it was fashionable will move on to(and probably screw up) the next big thing-kind of like locusts.

[Kalen Braley]

I think to a large extent, and not that it likely applies to most in here.

But if you're in rough financial shape, struggling to pay the monthlys, and up to your eye-balls in debt then you're crazy to be out there every weekend forking over dough for golf.  Sure everyone needs a break so I'm not saying to give it up entirely, but for America to get away from its love affair with debt and over-extending themselves, priorities clearly need to be drawn up and enforced.

Just sayin..

[Bill_McBride]

I guess family time would cut into rounds played if you insist on playing alone or with other adults. But if you take your kids with you, thus freeing up your spouse to get stuff done sans kids, you come off as a hero. I love golfing with my kids, but I have to admit there is a certain amount of selfishness to that decision.

Golfing by myself = arguments at home. Golfing with my kids = hero when I come home. The same is true with skiing. In some respects, having kids has allowed me to pursue those activities that had previously been in hibernation when I was married but without kids. I mean, think about the difference between announcing, "I am going to the golf course. Home in 6 hours. Will see you and the kids tonight." Versus, "I'm going to the golf course. Taking the kids with me. Enjoy your alone time."

I guess if my kids were little assholes this wouldn't be quite as desirable an option. But they aren't, and as a result have been a part of some of the most enjoyable weekends of my life.

Yeah, but on a mass scale, that ain't cheap either...

4 greens fees, no matter how discounted, cost more than 1 and (on a mass scale), people are having a hard time affording one...

That's why a family membership in a reasonably affordable club has always been a good investment - for those who want to play a lot of golf with their family.

[Brent Hutto]

That's why a family membership in a reasonably affordable club has always been a good investment - for those who want to play a lot of golf with their family.

Bill,

Could your club survive on only the members who "play a lot of golf with their family"? Our most certainly could not.

Of course I realize you really said "want to play a lot of golf with their family" but the point remains. Most clubs that I know of are in a precarious enough financial position that they need all their sources of support to continue. To survive by relying on the sort of "core golfers" you're describing they would have to take on a very different form...and one that may not be convertible from their current incarnations as Be Everything, Do Everything, Provide Everything.

[Bradley Anderson]

I guess family time would cut into rounds played if you insist on playing alone or with other adults. But if you take your kids with you, thus freeing up your spouse to get stuff done sans kids, you come off as a hero. I love golfing with my kids, but I have to admit there is a certain amount of selfishness to that decision.

Golfing by myself = arguments at home. Golfing with my kids = hero when I come home. The same is true with skiing. In some respects, having kids has allowed me to pursue those activities that had previously been in hibernation when I was married but without kids. I mean, think about the difference between announcing, "I am going to the golf course. Home in 6 hours. Will see you and the kids tonight." Versus, "I'm going to the golf course. Taking the kids with me. Enjoy your alone time."

I guess if my kids were little assholes this wouldn't be quite as desirable an option. But they aren't, and as a result have been a part of some of the most enjoyable weekends of my life.

Yeah, but on a mass scale, that ain't cheap either...

4 greens fees, no matter how discounted, cost more than 1 and (on a mass scale), people are having a hard time affording one...

That's why a family membership in a reasonably affordable club has always been a good investment - for those who want to play a lot of golf with their family.

Shivas,

What you used to spend in the clubhouse, drinking those gay Mexican beers with your buddies, and settling up on your gambling losses, after a round of golf, was way more than you will spend on your kid's green fees.  

[Bill_McBride]

That's why a family membership in a reasonably affordable club has always been a good investment - for those who want to play a lot of golf with their family.

Bill,

Could your club survive on only the members who "play a lot of golf with their family"? Our most certainly could not.

Of course I realize you really said "want to play a lot of golf with their family" but the point remains. Most clubs that I know of are in a precarious enough financial position that they need all their sources of support to continue. To survive by relying on the sort of "core golfers" you're describing they would have to take on a very different form...and one that may not be convertible from their current incarnations as Be Everything, Do Everything, Provide Everything.

Brent, I was comparing the cost of a monthly membership dues payment with the cost of taking three kids out to play at a public course.

Our club is in a pinch like everybody but I am still delighted to see the number of kids on the driving range - when they can tear themselves out of the pool in these 95^o days!

[George Pazin]

Bill:  I totally agree. The "affordable" golf club does not exist here. Maybe on the south side of Chicago and maybe 2 hours from here, but not here.

To be frank, I view regular-play golf as a run-of-the-mill, routine commodity. Maybe it's my tight-ass Irish immigrant roots, but I can't bring myself to "overpay" for that.

Those who live outside major metro areas should consider themselves very, very lucky because they don't face this gut-check moral and fiscal dilemma to the same extent those who live in big cities do. (Yes, that was my version of a "Green Acres" diatribe).

I'm with Hendren on this one. Golf just ain't all that important - not compared to college tuition, leaving something for the kids in case they turn out to be morons and need some help and the other things you think of when you're 40-something, come to grips with human frailty and recognize that there are things more important than you and your own desires.

How affordable are other things in the big metro areas? What is compensation in the big city like relative to the sticks?

We all make choices in life, some are difficult, some are not.

The real problem is people making decisions for other people without a vested interest other than their own egos, but that's a battle for another day...

Lotsa bubbles in today's world, why should golf be any different?

[Bradley Anderson]

Bill:  I totally agree. The "affordable" golf club does not exist here. Maybe on the south side of Chicago and maybe 2 hours from here, but not here.

To be frank, I view regular-play golf as a run-of-the-mill, routine commodity. Maybe it's my tight-ass Irish immigrant roots, but I can't bring myself to "overpay" for that.

Those who live outside major metro areas should consider themselves very, very lucky because they don't face this gut-check moral and fiscal dilemma to the same extent those who live in big cities do. (Yes, that was my version of a "Green Acres" diatribe).

I'm with Hendren on this one. Golf just ain't all that important - not compared to college tuition, leaving something for the kids in case they turn out to be morons and need some help and the other things you think of when you're 40-something, come to grips with human frailty and recognize that there are things more important than you and your own desires.

Shivas,

About 40 minutes north of you there is great golf value at Shepherds Crook in Zion, and Bonnie Brook in Waukegan.

[JC Jones]

Bill:  I totally agree. The "affordable" golf club does not exist here. Maybe on the south side of Chicago and maybe 2 hours from here, but not here.

To be frank, I view regular-play golf as a run-of-the-mill, routine commodity. Maybe it's my tight-ass Irish immigrant roots, but I can't bring myself to "overpay" for that.

Those who live outside major metro areas should consider themselves very, very lucky because they don't face this gut-check moral and fiscal dilemma to the same extent those who live in big cities do. (Yes, that was my version of a "Green Acres" diatribe).

I'm with Hendren on this one. Golf just ain't all that important - not compared to college tuition, leaving something for the kids in case they turn out to be morons and need some help and the other things you think of when you're 40-something, come to grips with human frailty and recognize that there are things more important than you and your own desires.

Cry me a river Shivas.  1) Salaries are typically inflated in large cities to accommodate the high cost of living (i.e. expensive golf); and 2) nobody is forcing you to live there.  Move up to nowhere Wisconsin, hang a shingle, telecommute, whatever and play Lawsonia day in and day out.  You want big city life, you pay big city prices; but dont come on here and talk about how those in the less populated areas are "lucky."

[JC Jones]

How affordable are other things in the big metro areas? What is compensation in the big city like relative to the sticks?

We all make choices in life, some are difficult, some are not.

The real problem is people making decisions for other people without a vested interest other than their own egos, but that's a battle for another day...

Lotsa bubbles in today's world, why should golf be any different?

George, in case you missed the news, for the first time EVER, more people live in major metro areas than not.  This isn't a "one man's situation" issue.  This is a "majority of the nation" issue, and therefore a "majority of the customer base for golf" issue.

assuming a majority of golfers live in major metro areas.  you are assuming that because a majority of the population lives in cities that so do a majority of golfers (or atleast golfers who would like to play with any sort of regularity).

[Mike Sweeney]

George, in case you missed the news, for the first time EVER, more people live in major metro areas than not.  This isn't a "one man's situation" issue.  This is a "majority of the nation" issue, and therefore a "majority of the customer base for golf" issue.

Shivas,

Nobody on this board lives in a more densely populated neighborhood or building than I do, and NOBODY here should be crying for me. You want Barney back, well here you go!

Barney said:

"I have never read such a load of crap in my life.  Your plight is not new or uncommon in the golf world.  It is called whipped and for every guy like you there is another man waiting to take your place.  Sometimes when we are at the club we tell stories of past club champions who one day got a call and never came back...We thought we would miss them, we may have even wondered how the club or our weekend games would survive without them but there was always someone in the wings.  Now at 47 I am in the middle of the age pack and am starting to see old friends die and new friends learn how to break par and take my money.  I think you have made a good choice but don't worry the tee sheet will remain full...or as full as I can stand it."

And stop lecturing me about your tax base! 

[George Pazin]

I wasn't referring to anyone's specific choices, merely that we each make choices.

At any rate, JC's right, just because more people live in metro areas for the first time doesn't necessarily mean the majority of the golf customer base does.

Mike S, if it's makes you sleep better, I'm not crying for you!

[Mike Hendren]

Again, I think the imbalance is a supply problem.  Most comments on this thread suggest it is a demand issue.

Mike

[JC Jones]

Again, I think the imbalance is a supply problem.  Most comments on this thread suggest it is a demand issue.

Mike

I agree with you, there certainly is too much supply out there.

[Lou_Duran]

Be it high-technology, commodities, equities or real estate, speculation, coupled with abundant capital availability and a clouded understanding  of intrinsic value inevitably create a bubble that is often recognized only in hindsight when it bursts.  

I have for years been teaching that "spec" is a four letter word.  Is there anything more speculative than a new golf course?  Accordingly, while the number of rounds played in this country have stabilized and  perhaps slightly declined,  I would argue that the issue is supply, not demand.  What's we're seeing is a bursting of the golf course bubble, pure and simple.

Thoughts?

Mike

Doublebogeyed this one, I think.  Demand as measured by # of rounds played is generally down for several years.  I haven't seen a mix analysis, but I suspect that higer priced courses have been hurt the most, so the more relevant measure of demand, revenues, is probably even worse.

As a result of an oversupply, one could see lower revenues due to discounting, but the number of rounds should be up, holding everything else equal.  The condition of the economy, competitive alternatives for our time, changing preferences and priorities primarily affect demand.

Next time you see Art, you might make your argument.  I would be most interested in his response.

BTW, would you care to define "intrinsic value"?  I may argue that it is mostly without meaning.

BTW2, there is a city official in Michigan who has a solution to an ""oversupply", mass bulldozing of neighborhoods.  I don't know what compensation they're offering to owners, but I could see a salaried banker or a regulator with no skin in the game lining up to cure his ORE portfolio.  Of course, I don't mean you.

[Bill_McBride]

Again, I think the imbalance is a supply problem.  Most comments on this thread suggest it is a demand issue.

Mike

Looks like it's some of both.  Over supply for sure, and demand down due to the recession, increased savings rate, no mon no fun.

The combination of over supply and falling demand is not pretty.

[JC Jones]

Be it high-technology, commodities, equities or real estate, speculation, coupled with abundant capital availability and a clouded understanding  of intrinsic value inevitably create a bubble that is often recognized only in hindsight when it bursts. 

I have for years been teaching that "spec" is a four letter word.  Is there anything more speculative than a new golf course?  Accordingly, while the number of rounds played in this country have stabilized and  perhaps slightly declined,  I would argue that the issue is supply, not demand.  What's we're seeing is a bursting of the golf course bubble, pure and simple.

Thoughts?

Mike

Doublebogeyed this one, I think.  Demand as measured by # of rounds played is generally down for several years.  I haven't seen a mix analysis, but I suspect that higer priced courses have been hurt the most, so the more relevant measure of demand, revenues, is probably even worse.

As a result of an oversupply, one could see lower revenues due to discounting, but the number of rounds should be up, holding everything else equal.  The condition of the economy, competitive alternatives for our time, changing preferences and priorities primarily affect demand.

Next time you see Art, you might make your argument.  I would be most interested in his response.

BTW, would you care to define "intrinsic value"?  I would argue that is mostly without meaning.

The common mistake of an economic analysis.  One cannot approach these (or any other issues) without accommodating for the (impossible to predict) human element/utility.  In northern Michigan, for example, many courses have seen a decrease in demand and have either failed to reduce their fees or have increased them.  This is based largely on maintaining a certain level of "prestige," which is a completely irrational thing to do in a typical model.

Bogey is right, supply has outpaced demand (as often happens) and the bubble is bursting because courses were built with too much debt and now are unable to come back to the equilibrium with their prices because the revenue would not be sufficient to service the note.

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