OT: Golf biz, where is it headed?

[Dave McCollum]

I've been absent here for a long time.  My question is how do you explain this surge or boom in the golf business during this pandemic?  I know all the obvious answers.  We've been lucky and prospered well and have done OK for a few years, but did some desperate years before, 2008-2016.  But these last couple of years have exceeded making a couple of bucks and we have to consider the consequences of making real money.  Not nose-bleed money, but enough to pay attention.  We didn't do anything differently, pretty much business as usual.  Great, hard working staff.  Not much drama or turnover.  It seemed like we were gifted a perfect storm of unique circumstances that suddenly made it all easy.  I know the particular things that worked for us.  I wonder if others had the same experience and if it is part of a more universal or temporary trend?  It's great and makes me excited about investing our good fortune in our course and business which I have done.  Am I nuts and should just take our temporary gains as a hedge against what we survived?  How do you feel about the future of the the golf biz?                   

[Tom_Doak]

Dave:


People around the business are giddy.  I have had literally six calls in the last three weeks about new projects in the USA.


The main thing today is to reward your good staff and make sure you keep them.  They are hard to replace these days.  But I would treat such good fortune as overdue returns from years of struggle, rather than as a sign that the Red Sea has parted.  The Red Sea did not stay parted for long.

[Joe Hellrung]

"The Red Sea did not stay parted for long."
- filing this one away in my list of favorite adages.  Thanks Tom.

[Wayne_Kozun]

I don't think that this has been great for everyone - resort courses will have suffered, especially courses in jurisdictions that had very tough lockdowns.  Take Cabot Links - until July 1 of this year visitors from outside of the four Atlantic Canadian provinces had to quarantine for 14 days upon arrival in Nova Scotia.  That meant that they had almost no out of province visitors during 2000 and the first part of 2021.  I imagine courses in Scotland and Ireland that depend a lot on revenue from overseas travellers will also have seen their guest revenue drop to almost nothing, perhaps getting a bit more back from locals.  But don't some of these courses have a revenue structure where one foursome of visitors brings in more revenue (say 1000 Pounds or Euros) than a member's annual dues?

[Steve Lapper]

I don't think that this has been great for everyone - resort courses will have suffered, especially courses in jurisdictions that had very tough lockdowns.  Take Cabot Links - until July 1 of this year visitors from outside of the four Atlantic Canadian provinces had to quarantine for 14 days upon arrival in Nova Scotia.  That meant that they had almost no out of province visitors during 2000 and the first part of 2021.  I imagine courses in Scotland and Ireland that depend a lot on revenue from overseas travellers will also have seen their guest revenue drop to almost nothing, perhaps getting a bit more back from locals.  But don't some of these courses have a revenue structure where one foursome of visitors brings in more revenue (say 1000 Pounds or Euros) than a member's annual dues?

Furthermore, most of the resort enterprises use golf as an attraction to fill their hotel rooms, host the events, fill their restaurants and drink their alcohol....all higher margin revenue lines than golf. All those related businesses suffered considerably from Spring 2020 through to Spring 2021. Sure, many are now booked solid, but the fear emanating from the Delta variant has already led to significant near-term cancellations across the hospitality spectrum.


Most well-run private clubs did reasonably well under Covid, but their guest and outing play, along with in-house F&B suffered. Smart clubs adapted swiftly and are reaping rewards with more engaged memberships and more interest from prospective members. Many, especially in the Southeast and Southwest regions have jacked up their initiation fees and dues accordingly.


As the owner of a well-positioned semi-private in New Jersey, we had a record year, but are already starting to see a distinct post-Covid demand softening. Our private club in NY continues to do very well with the event and F&B businesses returning and a reduction in round counts (net of weather-related) of 5-10%.


"Giddy....," maybe for speculative course developers and desirable private clubs, but hardly the case elsewhere. A consistent industry-wide boom with any mid-to-long term sustainability is far, far from guaranteed.

[Wayne_Kozun]

The thing that has been helped here in Toronto is that the golf boom during Covid has filled up memberships.  Prior to Covid almost no clubs in the city had a waiting list, but that isn't the case any more.  My club now has a waiting list, which we haven't had since about 2007.  This has been slightly helped due to a decrease in supply as a few private clubs in the city have closed due to the extremely buoyant housing market.  York Downs, Mandarin and Board of Trade are all being turned into housing and some other courses are under threat - Glen Abbey and Beacon Hall, but appearing to be remaining as golf courses.


Total revenue at the club has been off a bit due to no, or very little, revenue from weddings, charity tournaments, etc.

[Dave McCollum]

Thanks guys for your prospective.  For the most part it mirrors my own.  Apologies for not being more of a "thread master" to stimulate debate and nurture discussion.  I got busy with other things.  No worries.  Basically, what could be better than ask for advice from advisors and get it from only those who knew what they were talking about.  I was embarrassed to ask about the golf biz instead of some insight into some architectural topic.  But our voices are important. If we don't have places to play, what is there to talk about?           

[Tom Bacsanyi]

I would certainly look to plow that money back into the business with investments that make your operation more efficient and use less people, as the outlook for labor is dire.


Some examples:


If you are walk mowing greens and tees stop immediately and acquire a triplex.


Do you have a sprayer? Does it work? If not, acquire one. If you have one, buy another one. A solid PGR regime applied whenever you want saves a ton of mowing (fuel, labor, machine wear, etc.)


Do you have a roller? If not, acquire one. A pgr regimen with alternating mowing and rolling (mow one day, only roll the next) will help you attain the green speeds you want and generate savings as above.


How do you sell range balls (if applicable)? If it's still at the counter, buy a POS range ball machine to remove the human element from that transaction.