Road Hole Shorts

Golf Design, golf, golf, GOLF

Guest commentary: Golf’s business future appears cloudy

By Mary Armstrong/For the Sun-News

Posted: 09/08/2011 07:37:15 PM MDT

 

As the 10th anniversary of 9/11 approaches, many of us are reflecting on how our lives have changed since.

Whether that fateful day directly resulted in the society, economic conditions or government that we have today is debatable. Nonetheless, that date and the events associated with it will forever be a marker in time for Americans if not the world.

Professionally, in 2001, I had 14 projects come into my golf design office. That followed years of 18 and 17 in 1999 and 2000. The last year I was in New Hampshire, only three project potentials came through my door, but that was an improvement from 2008 when there were none. Last year I had two projects, although I continued to do a small amount of work for clients that came to me years ago. As for design fees, well let’s just say I’m making about five percent of what I made in 2001. I mention this only to let you know how deeply the economy has cut into the golf business.

With regard to the number of golfing facilities, in the decade ending in 2009, 1,083 golf facilities closed, amounting to 800 18-hole equivalent (18HEQ) golf courses. Ninety-three percent were public facilities. Of those, 85 percent had green fees of less than $40 each.

During that period some new courses were built, resulting in a net gain of about 500 18HEQ. The gain was largely due to the golf boom of the 1990s which wound down early in this century. Meanwhile, 66 percent of the new facilities had green fees of more than forty dollars.

What do we conclude from this data? It’s pretty clear that there is a replacement cycle that features replacing low-cost courses with facilities that favor the high end of the market. What’s more, 60 percent of the new course openings were at facilities which were associated with real estate or resort developments. While the National Golf Foundation’s report doesn’t clearly define a correlation, I believe that real estate and resort courses are developed in an attempt to create a market demand rather than address the market demand. And I therefore conclude that these types of facilities are driving the cost of golf through the roof. Meanwhile, our economy continues to decline. Since the national average wage index was first calculated in 1951, annual wages steadily increased through the 70s. Since 1980, average wage increases over the decade began declining. In the 1980s wages increased by only 60 percent, followed by 44 percent through the 90s and finally during the last decade that ended in 2009, wages increased by only 26 percent. However, the most alarming correlation comes from the change from 2008 to 2009. During that period and for the first time since records were taken, average wages actually declined from 41,335 to 40,712 and I wouldn’t be surprised to see that wages dropped again in 2010.

If you look at the history of the golf business, there was a small boom in the 60s – nearly all the new courses addressing a growing market of middle class golfers. During the 70s, developer’s discovered that an adjacent golf course was not only an amenity, but also a feature – a beautiful landscape that people viewed as an extension of their own yards. In fact, most people that bought these golf “view” lots weren’t golfers at all. This sometimes resulted in conflicts which occasionally led to court cases over property rights and access. Despite this, the percentage of real estate and resort courses grew quickly and by the 90s as many as forty percent of new courses were associated with real estate projects.

While there is no statistical correlation that has been offered by anyone that I can find, it is pretty clear that real estate’s use of the golf business has lead us down the primrose path. What can we do about it? Despite the efforts of organizations like the National Golf Foundation, getting the golf business to do anything is a little like herding cats. If the statistics on facility openings and closings were the other way around, we could say that the market was wresting control. That’s not happening yet and it may never happen. If it doesn’t, the golf business will be headed for a long slow death. I remember in the 90s hearing complaint after complaint that financing for golf courses was difficult to find. It seems that banks could more easily see golf courses as a financeable entity when it was part of a real estate project. This mentality is seen in renovation projects as well. A private club is far more likely to finance a new Clubhouse or remodeling than they will a renovation to their golf course. Soil and turf over bricks and mortar is a difficult concept to sell, yet sell we must because people join golf clubs for the golf and camaraderie rather than luxurious Clubhouses and dinner service.

I hate to say it, but I’m not holding my breath. The world, she is a changin’, but not in a way that benefits the golf business so far as I can see.

A golf architect in New Hampshire for over 20 years, Armstrong brought her craft to Las Cruces in January 2010. She is the founder of Armstrong Golf Architects, which provides planning, designing, permitting and construction monitoring services for golf course projects. You can comment on her writing and view past articles at her blog: https://roadholeshorts17.wordpress.com/.

 

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