Monday, January 2, 2012

The Week That Was, january 1, 2012

talking points Gary Player, the Guarded Optimist

Gary Player is feeling confident about the prospects for golf development and construction in 2012.

“It seems to me that we have hit bottom, and things are slowly starting to improve,” the South Carolina-based architect says in a statement posted on his website.

While I generally share this point of view, allow me to cynically note that if we’ve hit bottom, there’s nowhere to go but up. That being said, an industry starved for good news -- me included -- is most certainly hoping that Player is reading the tea leaves correctly.

In particular, Player’s spirits have been lifted by evidence of economic improvement in the United States and “the apparent stabilization of the European debt crisis.” These and other factors lead him to conclude that the global golf market “could be on the rebound.”

The development hot-spots that will drive future growth, Player believes, are Asia, Russia, and Brazil. He singles out India as having “a huge potential for growth,” but, perhaps significantly, doesn’t mention China. In addition, he thinks that dormant projects in the Middle East and Africa will be revived “when the political unrest settles,” but he offers no predictions on when that might occur.

As for the United States and Western Europe, don’t hold your breath. In lieu of new construction in those regions, Player foresees only “course re-designs and improvements to existing facilities to encourage membership growth and real estate sales.”

Player’s bottom line: “I don’t expect to see meteoric growth in real estate development projects, like we did in the late 1990s and early 2000s, but I am definitely encouraged.”

Yes, I wish Player was able (or willing) to make more definitive statements. But as we all know, when you go out on a limb, you run the risk of getting chopped.

And in Other News . . .

. . . united kingdom As evidence of improving fortunes in golf, Player cites a recent survey suggesting that better times are ahead for golf clubs in the United Kingdom. The survey, conducted by a British accounting firm called A4G, determined that over the past year 46 percent of the responding clubs have grown their memberships, 48 percent have sold more rounds of golf, and 71 percent don’t have any cash-flow problems. “The results show that not only are things nowhere near as bad as many people like to think,” A4G’s managing partner concludes, “but that with some pretty simple actions, club managers and decision-makers can start to turn things around and get the kind of results they need to survive and prosper.” This sounds pretty self-serving to me, seeing as how A4G is in the business of selling solutions to struggling companies. Besides, based on these statistics, while the U.K.’s clubs may appear to be “doing better,” they aren’t necessarily doing “well.” After all, couldn’t one easily conclude that 54 percent of the responding clubs haven’t been able to grow their memberships, 52 percent haven’t been able to sell more rounds, and nearly three of every 10 are experiencing cash-flow problems? In order to judge the value of A4G’s results, I need more context. As Mark Twain once said, “There are three kinds of lies: lies, damned lies, and statistics.”

. . . scotland Happier days may be on the horizon for the U.K.’s existing golf clubs, but that doesn’t mean many new clubs will be built in Scotland anytime soon. The Scottish Golf Union has taken its measure of the nation’s golf business, and it’s broadcasting its verdict loud and clear: Golf construction must cease immediately. The union’s cease-and-desist order is an effort to maintain a balance between supply and demand, as Scotland’s inventory of golf properties has increased by 20 percent since the early 1990s while the number of golfers has remained flat. “Scotland does not need more courses,” reads a statement from the union. “Instead, investment in existing facilities and innovative programs is necessary to introduce new players and retain existing players.” Donald Trump may not be listening, but my guess is that other developers are. The union intends to publish a full report on the state of golf in Scotland later this year.

. . . united states In this space last week, I singled out Detroit as a market that might be on the verge of a comeback. This week, the Washington Post provided additional evidence, as it identified the Motor City as “a rare bright spot in the nation’s still-abysmal housing market.” Detroit is one of just two U.S. cities that registered housing price increases last year, says the Post, and, believe it or not, “bidding wars are breaking out over desirable homes.” Not surprisingly, the revival has been sparked by the resurgence of the auto industry, which is on track to post another banner year. “Jobs are coming back,” concludes a policy analyst at the Brookings Institution. Let’s not get giddy, however. Thousands of houses in the Detroit area have been abandoned, home prices are still 40 percent below their pre-recession highs, and the city’s government is on the verge of bankruptcy. Still, if things are looking up in Detroit, that’s saying something.

wild card click A toast to 2012!