Saturday, January 7, 2012

worth reading Golf 2012: Where Do We Stand?

Don’t look now, but the U.S. economy continues to improve. The jobs picture has brightened, auto sales are increasing, home builders’ sentiments are improving, and consumer confidence is growing.

But what about golf? Is our industry also poised to rebound, or will it remain stuck where it’s been for well over a decade, in a no-growth economic morass?

Just before Christmas, Larry Bohannan of the Desert Sun addressed the state of the golf business in Southern California’s Coachella Valley. Among his conclusions: There is an upswing in play at public and resort courses in the desert, but many private clubs continue to struggle with declining membership and plunging real estate values.

Bohannan’s article makes several noteworthy points about the U.S. golf business, at least as it operates in Southern California. Here are three of them:

When golf gets sick, the pain spreads everywhere. Golf’s struggles in recent years, from a declining number of players to bankruptcies and foreclosures on public and private courses alike, do more than hurt golfers.

The California Alliance for Golf trade association . . . released a 2008 economic report estimating the game produces $7 billion in direct revenue and $17 billion in indirect revenue, such as retail sales and taxes for the state.

A new report may be compiled in 2012, and [Tom] Addis [of the Southern California PGA] said he's sure the numbers will be down from 2008.

“It's been a huge impact on all of Southern California, from employment to payroll taxes,” Addis said of the economic downturn that has hurt golf. “That’s how important golf is to California, particularly in the Coachella Valley, where, what, 85 to 90 percent of the economy is related to golf in some way.”

“It’s not just our business. It’s everyone,” said Joe Williams, director of golf at the city-owned Indian Wells Golf Resort. “It’s hotels. It’s restaurants. Everyone has been hit. It will take some time to come back.”

Where will future growth come from? Increased rounds of golf would be a reversal of local and national trends. For 2010, the nonprofit National Golf Foundation reported a 2.3 percent drop in rounds played across the country from 2009. But the drop was 3.8 percent in the Palm Springs area, the NGF reported, and 5.4 percent down for all of California.

“Golfers are still playing, they are just paring it back,” said Neil Finch, owner of the daily-fee Indian Springs Golf Club in Indio. “They have less money to spend.” . . .

It hasn’t just been that golfers are playing fewer rounds, but that there are fewer golfers. The NGF estimates that in 2005 there were 30 million golfers in the country, a golfer being anyone at least 6 years old who plays one round of golf a year. In 2010, that number dropped to 26.1 million.

The future is now. There are signs -- some small and some larger -- that the game of golf might be rallying after four or five years of fewer golfers, less revenue, and more golf courses filing for bankruptcy and even closing.

“It seems like the courses are saying they are having a better start to the season than they have had in a few years now,” said Addis. . . .

But as positive as the signs might be at desert golf courses these days, Addis knows too many public and resort courses are still struggling with razor-thin profit margins while trying to retain golfers or attract new players.

“It can’t just be the PGA taking action. It has to be the operators, golf course owners,” Addis said. “We have to say, ‘We are in dire need. We are in survival mode.’ Otherwise, it’s not going to work.

“I do feel that everyone is going to come together to do this,” Addis added. “We have to come together, or we are not going to survive.”