Monday, March 26, 2012

The Week That Was, march 25, 2012

united states The Closings Accelerate

If you believe the U.S. golf business has stabilized, you might want to reconsider: The inventory of golf courses in our nation shrunk dramatically last year.

Since 2006, according to the National Golf Foundation, our industry has lost 358.5 “18-hole equivalent” courses. By my math, this works out to a net reduction of roughly 72 courses a year in each of the past five years.

In 2011, however, the number of closings hit 157.5 -- more than double the number that might have been expected. The net reduction amounts to 138.5, when the measly 19 courses that opened during 2011 are taken into account.

From the NGF’s perspective, this is welcome news.

“The slow correction that is now occurring is very much overdue and necessary, to help return the golf course business to a more healthy equilibrium between supply and demand,” says Joe Beditz, the group’s president, in a press release.

Of course, the owners of the courses that have gone belly up may not see things quite so dispassionately. One man’s “market correction” is another man’s retirement savings gone kablooey.

And while this gradual shrinking of the market may translate into greater profits for existing courses, it sure doesn’t lay a solid foundation for the industry’s long-term health. The NGF’s research indicates that most of the recently shuttered courses are public tracks with low greens fees -- in other words, cheap-to-play courses where juniors, beginners, and average-income hackers typically gather. How can we create a thriving business when we diminish the supply of venues that introduce golf to future generations?

All in all, the NGF’s numbers-crunchers say, over the past five years the United States has lost 2.4 percent of its total supply of courses, and they predict that further reductions are on the horizon. But the way the NGF sees it, these are signs of good things to come.

“The outlook for golf remains slightly positive,” Beditz concludes, “with a stabilization of demand likely in the near term and slow growth likely in the longer term.”

I want to draw your attention to Beditz’s ominous hedging. In order to make a one-sentence comment about golf’s “slightly positive” future, he had to use the word likely twice. Inspires confidence, doesn’t it?

What the NGF is saying is that we can all look forward to a few more down years followed by decades of lean years. I don’t know about you, but I can hardly wait.

And in Other News . . .

. . . maldives For those ardent travelers who can’t wait for the opening of the much-discussed “floating” golf course in the Maldives, an alternative has emerged: A nine-hole, par-3 track is scheduled to debut this week at the Shangri-La Villingili Resort & Spa on the southern part of Villingili Island. The course is the island nation’s second, joining a six-hole track at Kuredu Island Resort on Lhaviyani Atoll. Although the course at Villingili certainly isn’t destination-worthy -- a report from Golf Today suggests that it was designed by someone at Shangri-La Hotels & Resorts -- people are clearly finding reasons to visit the Maldives. A record number of tourists -- 931,000 -- made their way to the place last year, and over the past decade its tourism arrivals are said to have nearly doubled.

. . . australia After more than a decade of trying, the 400-odd members of Maleny Golf Club have secured permission to build an easy-to-play, nine-hole golf course. The track will be part of a community that’s taking shape on a municipally owned, 300-acre parcel in Maleny, Queensland. (If you’re wondering, it’s 12 miles west of Maroochydore, 80 miles north of Brisbane.) The club, which currently operates a driving range on the property, has tapped Graham Papworth of Hastings, Australia-based GNP Golf Design to design the golf course, which could someday grow to 18 holes.

Some information in this post originally appeared in the February 2010 issue of the World Edition of the Golf Course Report.

. . . china I can’t decide if China these days reminds me more of limbo or the second act of Waiting for Godot. While the central government hasn’t yet lifted its moratorium on golf construction or issued those long-awaited regulations on development, projects in the People’s Republic are nonetheless being approved, construction is taking place, and new courses are opening. It’s counter-intuitive, I know. Here’s how Brian Curley explained the situation in the current issue of Asian Golf Business: “Things are much slower as far as construction goes, but we are still producing plans and signing new deals. This has us optimistic about the future, but there’s still an unknown time frame associated with the slowdown.” The Scottsdale, Arizona-based architect knows there’s no upside in predicting the future, but he gamely ventured a guess. “We expect a slow first half of 2012,” he told the magazine. “From there, it could be crazy busy or a continued slow pace. You never know.” No, you don’t. And that’s why China has become a giant blur for the world of golf.

. . . wild card click You can never have too much of a good thing.