There has been a lot of good news lately about private equity coming back into the golf market. Peter Nanula’s Concert Golf Partners, Tom Bennison’s Fore Golf Partners, and Pinnacle Golf Partners have all recently announced intentions to acquire a substantial number of distressed properties. These players join established operators like ClubLink, ClubCorp and Century Partners as active buyers in the golf industry.
There have been good years and bad years for the golf industry over the past two decades. But rarely does a banner year follow a dismal year, or vice versa. Our industry tends to follow the larger trends in the world, and move at a slow and deliberate pace.
So, in prognosticating the next year, it is primarily a task of reading the winds, and then using the past to help foretell the future.
I was reminded recently of a well-known poem that has been attributed to Robert Dedman:
A club is a haven of refuge and accord,
in a world torn by strife and discord
A club is a place where kindred spirits gather
to have fun and make friends
A club is a place of courtesy, good breeding and good manners
A club is a place for camaraderie, merriment, good will, and good cheer. It humbles the mighty, draws out the timid and casts out the sorehead
Golf course foreclosures or near foreclosures continue to dominate the headlines. Without question, they have fueled sales and helped more than a few management companies grow fat.
Almost three years after the economic collapse, one would think that most poorly performing courses would have worked their way through the system. But economic indicators are confusing:
The private club industry is facing its most acute membership crisis in a generation. Studies show that 40 percent of the nation’s 4,415 private clubs have seen a membership decline, with initiation deposits down by 43 percent. An estimated 10 to 15 percent of clubs are in serious financial trouble, with many turning to third-party management or opening up to public play.
Golf course foreclosures and distressed sales are continuing at a brisk pace. One thing many of these courses have in common is that they had recently renovated the course or clubhouse. They took on debt with the hope that it would lead to increased rounds or membership. But it only led to financial struggle.
Despite this history, other golf courses continue to announce planned renovations, spending anywhere from $500,000 to more than $3 million. Many are moving forward with the hope that increased revenue will justify the expense.
Can a new association that promotes alternative rules save golf?
Many today feel that USGA’s rules stifle creativity and depress play among beginners. The Alternative Golf Association, through its Flogton project, hopes to set the rules of 'golf for the rest of us.’
We got a lot of comments on the Winter issue that features a profile of Donald Trump. And while many think he is bad for the game — including one of our own editors — the celebrity golf course owner makes a convincing pitch that he is the best success story in the game at this time.
Trump has made a business out of buying up good courses in great locations and then making them “phenomenal,” to use one of his favorite terms. Of course, to make such a strategy work, you need cash — which Trump is flush with thanks to his television show and other real estate holdings.
China seems to be the fastest-growing golf market in the world. Despite the fact that data is hard to come by, we have heard reports that as many as 1,000 new courses will open over the next few decades.
We at Golf Inc. have a history of making predictions. It started with our very first issue in 1991 when founder Alan Crittenden warned that NGF’s bold call “to build a course a day” could lead to blood in the streets.
We don’t always get them right. But then, they would not be “fearless” if we did not go out on a limb every now and then.
We are currently putting together our predictions for 2011 — foreclosures will double in 2011. Greens fees will increase. The sizzle in golf development will leave China and move to India.
