How low will golf development go?

Rating: 
No votes yet
As anyone remotely connected with the business side of golf knows by now, the 2008-09 economic recession/housing meltdown dealt the golf course development industry a major blow. Already in a downslide because of the overbuilding that marked the late 1990s and early 2000s, course construction numbers fell even further in 2009 and it looks like they won’t get up – at least for the foreseeable future.
 
According to the National Golf Foundation, which tracks course building in the U.S., just 49.5 courses (in 18-hole equivalents) were opened in the past year. That represents a further drop from the 72 in 2008 and 113 in 2007. And it’s down a whopping 87.6 percent from the peak of 398.5 openings in 2000.
 
Conventional wisdom holds that lower construction numbers in the long run are good for the industry overall. With rounds played remaining flat, more courses added to the supply will only mean fewer rounds for each facility. But try telling that to the golf course architects, contractors, irrigation contractors and other vendors who depend on course development projects for a significant part of their business. 
 
Our 2009 State of the Industry survey found that 58 percent of those responding believe that it will be 2014 or beyond before the course supply begins growing again.
 
Do you believe that an oversupply of courses still exists in the U.S.? Is it a positive for the industry that the number of course the number of closures has exceeded openings for the past four years? What does this mean for the overall business of golf?
 
We’d like to hear your opinions.

  

Comments

There is an oversupply of courses is some areas, particularly in the mastered planned communities. Golf in the future will be designed and delivered in a different package with more 6,9 and 12 hole courses. Time to play, cost to build, cost to maintain are the design considerations and criteria of the future.

Future openings for the average golfer in urban/suburban areas must provide alternatives to the tradition of nine-hole increments. These new facilities must provide three hole increments for a golf fix/experience that fits in a short time frame. We also must realize that many of the game's traditions are hampering play: hole/cup size and hole length. The more new golfers are putting for birdies (shorter holes such as promoted with USKids/PGA Family Tees) and are able to make the putt (larger cup/hole size) the more fun they will have and the more they will play. And all that will increase demand and the need for more facilities.

One could say there is an over supply of golf courses or more appropriately an UNDER SUPPLY OF GOLFERS. I have a list of 500 golf courses for sale on my desk and have several common elements. These courses are older(+30yrs), rural locations, lengths under 6,000 yards. The loss of these courses will not shift rounds to other existing courses. If anything they will reduce the number of new entrants to the game. There will be no rebound until baby boomers re-fill their nest eggs, retire, and return to the course.

Joe, Are you a gc broker by chance?

While it is true that new design opportunities based on residential development are down, there are still project opportunities that exist. Renovations are still being seen, and any new development opportunities that exist are carryovers or projects that have been on hold or are partially complete. It is my opinion that golf still has a place in the development arena as an ammenity but that it will show up in other areas than housing and will potentially be a different product, not necessarily the traditional 18 hole facilities.

I feel that the current struggles of many courses and developers results from a number of different factors:(1) A poor overall economic environment that lowers demand,(2) many golf courses are in areas that do not have the proper golf population to support them, and (3) a decrease in the amount of people taking up golf as a hobby Many of these factors are correlated with one another, but the fact remains that as of right now, there is excess golf supply. Unfortunately, anyone in the business of building golf courses right now is going to struggle to make a dollar for quite some time. You individuals have my sincerest thoughts and prayers behind you.

To Kevin Coombs, I cetainly agree with the 1st part of your comment. I am a member of the Cliffs Communities (even though I still live in the Chicago area) and the new Tom Fazio course (Keowee Springs) is a set of three 6 hole rotations. So we can play 6, 12 or 18 depending on our time availability. Kevin, I'd disagree with you on enlarging the size of the hole/cup. Keep the traditions and challenges of the game the same. Hole length can easily be addressed by multiple sets of tees (although players don't seem to be willing to play the tees that are best suited for them....a different problem) Regarding economics, I pretty much agree with Mr. Jemsek (and all of us golfers here in the Chicago area know of the Jemsek family)that maybe some of these 500+ old courses should be allowed to "die" as they no longer fit the needs of the majority of the golfing population. Where I would ask questions is twofold: 1). Are all golf course owners / managers / municipalities / etc. being as financially frugal as possible? I understand this may be a very, very difficult task, but maybe there is a niche out there that can help the industry implement operational, financial, and managerial best practices to get us all through to 2014 as the "State of the Industry" survey said. 2). Attracting new golfers should continue to be a top priority. Many of the recent initiatives (Play Golf America, etc.) have helped. But we all need to do more. It will be a very interseting few years as we start this new decade. But the game will survive. We all fell in love with it for our own reasons. And our children and their children will do the same. This is the Greatest Game I know.

Add new comment

By submitting this form, you accept the Mollom privacy policy.
If you enjoyed this article and would like to sign up for a FREE digital subscription, click here!