Golf’s unprecedented boom

From COVID-19 closures to record rounds of play

What a turnaround. More than half of America’s courses were closed in March and April because of COVID-19. The ones that were permitted to operate faced limited tee times and other restrictions to ensure that golfers were social distancing. As a result, according to the National Golf Foundation (NGF), U.S. daily-fee courses lost 20 million rounds, which translated into a loss of $1 billion in green fees and cart revenues alone. 

It looked like a dire time, indeed.

But fortunes changed dramatically as golfers and governments realized golf was a relatively safe sport in the pandemic. The game is played outdoors on big, open spaces, after all. Rounds improved in May, and June and July were off the charts. 

“This two-month rebound has allowed us to climb from a 16% (year-to-date) deficit on April 30 to now a 3% lead over 2019,” wrote Joe Beditz, president and CEO of the foundation, in a recent letter. “Seems almost inconceivable given the loss of 20 million spring rounds from course shutdowns and virus-related anxieties. And the good news is likely to keep coming. Several golf course management companies have told us that August has been almost as good.”

Rounds in July were up 20% from the previous July, a record-setting achievement. 

“To have a jump this significant during a high-volume summer month is unprecedented and reflects approximately 10 million more July rounds versus a year ago,” Beditz wrote. 

The rebound was so strong that the industry made up for the forced closures of the spring, according to Golf Datatech and the NGF. 

“Our latest year-end forecast has us up 2% to 6% year-over-year.” Beditz wrote. “Consider this: We haven’t seen more than a 5% YOY increase since 2012 (during that surreal winter heat wave).”

He said the pandemic hit at a good time for golf, when most courses were open but not at the height of their seasons. He said that while courses may still be seeing low numbers in outings revenue and food & beverage, other areas look good.

For example, retail sales of golf merchandise hit a record high in July, with some manufacturers unable to keep up with demand.

After more than a decade of declines in play and participation, who could have imagined that a pandemic would revitalize U.S. golf operations? 

Bloomberg has declared that golf is experiencing “a renaissance moment,” and Seth Waugh, CEO of PGA of America, said he thinks the pandemic could be “a real growth opportunity for the game.”

With demand peaking, Jay Karen, CEO of the National Golf Course Owners Association, reports that green fees at most public courses, which have for years trailed increases in the Consumer Price Index, are rising. Better yet, golfers aren’t complaining.

“Some (course) owners have told me that they’re hitting their budget targets in spite of the COVID troubles,” Karen said. “Some have even said that they’ve exceeded their budgets.”

What can’t easily be recovered is the money that disappeared when course owners were forced to close driving ranges, limit or discontinue food & beverage operations, and cancel tournaments and special events. 

“At the end of the day, revenues are all that matter,” said Jim Koppenhaver, president of Pellucid. “Nobody takes rounds to the bank.”

Long term, it may be hard for owners and operators to sustain the recent surge, just as they couldn’t sustain the boom that Tiger Woods sparked in the late 1990s. Most observers are confident that core golfers will post their usual numbers this year, if not a bit more, and that the industry can squeeze some additional play from lapsed golfers who’ve returned to the sport. But if history is any guide, most of the newcomers who’ve been filling tee sheets may eventually be discouraged by golf’s difficulty.

“We’re seeing people come to the game for the right reasons — for exercise, for social interaction — so we stand a good chance of keeping them around,” Karen said. “I’m optimistic, but I’m reticent about looking into a crystal ball. Nobody knows what the next six months will bring.”

Beditz said there has been a swell of beginners and young people playing golf. The number of golfers between the ages of 6 and 17 is up considerably from prior years.

“Our current best estimate is that we could see an increase of half a million junior golfers by year’s end (+20%),” he wrote. “The question, as always, is whether we’ll be able to convert these fresh faces into committed customers.”

The increase in juniors and other beginners has been offset by a drop in older golfers, who presumably are staying away from the course for health reasons. 

“Overall, we don’t see big movement on the number of golfers,” Beditz said.

He said total numbers were up slightly from the 24.2 million golfers projected last year.

Yet, while courses continued to ring up rounds like never before, a significant number also contended with COVID-19 flare-ups that cost both time and money. The battle was being fought daily with thermometers, masks, soap and sanitizers. Many public and private venues were forced to close temporarily as employees and/or members tested positive.

By the end of July, at least four dozen properties had been affected by closings that lasted from one day to three weeks. 

“There’s a tremendous amount of COVID out there,” said Peter Nanula, CEO of Concert Golf Partners, which owns 22 private clubs. “If a club has, say, 500 members and 100 employees, it’s hard to imagine that 50 or 100 or them won’t be infected by the time the pandemic ends.”

Flare-ups were reported at clubs in more than 21 states, and occasionally the size of a flare-up was staggering. In June, 67 employees of Ansley Golf Club in Georgia reportedly tested positive. Nearly two dozen people who attended a pair of tournaments hosted by The Club at SpurWing in Idaho did likewise.

Of course, those numbers are the exceptions. Most of the time, properties suspend operations because one employee or member tests positive. But one confirmed case demands further testing, which sometimes reveals others.

One case led Stock Farm Club in Montana to find seven others. One case at Mountaintop Golf & Lake Club in North Carolina grew to 11.

Even small flare-ups, however, can trigger domino effects that affect golf operations. When Eau Claire Golf & Country Club in Wisconsin learned of a possible positive test, it had to send almost all of its kitchen and administrative staffers into quarantine. More than half of the staffers at The Peninsula Club in suburban Charlotte, N.C., reportedly stayed home for a few days upon learning that several members had tested positive. Five employees reportedly left Warwick Hills Golf & Country Club in Michigan, angry that they weren’t promptly informed when one of their colleagues tested positive.

Needless to say, it’s difficult to track how infections spread. Invariably, owners and operators believe that employees and members who tested positive caught the coronavirus elsewhere — at a party maybe, or a hair salon. 

“I’m not aware of any cases where people have gotten infected at a golf course,” said Steve Skinner, CEO of KemperSports. “We can defend our properties, but we can’t defend against someone who brings it from somewhere else.”

Although Concert Golf and KemperSports have been following government-approved guidelines such as deep cleanings, temperature checks, social-distancing and reduced capacities, they’ve learned that the coronavirus is a tireless invader. Concert has seen flare-ups at properties in Florida, Georgia and Indiana, while Skinner reports a dozen confirmed cases among employees at 15% of KemperSports’ 63 public venues.

Other management companies have dealt with cases as well.

Troon Golf has reportedly had cases in California (Castlewood Country Club) and suburban Detroit (Knollwood Country Club).

One ClubCorp employee has died from COVID-19, and the company reportedly had members test positive at two properties in California (Indian Wells Country Club and Old Ranch Country Club) and a staffer test positive at Oak Pointe Country Club in metropolitan Detroit.

Skinner said the lack of easily available testing has been a major frustration, as it prevents KemperSports not only from distinguishing actual infections from false alarms but also from quickly stopping the spread.

“The big issue,” he said, “is the availability of testing and the time involved in getting the results. In some markets it can take 24 hours, but in others it can take six or eight days. ”

Skinner compared coronavirus-related closings to rain days when it comes to their impact on KemperSports’ bottom line, saying the effect has been negligible.

Nanula said he hasn’t calculated how much Concert has spent to prevent outbreaks and address flare-ups, and he doesn’t much seem to care.

“We don’t really think about it, because it’s just a short-term economic hit,” he said. “It’s the right thing to do.”

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