A look at the golf industry

This past May, the National Golf Foundation provided up-to-date golf industry information during its annual State of the Industry presentation near Philadelphia. I thought it would be a good idea to summarize the findings. Results may vary from state to state, but this is a good snapshot.

A legislator gets tips at Michigan Golf Day

Overview
The first order of note is that the NGF says golf is not in a steep decline. This may go against what you are hearing and reading in various media outlets. While it's true that golf participants have declined by 19 percent since peaking in 2003, the NGF indicates participation has stabilized, post recession, for the past three years.

Golfers classified as "committed" (those who are regularly playing the game) have stayed steady. Nearly 21 million of the estimated 25 million golfers fit in this category.

While various ideas and concepts have been implemented to introduce more people to golf, the biggest concern for new golfers is becoming comfortable and competent on the golf course. The NGF notes that these two areas are the most significant drivers.

Understanding factors that affect participation are important. Since 2007, golf is not the only activity that has realized a participation decline. Bowling, saltwater fishing and tennis have seen participation declines at or higher than golf. In fact, you could argue that golf is faring pretty well compared to other activities.

Latest data tracking indicates 3-4 million people take up golf each year, with the same number of people exiting the game.

Rounds
The number of rounds played annually is dependent upon numerous factors. While interest in the game is an important metric, so is weather. In fact, much of the slow start to rounds played in 2013 and 2014 can be attributed to late spring starts in many areas of the country. In 2013, rounds were down 4.5 percent through March. In many northern climates, golf courses did not even open until May. In addition, many of these areas have endured a very wet spring and early summer. In fact, many areas of the Central Plains have experienced the wettest start to any year ever recorded.

Golf courses
Arguably, there have been too many facilities and not enough demand since the peak of the industry around 2006-2007. A natural market correction is taking place. In 2013, 157 facilities closed. There are projections of another 150 or so courses closing each year between 2014 and 2017.

While course closures have increased, course openings have decreased. In 2000, 399 golf courses opened -- the peak. In 2013, 14 courses opened. In fact, from 2011 through 2013 (3 years), only 47 courses have opened. Accurate measurements of course openings began in 1985.

At the end of 2013, the NGF notes there were 15,516 facilities. At the peak, there were just over 16,000 facilities in the early 2000s.

Industry spending
Golf equipment sales continued a recovery in 2013 from the biggest dip in 2009. Sales peaks were realized in 2007. 2013 numbers are in line with figures from 2002, when the sales index was started.

The premium golf ball market spending has been holding steady the past several years. A peak was seen in 2006.

Facility budgets
According to NGF tracking, higher-end maintenance facility budgets have been less affected by recession than average lower-end facilities. Higher-end facilities continued to slowly add to their budgets in 2013, while mid and lower-end facilities continued to keep the belts tight.

Purchasing of turf maintenance equipment has dropped since the back half of the recession, however a modest improvement in mid/late 2012 preceded a slight dip last year.

Consumer confidence
The NGF indicates that golf is slowly coming back, but should be further along. The consumer confidence index stands at 80.3 (May 2014). The index bottomed out in early 2009 at 25. An index value of 90 is considered normal for non-recessionary periods.

Consumer spending is showing a slight increase.

Summary
It will be important to support initiatives that keep committed golfers enjoying the game, while finding new and essential methods to introduce new people to the sport. There are various initiatives being implemented across the country. Many are being introduced to schools, and others with adults, specifically women.

We will continue to monitor industry trends and appreciate your feedback.