Golf Business Enters ‘Year of Reckoning’


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By John Steinbreder, Global Golf Post/Biz 

Casey Alexander does not see himself as a modern-day Nostradamus, the 16th century French physician and astrologer who also was regarded as something of a seer after the publication of his book Les Prophéties. But through his longtime coverage of the golf industry, most recently as the managing director for equity research at Compass Point Research & Trading, Alexander has come to understand the game from a business standpoint better than most. And he has as good a handle on what the future holds for the sport in 2023 as anyone in the game.

Who better, then, to do a bit of crystal ball gazing as we ease into the new year?

“The first thing I think when I look at 2023 is that it is going to be a year of reckoning,” Alexander said. “That’s because we are going to learn a lot more about the state of the game than we have in recent years, because we have not been able to accurately compare one to another. There has just been so much upheaval. Things were not normal in 2020 due to COVID, and 2021 was very erratic. As good as 2022 was in many ways, it had more than its share of ups and downs. But I expect 2023 to be a fairly normal year and one that we can actually compare to other fairly normal years.”

Few things bedeviled the golf industry in 2022 more than the supply chain issues that made it so hard at times to get product from factories to consumers.

“But many of those problems have been resolved from both materials and logistical standpoints,” Alexander said. “That means margins should improve if the industry sells more or less the same amount of equipment, which I expect it to. Among other things, companies will once again be able to ship product across the water instead of having to keep hiring airplanes to do the same job for a lot more money.”

Inflation certainly will be an issue, Alexander adds. But he believes the effect on the bottom line not to be too great, as companies pass those additional costs on to consumers through price increases.

Though Alexander considers 2022 to have been “an unqualified success,” he recognizes that things could have been even better had it not been for several periods of bad weather.

“In fact, it was one of the worst weather years ever,” he said. “We lost hundreds of playable hours to droughts, hurricanes, cold snaps and rain storms. My sense is that weather is not likely to be nearly as bad in 2023 and that there will be an increase in playable hours as a result, which will lead to an increase in rounds played. And that is good for everyone, from equipment and apparel makers to the people who own and run clubs, resorts and other golf facilities.”

As for the PGA Tour, which in Alexander’s words has been enduring a life-changing crisis with the emergence of LIV Golf, he sees it becoming a two-tiered circuit.

“One of those will be made up on the major championships and the elevated PGA Tour events, and they will all feature the top players as they also attract the most viewers,” he said. “As for the tournaments that have been deemed less important, they will suffer for a lack of both.”

Alexander is convinced that Topgolf will continue to lead the off-course entertainment segment, and by a lot.

“It’s the best embedded growth engine within today’s golf ecosystem,” he said. “I think that some of the other entries, such as the Puttery and PopStroke, will have some success by drafting off of them. But nobody is coming close to Topgolf. It has grown to a scale that allows it to be self-sustaining, and no one has the ability to spend the necessary capital over such an extended period of time to take them on.”

Alexander also marvels at how Topgolf keeps attracting such a young and diverse group of customers.

“Topgolf Callaway as a company is certainly benefitting from that growth in off-course golf entertainment, and so is the game itself,” Alexander said. “Think of all the people in that Topgolf demographic who are now being introduced to golf through those facilities. Think of how many of those are going to eventually take up the game. And consider that that number does not have to be a big percentage to bring real incremental growth to the game.”

The analyst sees golf travel continuing to pick up, even as new variants of COVID appear and airlines struggle with everything from inefficient baggage operations to the sort of out-of-date technology that is making reservation systems and flight crew assignments such a mess.

“We’ve seen great demand from golfers to get back to their old lives and get back on the road with their clubs,” he said. “And they are less inclined to let such troubles get in the way of doing that anymore.”

With regards to the equipment makers, Alexander expects that the rich will continue to get richer.

“And by the rich, I am talking about the Big Four, which are Callaway, Titleist, TaylorMade and Ping,” he said. “Together, they will keep dominating, much as they have for the past couple of decades. Every now and then, someone will come in from the side and try to take them on. 

PXG, for example. And now, that company is running commercials about new lines that are not as expensive as their old ones. They are doing that to try to gain relevance, and market share. But I do not see them or anyone else being able to overcome the financial advantage the Big Four has.”

It should be a very interesting year.



John Steinbreder is a senior writer at Global Golf Post as well as the course architecture and travel editor. He also covers the amateur game and regularly reports on the golf equipment industry. An award-winning journalist with some 40 years experience, he is the author of 20 books. Prior to graduating from the University of Oregon’s School of Journalism, Steinbreder studied at Franklin University in Lugano, Switzerland and the University of Nairobi in Kenya. He and his wife Cynthia have two daughters, Exa and Lydia, and live in Redding, Connecticut.
** The views and opinions featured in Golf Business WEEKLY are those of the authors and do not necessarily reflect the position of the NGCOA.**

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