I recently began my tenth year as the chief executive of NGCOA and my twenty-ninth year in association management. In most days and weeks in this profession, we are focused on what’s directly in front of us. What dragons need to be slayed today? What new things are happening in the world that course owners and operators need to know about? I have noticed something different lately, though. I’ve started thinking and talking a lot more about long-term trends, impacts, trajectories, and possibilities for the business of golf than about what might happen next year (although I do that too).
I’ve personally witnessed three decades of ups and downs in the industry, and there are many people at NGCOA who have seen much more than those three decades. Imagine going back in time to the 1970s and seeing what golf was like. To the 1950s. The 1920s. Would people in the golf “industry” (not sure they would have seen this as an industry back then) in 1925 have any vision or concept of what golf would become? There is little chance 100 years ago that people would have imagined over 15,000 courses sprinkled around America, and that most of them would be privately-owned public places. One hundred years ago, courses were likely either private or municipal. Furthermore, no one would have imagined digital golf courses appearing on screens in golf simulators or virtual reality.
These days, because the pace of change seems to be accelerating in our society, we often limit our planning and foresight exercises to what may happen in the next three to five years. Strategic planning beyond three years feels like an anomaly, a throwback to when the world at least seemed more predictable and reliable. Most businesses don’t think about the next fifty to one hundred years. But I like to think about long arcs of time and what has changed or what may change. One of the golf stat graphs I seem to keep thinking about displays the supply-and-demand lines over the past twenty years. Things have changed—a lot. In short, supply has been ebbing while demand has been flowing. The relationship between supply and demand has finally been our friend.
But supply and demand can be funny things. Demand can exist without supply. For example, I would love a Chick-Fil-A to be located on Daniel Island, South Carolina, where I live. Demand is there (trust me), but the spicy chicken sandwich (no pickle) is not. Sad. In golf, much of our demand happens because a golf course is simply around the corner. Someone took on great risk and built that course. Maybe as a young person, you drive by this beautiful parkland-looking place. You see people enjoying themselves. You know people who play golf there. Your curiosity turns into demand, and you can thank the golf course’s existence and proximity for that.
Imagine a day, though, when that golf course—and others like it—are no longer around. They aren’t there for you to drive by or “bump into” due to proximity, because they are now long-term care facilities, multi-family housing developments, corporate complexes, etc. If you’re someone who could not care less about golf, this is no big deal. If you have a love for the game, this is a sad vision, right? In a strange sense, the closure of these courses may actually represent the American dream. If an American dream is to build a successful business and eventually sell it, then I can see being happy for whoever once owned the golf course. A developer offered that owner ten million dollars for one hundred and eighty acres, which was only worth two million dollars as a golf course. As my friend Dr. Joe Beditz has said, “the dirt was worth more than the grass.”
Data from the National Golf Foundation indicates that the supply of daily-fee, public golf courses in America has decreased nearly 20% in the past twenty years, and daily-fee golf represents the majority of course closures. Let’s carry that trend line forward into the future, shall we? It’s easy to imagine and foresee the continuing closure of daily-fee golf courses, despite the recent financial successes of our industry. Developers often want large tracts of land near population centers, and golf courses fit the bill. Municipal courses and private clubs are not low-hanging fruit for picking by developers. In fact, the number of municipal facilities has risen by 15% over those same twenty years. Thus, it would be families, LLCs, single proprietors, and other entities that own courses which would probably take the call from someone making an unreasonable offer to buy the land. And land is something we are not making more of, so it’s easy to see this trend continuing. There is a reason no daily-fee courses are being built these days—it just doesn’t pencil. If the daily-fee supply continues to contract, where will Americans play our golf?
Enter the picture: screen golf! According to the NGF, the number of golf simulator “joints” around America has exploded, counting over 2,200 at this point. The total supply is up nearly 25% over prior year. As you consider that, think about South Korea, where there are approximately 500 green-grass golf courses and over 5,000(!!) “golf cafes” with simulators. That’s a ratio of ten-to-one. These are your local, neighborhood spots to play games and beat balls into a screen. It’s where most kids learn to play the game. I would imagine that for many Koreans, golf begins and ends indoors.
Turn your attention back to the good ole USA. For the past twenty-five years, the industry had been fixated on “growing the game.” This primarily meant trying to stimulate demand and participation, so that the supply and demand curves could be healthy and sustainable. Imagine it’s now the year 2125, one hundred years down the road. What will the golf supply look like? Will it ever “pencil” again for daily-fee courses to be built? It’s hard to imagine it will, considering affordable golf and modern-day development prices don’t seem to add up anymore. Will more municipalities gobble up the daily-fee courses ripe for the picking? Will screen golfers (excluding TopGolfers) outnumber grass golfers? Due to the pressure of development, will the number of nine-hole short courses eclipse the population of 6,800-yard facilities? As a history major and one who also likes to think about the future, it’s fun to think about what may come.
One thing I know for sure, though, is that market dynamics and capitalism will cause supply to be whatever it will be. I would not suggest NGCOA or any governing body in golf put our thumbs on the scale to try and influence supply, unless we foresee a true crisis coming. It’s way too hairy and complicated. But demand? We should never rest contentedly on demand. I will never tire of the phrase “grow the game,” as some have. The evangelism, the beginner programs for youth and adults, the outreaching beyond our historical and cultural norms: all of it must continue.
As we begin what will likely be another amazing and dynamic year in golf, let’s not be fooled or lulled by today’s overflowing tee sheets. It’s incumbent upon all of us to fight any future ebbing tide of demand. It’s what we do and it’s what we should do forever. Listen to the sounds of changing sensibilities and norms. Watch for what people want in their experiences and how they choose to spend their time and money. Anticipating and bending towards demand is our best bet for the future. I’m here for it and hope you are too.
Jay Karen, CAE
Chief Executive Officer