Golf courses continue to fight headwinds to become or remain profitable, but 2012 was a much more favorable year for courses in our region. The National Golf Foundation (NFG) reported some positive news;
Rounds Played
Nationally rounds increased 6%, that’s good. In our region, the east north central, rounds played increased 13.4%, that even better!
Favorable weather definitely impacted play. Warm began in February and most weekends were rain free.
But the economic situation also helped. Many people have become comfortable they are not in financial danger (job lose, house value, etc) so they are spending more on entertainment.
Not all courses saw an increase. Local issues affected the amount of play too. Courses in areas with negative economic conditions, those with many nearby competitors, and those with dilapidated facilities tended not to see much improvement.
Indications are the economic condition will support more play so the big factor for 2013 will be the weather. Unfortunately, as of this writing, we are off to a slow start. The reports from NOAH give some hope. They are saying rainfall from this point forward will be normal and temperatures will be higher than normal. I hope they are right!
Course Supply
At the height of the golf course building boom over 400 new courses opened in one year. The past few years have seen fewer than 20 per year. 13 new courses opened in 2012.
The industry has been losing around 150 to 180 courses each year the past several years. That is expected to continue, at least for the foreseeable future. We lost 154 courses in 2012.
Course Ownership
With so many distressed courses for sale at a cheap price, investors are being attracted. Ownership has been changing. Most choose to continue operating the golf course because at present they have no other viable alternatives. If the day comes where attractive land for residential development is in demand we might see additional closures.
Club Memberships
Clubs suffered mightily when the recession started in 2007. Already weakened by changing demographics and lifestyles, memberships nose-dived as members took a serious look at their finances and decided to drop. It has been hard going for some time now and many clubs, including some old historic landmarks, are barely hanging on.
2012 had a positive change. Membership losses declined for many clubs and others saw dropped members come back. Not huge numbers, but at least moving in a positive direction.
People are feeling a little better and yearn to return to the enjoyment they had previous to the recession. The desire for country club membership is gaining some strength. Should economic situations continue to improve, it is expected club memberships will too.
While trying not write through the prism of rose colored glasses, right now the key indicators point to improved opportunities for golf courses.
