NATIONAL GOLF FOUNDATION
tRACKING THE IMPACTS OF COVID-19 ON THE GOLF BUSINESS
Recent NGF Perspectives - "Fortnight"
April 8, 2021 | Written by: Joe Beditz, NGF CEO and President
There’s no question working remotely has provided schedule flexibility to many people over the past year, eliminating commute times, providing employees greater control over when, where and how they work, and keeping fewer tethered to the traditional 9-to-5.
Talk to golf course operators about 2020 and you’ll hear stories about weekday play, especially (underutilized) late afternoons, helping drive increases in “pandemic” rounds. Recently, we surveyed core golfers themselves to understand more about impacts and expectations around WFH.
Focusing solely on non-retired core golfers, 70% indicate they’ve worked remotely at least some of the time over the past year, and the majority found it was easier to get out and play golf. In fact, half said they were playing more golf than usual, especially in the late afternoons and early evenings. They also reported more nine-hole rounds. These observations dovetail nicely with our research that revealed the surges in play last year (+14% year-over-year) were driven in large part by core golfers who, given this unique opportunity, played even more.
For many companies, work-from-home is here to stay. Recent studies of management trends as well as office occupancy rates indicate that ‘hybrid models’ – no, not those kinds of hybrids – will become more and more prevalent as companies seize the opportunity to reduce occupancy costs, and at the same time accommodate the vast majority of WFH workers who now prefer to retain at least some of their schedule flexibility and not give back all of their hours spent commuting.
And those golfers who played so much more in 2020 … many they tell us they intend to keep it up this year, thanks in large part to greater work flexibility. Let’s hope they do.
March 25, 2021 | Written by: Joe Beditz, NGF CEO and President
The latest monthly rounds numbers are out and show something we haven’t seen in a while – a decline in play. But there’s a bit more to unpack as we look back and look ahead.
February is a relatively low-volume month, accounting for less than 5% of annual U.S. rounds, and year-to-year fluctuations are very weather-dependent. This was evident in 2020, when well-above-average temperatures were observed in most parts of the country, helping to lift play by 19% nationwide before the pandemic took its spring toll. The weather this February was, generally, less agreeable for golf. I certainly don’t need to tell that to those in parts of the Plains states and Texas who were hit by the mid-month polar vortex, or to those in Northeast regions who were dumped on by snow and didn’t see their courses thaw out for the entirety of the month. Mother Nature giveth, then taketh away.
February’s 4.7% decline, reported by Golf Datatech, was the first notable year-over-year drop in rounds (outside of last year’s course-shutdown period) since May of 2019. And yet we continue to see strong indicators for demand.
Shipments of the game’s ultimate consumable, golf balls, are higher than they've been in over seven years, which is corroborated by online search data showing golf ball searches are higher than at any point since 2005. Our consumer “Itch Meter,” which asks core golfers to characterize their desire to get out and play, is higher right now than at any point last spring, reflecting the coming to an end of a hard winter up north as fewer snowbirds got their usual golf fix with seasonal trips to places like Florida and Arizona.
So there are signs that if the weather cooperates, play should remain strong. But in the months ahead, it’ll be important to put rounds numbers in context, as year-over-year comps could be misleading. March through May should see significant jumps given last year’s widespread course shutdowns, while numbers in the latter half of 2021 may be down as state economies open back up and golfers begin expressing their demand for other things (travel, ballgames, etc.)
While February’s rounds numbers reflect the first monthly “drop” we’ve seen in a while, we shouldn’t be overly concerned or overreact to seasonal, single-month fluctuations. Other demand indicators are looking healthy.
 Analysis of 12-month rolling averages for shipments and search
March 11, 2021 | Written by: David Lorentz, NGF's Chief Research Officer
There’s a multi-million dollar question floating around the industry these days: How do we retain more golfers, particularly in light of the extraordinary inflow of returners and first-timers in 2020 (+27% vs. ‘19)? There’s no simple answer – the issue is nuanced and evolving, and success at any level relies on the behaviors of so many. It’s certainly not a macro challenge, but we should discuss it from that level, and consider a few meaningful clues that get us a step closer to cracking the code.
Two points in particular are worth mentioning here, both of which fit nicely into Maslow’s hierarchy of human needs. The first has to do with esteem, which centers on achievement, earning respect and/or receiving attention and status. The other deals with belongingness, and the primal need to feel accepted by (and safe within) social groups. Both esteem and belongingness – which form the psychological level of Maslow’s framework – have a lot to do with golf’s less-than-desirable retention rate.
Let’s start with esteem.
For longer than I’ve been alive, NGF has studied the underpinnings of satisfaction and retention in golf, which continues to prove that “shot euphoria” is among the strongest differentiators between those who stay and those who don’t. The majority of lapsed golfers, though they may blame time or money for their departure, admit they never (or rarely) experienced the rush of hitting a good shot before walking away. In fact, only a third of inactive participants suggest they “hit at least one shot per round that [kept them] coming back,” compared to more than 90% of active, loyal golfers.
This will probably elicit some comments about golf being “difficult and not for everyone,” but the finding deserves more consideration than that. If shot euphoria is the key ingredient to customer retention, are we really okay being laissez-faire about it? Aren’t there ways to impact course experiences and golfer introductions to generate more euphoric moments? Can we better manage a customer who’s coming off a 4-hour slog without any sense of achievement or esteem?
By the way, “shot euphoria” is perfectly analogous to “runner’s high,” which many experts believe is the secret to creating a committed runner.
And then there’s belongingness.
Belonging needs are very real and require constant signals. In his book The Culture Code, Daniel Coyle discusses how “our social brains light up when they receive a steady accumulation of almost-invisible [belonging] cues.”
Consider then that only half of lapsed participants say they felt comfortable being around other golfers. Consider also that 80% of Core golfers, in one of our more recent studies, admitted they would feel at least some level of annoyance if the first-tee starter informed them that the group ahead included beginners. Yikes. How’s that for (not) belonging cues?
We can talk all we want about speeding up the game, shortening rounds, or delivering more “fun,” but unless people’s innate psychological needs are being met, we’ll never solve the retention dilemma. This challenge requires purposeful, people-oriented solutions. We’re encouraged to hear about operators who are actively identifying and engaging new and returning customers with these needs in mind, and would love to hear how you’re approaching this multi-million dollar retention question.
 Those who play now and say they’re “very likely” to continue (assuming healthy and financially able)
 Tom Holland, an exercise physiologist and author of several endurance training books, says “I have found that if I can take a beginning runner and get her to experience [a runner’s high], then I have a shot at making her a runner. It is no guarantee, however, and she needs to experience it numerous times before she will believe it is a part of the process and not an isolated event. Then, when we go really long and she experiences the true runner’s high, I know I have her. And you only need to experience it once to be a believer.” Holland, Tom. The Marathon Method: the 16-Week Training Program That Prepares You to Finish a Full or Half Marathon at Your Best Time. Fair Winds Press, 2007.
 Coyle, Daniel. The Culture Code. Bantam, 2018, p.26
Feb. 25, 2021 | Written by: Joe Beditz, NGF's President and CEO
Is this the beginning of the end? Of golf’s 15-year market correction, that is. It might be.
Last year, NGF recorded a net decline of 169 18-Hole Equivalent (18HEQ) golf courses – a 31% reduction from 2019’s 246, the largest drop on record. We ended 2020 with 13,362 18HEQs. (Two 9-holers equal one 18HEQ, meaning the total number of actual courses is higher; north of 16,000.)
The ongoing correction began in 2006, back when the real estate bubble began to deflate and a subprime mortgage crisis ensued. For the first time since Great Depression, the U.S. golf market finished the year with fewer courses than it started. Each year since, except 2008, the number of 18HEQs has fallen, with a total reduction of 1,645 (-11% from peak supply).
This followed a 20-year golf course development boom during which a total of 4,567 18HEQ courses was added to the nation’s supply (+44%). NGF was partly responsible. We issued a report with McKinsey & Co. in 1988 stating that golf course supply could become the limiting factor in golf’s growth if it didn’t keep pace with demand, which had been growing at roughly 4% on average for many years. The report advocated for the building of affordable, accessible public courses to support a greater number of golfers. Unfortunately, things didn’t go exactly to plan.
Our late 80s call for more courses brought residential real estate developers, entrepreneurs and even municipalities into golf with dollar signs in their eyes. NGF’s research was misinterpreted to mean that golf could not fail in any place and at any price. The laws of supply and demand went out the window, along with any feasibility studies that questioned the good business judgment of a developer.
In the late 1990s, golf demand plateaued. NGF issued another strategic report in 1999 urging the industry to return its attention to growing the number of golfers. About that time a young man with the initials ‘TW’ burst on to the scene, participation surged and the development boom marched on as the economy thrived. In the six years following this cautionary report, another 1,100 18HEQ courses were added (+8%). When the housing bubble burst, it led us into the deepest recession in history and the current correction in golf’s supply/demand balance.
A decade and a half later, thanks partly to real estate developers hungry to turn unprofitable golf courses into profitable real estate, and a surprising surge in golf activity catalyzed by the pandemic, we are approaching equilibrium in supply and demand. After 2020’s participation bump, the number of golfers per 18HEQ now stands at 99% of what it was in 1986.
One of our recent facility studies revealed golf courses are in better financial shape today than they have been in years, which is good news for all of us in the golf business. Profitable golf courses are not just good for the game and business of golf, they’re essential. Profits allow owners to invest in the future and provide greater experiences for golfers.
Markets are always correcting and closures will continue in the U.S., especially given the demand for real estate. Like unemployment, course closures will never get to zero. Even during the 1985 to 2006 building boom, the U.S. averaged more than 40 18HEQ closures annually. If we double that number given the current market for land, that amount of churn is still less than 1% of overall golf supply.
All this being said, the U.S. market may have turned a corner on this correction. We’ll be tracking it closely.
And for those who remember NGF’s “course a day” mantra – mea culpa.
Feb. 11, 2021 | Written by: Joe Beditz, NGF's President and CEO
A year ago today, the World Health Organization officially named the disease caused by the coronavirus, COVID-19 (COronaVIrus Disease-2019), and what a year followed.
Last issue I shared the big picture of what happened to golf in 2020: a huge jump in rounds, six million new and returning on-course golfers, an 8% increase in total golf participation (on- and off-course combined). It was a year like no other.
We also noted that “green grass” golf had a net gain of roughly 500,000 participants last year – a number that’s nothing to sneeze at, but at the same time has some course operators and others wondering why it wasn’t more. The reason, simply, is that the record influx was offset by a larger-than-normal volume of people who stepped away from the game, many it appears due to COVID-19 anxieties and/or financial stress, among other things. We’ve attempted to explain golf’s customer churn in a previous issue of Fortnight.
The flood of new faces was a reality though, even if some of our gains were offset by the ones who went absent. Who were these new people? Who wanted “in” during 2020?
- Youth (+ 630,000)
- Beginners (+ 570,000)
- Women (+ 450,000)
- Non-Caucasians (+ 320,000)
All of these groups saw significant gains and, hopefully, many will be back this year along with some of those who had to step aside. If so, we could see another increase in green grass participation in 2021.
But we should do more than hope.
Consider that the number of traditional, green grass golfers today – around 25 million – is the same as 25 years ago. This despite population growth of 25%. Meaning, of course, that the rate of participation in the U.S. has fallen, from over 11% to around 8%.
We have an embarrassment of riches in the form of new golfers, but can only grow the game if we keep more of them. Over just the past five years, we estimate 13 million people have tried playing golf on a golf course for the very first time. Yet we have not realized very meaningful net growth in on-course golfers. We can do better!
It starts by recognizing the incongruence between our current customers and those who want “in.”
Latent demand for traditional golf, which is higher than ever, skews remarkably younger, more female, more diverse and more average in income, as compared to the universe of current golfers. You can see this in the graphic above when you compare our current customers to those who want “in.” You can also see it in the big gains we made last year with these very groups.
To take advantage of this surge in interest, entrepreneurs at golf courses and in golf product and service companies will need to innovate and adapt to the diverse opportunity before them.
Jan. 28, 2021 | Written by: Joe Beditz, NGF's President and CEO
A shot in the arm: Something that has a sudden and positive effect on something, providing encouragement and new activity.
-- Cambridge Dictionary
I can’t think of a more appropriate description of the year 2020 and its effect on golf, can you? There hasn’t been this much optimism and new activity in the golf business since the turn of the century – I almost forgot what it felt like.
Happy to tell you we’ve wrapped up our 2020 research and begin the reporting of our findings starting with this issue of Fortnight – now the official name of this bi-weekly insights newsletter that you’ve been receiving over the past nine months. Fortnight will serve as a new primary channel of communication for us with anyone and everyone who works in the golf business. If you know someone who should be on the distribution list, please forward this to them and point out this link for signing up.
Down to business. We’ve got a lot to discuss -- too much for a single issue of Fortnight, in fact, so we’re going to divide this “Year in Review” into three parts. This issue we’ll provide you with a few topline numbers on golfers, rounds and course supply. In two weeks, we’ll dig into golf participation and provide details on who came into the game, who left and how some important customer groups fared. Finally, we’ll devote the third issue in the series to supply, sharing insights on golf course openings, closings, renovations and an examination of the trend toward market equilibrium.
For readers who are NGF members, you don’t have to wait. Our full report is available at www.ngf.org/graffisreport. Yep, another new name, The Graffis Report, which is what we’ll be calling NGF’s annual year in review – a nod to our founders, Herb and Joe Graffis, who established NGF 85 years ago as the first golf business research, education and trade organization.
Coming into 2020, there was plenty of optimism for the U.S. golf industry, thanks to stable green grass participation and significant growth of engagement away from the course. Then the world was struck by the coronavirus pandemic and golf, like most other businesses, took a huge hit. But spring shutdowns gave way to an unprecedented summer and fall in terms of play, golfer introductions and reintroductions, and robust, late-season spending. As we look back on an astonishing year, several things stand out:
- 14% year-over-year increase in rounds despite March/April course shutdowns
- Total golf participation (on/off-course combined) up 8% Y.O.Y. to 36.9 million participants
- Net gain of 500K on-course golfers, the largest lift in 17 years, up to 24.8M
- An increasing number of interested green grass prospects, up 10% Y.O.Y.
- Significant decrease in the number of course closures as the financial health of facilities nationwide has improved
Surges in play got the most attention in 2020, and rightfully so. Consider that the average weather-related fluctuation is +/- 2%-3% in a typical year and only once in the past two decades was there a 5% Y.O.Y. increase. The 14% jump means that, even with the loss of 20 million spring rounds, the net gain over 2019 was in the neighborhood of 60 million rounds, putting the industry around 500M in total. Heightened demand was particularly evident from June through year’s end, when approximately 75M more rounds were played than the same stretch in 2019.
When we began tracking off-course forms of golf some years back, it was to better quantify the game’s broader consumer base and footprint. This goes well beyond Topgolf – to other golf entertainment venues, and the hundreds of businesses that now have simulators and screen golf setups, plus the good old standalone driving ranges, which believe it or not still outnumber Costco warehouses. Today, almost as many people engage with off-course forms of golf as do traditional “green-grass,” with considerable overlap between the two. Over the past five years, the overall golf consumer pool has risen 19% to 36.9M – including now 12.1M Americans who only hit golf balls with golf clubs somewhere away from the course.
Meanwhile, the number of active, on-course golfers in the U.S. grew by half a million in 2020, up to 24.8 million. It was the most significant Y.O.Y. net increase since 2003, thanks to a record inflow of beginning and returning players (6.2M of them, which is 27% higher than the year before and almost enough to populate Los Angeles and Houston). The net gain could have been even greater, but 2020 was an extraordinary year in more ways than one. Last year 5.7M people stepped away from the game, a 19% increase in outflow versus the year before. The incremental loss was marked by virus anxieties, financial hardships and parenting challenges, and the cancellation of thousands of charity and/or corporate events that draw in “occasional” golfers. Lucky for us, the recently-lapsed participants in 2020 show significantly more interest in returning compared to recently-lapsed in years past.
Speaking of interest, golf’s pipeline of green grass prospects, which we refer to more clinically as “latent demand,” has never been bigger. The number of Americans who didn’t play on a course in the past year but suggest they’re “very interested” in doing so now rose to 17M in 2020 – a 10% increase from the year before and up more than 40% since 2015. As interest continues to swell, there’s been a concomitant rise in the number of beginners, which this year hit an all-time high.
On the supply side, the number of golf course closures dropped significantly (-31%) compared to prior year. NGF recorded a total of 193 18-hole equivalent closures in 2020, about 1.3% of total supply. Demand for land to develop into residential and commercial real estate projects continues to fuel the supply correction in golf. At the same time, fewer than 8% of the nation’s 14,000+ facilities report that they are in poor financial shape, down from 25% in 2016. Markets are always adjusting, but last year’s downswing in closures and improvements in facility financial health could signal the beginning of the end of golf’s ongoing demand/supply correction, which has lingered for 15 years.
Jan. 14, 2021 | Written by: David Lorentz, NGF's Chief Research Officer
As the broader U.S. economy limps into 2021 and stimulus measures work to stave off a double-dip recession, the sentiment in golf remains optimistic, although there are certainly questions about how the industry will fare amid vaccine rollouts and the eventual return to public life. On the whole, golf has been a clear beneficiary of the stay-at-home economy.
Back in November we discussed how the increases in 2020 play and spend were being fueled, to a significant degree, by a passionate cohort of existing players. We estimated that roughly 20% of the Core golfer population had really upped their engagement, taking full advantage of favorable weather, limited travel and other transient pandemic factors, like working from home. Among non-retirees in this group, 4 out of 5 are still operating on a hybrid or full-time-remote work schedule, compared to just 60% of other Core golfers (8+ rounds annually).
As we look ahead to the next 12 months, it would seem that our ability to match (or at least come close to matching) rounds totals from 2020 would hinge greatly on whether these zealous golfers continued to lean in as they have over the past seven months. Indeed it’s worth rooting for, although our most recent consumer pulse data suggests there will be some ‘regression toward the mean’ for these consumers in 2021.
Last week we asked Core golfers to consider two scenarios – one where widespread vaccinations occurred, face coverings and distancing were no longer needed, and life returned to relative normal by early summer. The other scenario, which may be the more plausible of the two, assumed that the coronavirus situation persisted throughout 2021.
In both scenarios, this ‘zealous’ group expects that their play in 2021 will fall back by 10-15% (their self-reported rounds were up, on average, by almost 40% in 2020). It’s a disappointing but perhaps inevitable reality, that there will be some eventual fallback in engagement among the 2020 fanatics, and yet there’s a bigger force at play here – one that could, and probably will, positively shape the industry in 2021.
Our research indicates 4 to 4.5 million Core golfers reduced their play and spend in 2020 (and they outnumber the ‘zealous group’ by as much as 50%). It’s this group that could really move the needle in 2021. In the ‘back to normal by summer’ scenario, these golfers predict their play would rebound to pre-Covid levels, while even under a ‘prolonged’ scenario they expect to cut their 2020 shortfalls in half, which would still provide a significant boost to rounds this year.
There will be other factors at play – like the weather, which couldn’t have been much better in 2020, some rebounding in travel golf and event golf (leagues, outings, etc.), or the inflow of new and returning players, and how they’ll respond in 2021. But the important takeaway here is that U.S. golf rounds were up significantly in 2020 despite the fact that a large swath of the Core golfer population (roughly a third of them, myself included) was actually pulling us in the opposite direction. So the bigger question is not whether the zealous golfers will keep charging this year, but to what extent the ‘underperformers’ will bounce back. Certainly our data gives hope.
Dec. 31, 2020 | Written by: Joe Beditz, NGF President and CEO
As I considered this last message of the year, I realized I really just wanted to say “Thank You” to everyone in and around golf who helped turn a terrible situation at the start of this year into something positive for golf.
Thanks to the golfers who came out in record-setting fashion – whether they were seeking to get outside, get exercise, get together with family … or all of the above. Thanks to the newcomers, to the returners, and to our most dedicated and passionate participants who seized the opportunity to play far more frequently.
Thanks to the tireless employees at the more than 14,000 golf facilities around the country who handled unforeseen challenges, from interacting with customers and booking rounds in new ways to juggling safety and staffing issues. And to the operators at those facilities who share rounds-played data with us every month, helping us keep our finger on the pulse of play.
Thanks to the superintendents and their dedicated crews. Heavier play meant more divots, more pitch marks, more golf cars and the turf compaction issues that come with them. They’ve been busting their butts to keep up, so kudos to these hard-working men and women.
Thanks to the golf retailers and manufacturers, who overcame early-season calamity to meet the surge in consumer demand that followed.
Thanks to our hometown courses. Destination golf is special, but golf is primarily local and that’s why the game was able to provide safe haven this year.
And a very sincere and special thanks to the members of our passionate and committed NGF community who make our research possible, and to our readers, who let us know what we do here at NGF is relevant and important.
No doubt there’s still some tough sledding ahead. But we’re looking forward to tomorrow, which will usher in a new year, a rebounding economy, the eventual death of the virus, and a return to normalcy for you and your families.
Dec. 17, 2020 | Written by: David Lorentz, NGF Chief Research Officer
This week the Commerce Department reported that U.S. retail sales dropped 1.1% in November – the second straight month of decline and a bigger dip than most economists predicted, with softer spending at department stores, restaurants, and car dealerships. That, alongside weakening consumer confidence, increases in jobless claims and the uptick in Covid-19 cases, has some rightfully concerned about a sputtering economy as we head into winter.
Since May, the overall golf economy has shown tremendous resilience amid the turbulence, and there are good reasons to expect (or at least hope for) continued buoyancy. November, although a much lower-volume month for sales (~5%), was another strong one for the equipment business, with wholesale shipments of clubs up 100% versus a year ago, and shipments of golf balls outpacing last November by more than 30%. We connected with a number of leading golf retailers this week – both brick-and-mortar and online – and hear that strong sales have continued in recent months (since the $1 billion Q3), as the buying season has stretched deeper into the year than we can ever recall.
There’s also evidence that holiday golf gifting could outpace historic levels.
Online search interest for “golf gifts” reveals a 25-30% increase vs. 2019 and the highest point in five years, at least. Partial data for December suggests this search term could reach its highest popularity mark in a dozen years. Looks like more golfers could be finding golf balls, apparel or gadgets in their stockings this year.
Self-gifting among golfers may be on the rise too. We recently surveyed a sample of 350 Core golfers and learned that three-quarters of them expect to spend as much or more on golf-related gifts for themselves this holiday season – lining up with broader consumer trends towards “treating yourself” to cure the coronavirus blues.2 The most popular gift, they say? Golf clubs, which supports their reported increases in spending and the upsurge in shipments mentioned above.
Here’s to hoping the golf economy doesn’t sputter anytime soon. From the entire research team at NGF, we hope you have a safe and joyful holiday season.
December 3, 2020 | Written by: Joe Beditz, NGF President and CEO
October rounds played came in 32% higher than last year, according to Golf Datatech, raising the national year-to-date figure to +10.8%. Several multi-course operators we checked with this week told us that the surge in play continued in November, putting us on track for an annual increase of somewhere around 50 million rounds over 2019. Pretty amazing.
Record setting? Not quite.
Can you guess the last (and only) time we had an increase bigger than that?
It was Tiger’s breakout year – 1997 – when the number of rounds jumped up 63 million over the year before. Rarely has coming in second place felt so good. I doubt that anyone around for both surges would argue if I said that this year felt better. We were in the serious pits back in March and April, when we lost about 20 million rounds to virus-related shutdowns, and the climb out has been stunning.
Both of these “surge” years are standouts. Over the past 20+ years, rounds played have generally moved up and down no more than a few percent each year, typically weather-related fluctuation. A “big” jump would be something like 5%.
Globally, the pandemic has not been good for too many businesses. Golf has been one of the lucky few. For reasons well-documented, people have been more attracted to and engaged with golf in 2020, helping to drive up rounds played.
But weather has helped quite a bit too. It has been (mostly) an exceptionally warm and dry year. Following two of the wettest years on record, the weather has been very favorable in places where a lot of golf is played … from lower New England to the Great Lakes states. (Click here to see a map.)
Tiger won the Masters by 12 back in 1997. This year I’m guessing we’ll finish up 12% in rounds. It’s just a coincidence.
November 19, 2020 | Written by: Joe Beditz, NGF President and CEO
Back in 2009, towards the end of the Great Recession, we surveyed U.S. golf courses and clubs regarding their financial health. We did it again in 2016 to see how things had changed, and again over the course of the past few months.
In both 2009 and 2016, roughly a quarter of public courses admitted to being in bad shape, financially. Among private clubs, 21% were doing poorly in ’09, but seven years later that proportion had dropped to 14%.
Did these self-reported financial health measures have any predictive validity? Yes, they did.
- Nearly 20% of the public courses in our previous samples who rated their financial health 0-4 on a 0-10 scale are no longer in business – a 4x higher ‘closure rate’ compared to those on the upper end of our health assessment scale
- A third of private clubs who rated their health 0-4 in those previous studies are now either closed (7%) or converted (26%) to semi-public or public facilities (8x higher rate
So where do things stand today? Much improved. See graphic below.
There’s been a dramatic rise in the proportion of U.S. golf facilities reporting to be in good financial shape compared to our previous studies, including more than half of public courses and nearly 2/3 of private clubs. And, fewer than 1 in 10 (public and private combined) suggest that they’re currently in bad shape (0-4).
For public courses especially, the summer swell has had a profound impact on financial well-being. Coming into 2020, 14% of public courses would have rated themselves in financial distress (down from 25% in 2016), but today that proportion has been cut almost in half (8%), thanks to over 2,000 extra rounds on average.
NOTE: Our 2020 sample consisted of 876 public courses and 337 private clubs, but because 9-hole and value-priced (<$40 rack rate) facilities are under-represented in our sample, a slightly higher overall percentage of public courses may be distressed than our results show.
So, what do the courses and clubs who remain in trouble have in common?
• They are disproportionately 9-hole and/or value-priced facilities (<$40 rack rate)
• They claim to be in oversupplied/bad markets
• They have made little/no investment in capital improvements over the past 5 years, and don’t have plans to make any
The takeaway here is that the overall financial health of U.S. golf facilities has improved significantly since 2016 – a function of stabilizing participation, an improved overall economy and the closing of many lower-performing courses, and now the surge in rounds played. And, with fewer facilities now financially “at risk,” we should expect the rate of closures/conversions to slow down, and the marketplace to find its way closer to equilibrium.
November 5, 2020 | Written by: David Lorentz, NGF Chief Research Officer
There’s an adage in business that 80% of sales come from 20% of customers. This phenomenon – known also as “the law of the vital few” – may not be the universal truth that some suggest, but it does have pretty broad acceptance and application, and is viewed by many as a powerful tool for growing business.
Coincidentally or not, this principle applies nicely to the pandemic-induced lift that golf has experienced over the past five months, as it’s become pretty clear that a certain 20% of existing customers are contributing disproportionately to the outcome. (What follows begins to answer the question we’ve been asked more than any other in recent months: Who’s driving the surge?)
Since March we’ve surveyed several thousand Core consumers, chronicling their sentiments and behaviors and drawing distinctions between different groups, time periods and locations. Within this pulse survey we’ve also inquired about current and expected 2020 golf spend, asking respondents to compare these amounts to 2019 and/or their “typical” annual spend.
The data here is more directional than scientific/projectable, but it’s showed us that 20% of Core golfers will be “over-spenders” this year, while roughly 30% will be “same-spenders” and, believe it or not, half will actually underspend this year versus last (or typical).
This increased spend among the 20-percenters – who represent 2.5 to 3 million golfers nationwide – applies to both equipment and rounds. Over-spenders are 44% more likely to have purchased a driver and/or set of irons so far in 2020 (despite entering the year with equal expectations to buy). And when it comes to rounds, they’re estimating an average increase of 37% for the year (compared to +23% for same-spenders and -6% for under-spenders).
So, who are these over-spenders, you ask? Well, two-thirds are under 50 years old and half are in households making $150,000 or more, which is about 1.5x and 2x more common, respectively, than the average Core consumer. This group is also 23% more likely to live in the Northeast and Midwest Census regions, which supports the state-by-state rounds increases we’ve detailed in previous weeks.
But perhaps the most obvious or expected difference is that this group of over-spenders appears to be a bit more serious about the pandemic. Compared to other Core golfers (8+ rounds annually), they’re:
- 15% more likely to believe that “normal” isn’t returning until the second half of 2021 (or later)
- 15% less likely to feel that their work and personal lives are “getting back to normal”
- 16% less likely to have dined out in the past seven days
- 63% less likely to have visited a crowded outdoor spot in the past seven days
All of these observations lead to two important points. The first is not new but worth revisiting – that golf and the pandemic have a bit of a synergetic relationship going, both broadly speaking and, more specifically, as it relates to the 20-percenters who are doing a lot of the heavy lifting. It seems the emotions they harbor towards the pandemic are stimulating some of this golf-crazy behavior.
The other point is about retaining and “leveling up” your best customers. Do you know your vital few? Their differentiating characteristics? How are you identifying, serving and rewarding this group? Finding look-alikes?
We talk often about attracting new golfers, and there’s a tendency in business towards investing disproportionately in customer acquisition, but sometimes (maybe most times) the easiest source of new and sustainable revenue is right under your nose.
October 8, 2020 | Written by David Lorentz, NGF Chief Research Officer
In a recent article about pandemic winners and losers, New York Magazine described golf – one of its winners – as “slow and expensive.”
These are just two of the game’s unflattering perceptions (there’s also “difficult” and “exclusionary”), and are used by non-golfing/non-endemic journalists almost as a matter of course. Whether a function of bad experiences, skewed exposures or innate human ‘negativity bias,’ the reputation of golf among those who don’t play has leaned unfavorably for years. As industry researchers we’ve not only tracked these sentiments, but have long been curious to understand their origins and impacts.
Perceptions as you know are formed based on relatives. Golf is “slow” because most sports require running and jumping and other lively exertion. It’s “expensive” because most of the recreational equipment in your garage can be used for free at any time (and just about anywhere). In a way, that’s what makes golf “exclusionary” too – since there are certain places that many of us can’t play, as they’re prohibitive in cost or access or both.
These contrasts aren’t worth apologizing for, necessarily, and they certainly don’t stop roughly 1 in 9 Americans from actively engaging with the sport each year (or another 2 in 9 from doing so passively), but I needn’t tell you that perceptions matter in business. They influence behaviors and strengthen loyalty. Or, they push people away. Roughly 75% of non-golfers with a negative opinion of golf also express zero interest in taking it up. By comparison, only 27% of non-golfers with neutral perceptions have closed the door on the game. The difference there is intuitive but it does underscore the importance of managing golf’s brand and owning its narrative. It’s said that the market will define your story if you don’t give it a story to talk about.
So what’s our story, and how do we present a better one? A few thoughts:
- For starters, we can do some counter-punching with better information and context. Take “expensive” as an example. Golf obviously has startup costs, but in terms of ongoing expenses it’s actually quite practical for the majority of Americans. Right now our database shows a median maximum rate of $48 for 18 holes†, including cart, at a regulation-length public course in the middle of peak season. If you’re willing to steer away from the busiest times, that median rate drops to almost $30. That’s somewhere between an $8 and $12 hourly rate for recreation, give or take, which would seem to be as good as anything else that’s pay-to-participate. And that’s just the median! Context can change perceptions. Just ask Ikea, who used the approach successfully in their “It’s that affordable” campaign.
- We also don’t have to counterpunch every negative opinion or misperception, but instead can use certain ones to our advantage, which marketers often accomplish through irony or self-deprecating messaging (remember Golfsmith’s #AnythingForGolf campaign, which cleverly faced up to the difficulty of the game?). Satire can be an effective way to capture attention, but perhaps more importantly can appeal to emotion and earn trust
- Finally, we can tell a better story by focusing more on our customers (and prospects) than ourselves. Branding is inherently self-centered but ultimately your customers care a lot more about themselves than they care about you. So make it about them! Last year we piloted a marketing program in Denver that aimed to activate interested adults by using strategically-crafted messages directed at various consumer targets. Before going to market with those ads, we tested their effectiveness among samples of Denverites and other Americans. In doing so we discovered that our message about dress code, and needing “More golfers who don’t dress like golfers,” was most effective in making golf seem relevant, approachable and fun. The message wasn’t about sprawling fairways, challenging greens or timeless traditions – it was about them, and us needing their unique sense of style.
The good news is that opinions of golf have been improving. Seven years ago, 43% of non-golfers had neutral or positive things to say about the game. Earlier this year (pre-pandemic), that proportion had risen to 55%. It’s significant progress but there’s room to keep going. Golf has a lot of people’s attention right now, and with that comes the opportunity to create impressions – new and better impressions. And while we have the power to do this through words and storytelling, the real convincing is going to happen at the course.
We’ll continue to track how sentiments change during and after this Covid-fueled boom.
† The cost to play golf has actually fallen over the past decade – had we kept up with inflation since 2007, that median maximum rate would look more like $53, not $48.
September 10, 2020 | Written by Joe Beditz, NGF President & CEO
The big question in March and April was whether golf courses and retail would reopen and remain open. In May and June, we wondered how quickly and strongly the golf economy would bounce back from spring losses. Then, in July and August, our curiosity turned towards understanding how golfers were behaving differently in the new normal, and which consumer groups were contributing to the summer spikes in play and spend.
Now, the big unknown seems to be the extent to which we might retain new golfers and sustain increased levels of play when COVID is finally in the rearview. That’s of course a longer-term question, but we can certainly speculate based on past and current knowledge.
Let’s first recognize how we got to this point. There’s no question the leading driver of golf’s nationwide surge is less resource competition – fewer commitments, fewer trips, fewer available activities, and fewer ways to spend disposable income. There’ve been other transient factors too, like favorable weather, extended shutdowns at golf entertainment venues, and perhaps even a pandemic-induced need for mental and physical escape.
But nothing about the past few months seems structurally different for golf, whether with the product itself, the service that supports it, or the overall user experience … unless you count extended tee time intervals, which for a time seemed to produce faster, smoother and more enjoyable rounds. Either way, we weren’t suddenly marketing ourselves differently, onboarding new players differently, or managing customer relationships differently. (In fact, remote check-in procedures may have made it more impersonal.) Which is to say we should expect a similar churn rate as before, because nothing changes if nothing changes.
The ability to retain customers has been golf’s Achilles heel for some time now. In the past five years alone we’ve “welcomed” more than 12 million people to the traditional game, and yet our ‘sea level’ has risen by only 200,000, give or take. It’s almost inexplicable, and signals a serious issue with the experience and/or perceived value among new customers.
We can certainly hope that the pandemic reorients consumers – making them appreciate open space, fresh air and less crowded activities than before. But those are probably fleeting effects.
Perhaps the one thing that may be different these days, and should contribute positively to golf’s retention rate, is the fact that more and more beginners are coming in with off-course experiences under their belts – specifically golf entertainment – which means more competence and confidence. Our data shows that beginners who’ve played at a golf entertainment venue are 20% more likely to say they’ll stick around, barring health or financial setbacks.
This message isn’t meant to be a tub of ice water dumped over the hopes of those currently celebrating golf’s surge, but it is a ‘bucket challenge’ of sorts. If it motivates some to fight the natural tendency to relax and enjoy the extra business, and instead strive to identify our newcomers and make an extra-large effort to ensure that their experience is sticky … then it was worth the risk of dampening some of the enthusiasm out there right now. Encouragingly, we’ve had recent dialogues with operators about this very topic (experience and retention), and can sense a different level of determination.
July 30, 2020
Based on NGF research at the midway point of the year, there’s evidence the number of junior golfers (ages 6-17) could swell by as much as 20% this year. With approximately 2.5 million kids having teed it up on a golf course last year, that’s a potential Covid-related bump of half a million junior golfers by year's end.
If we had used the first quarter of 2020 (January, February and March) as any indication, we’d have seen no real change in the junior ranks, as the numbers were relatively normal. But in Q2, the rise has been significant from a directional standpoint.
It makes sense, with golf celebrated as a safe and healthy outdoor activity for all ages as the coronavirus rages on. With many youth sports on hold or slowly coming back, and families seeking activities they can do together, especially as schools were out, golf has emerged as a terrific alternative. Our data also suggests that these newbies may actually be a little bit younger than usual, with an increase in the number of girls and about the same racial/ethnic diversity (~25% non-Caucasian) that we’re now accustomed to seeing among the junior set.
The number of overall beginning and returning golfers during the Q2 stretch appears equally significant – both about 20% higher than in recent years.
The question, as always, is whether the industry will be able to convert these golfers into committed customers. That will depend on the experience they have at the golf course, which can no doubt be managed in a way that enhances satisfaction, fosters loyalty and improves retention.
Bear in mind, this inflow of new golfers will be offset, to some extent, by a natural churn that occurs every year. This may end up even more pronounced in 2020 due to Covid, as some golfers will elect not to play this year because of financial hardship or health and safety concerns.
February 2021 Down 4.7% as Mother Nature Slows Golf's Roll
February rounds were down 4.7% nationwide compared to a year ago, when play for the month had been up 19% before the pandemic hit the U.S.
Like January, February is a low-volume month for rounds, accounting for only about 5% of the average annual total. Because of that, weather can have a significant impact on play and this February was the coldest since 1989, according to the National Oceanic and Atmospheric Administration.
In the Mid-Atlantic Region, play was down 90% year-over-year thanks to a nor’easter that dumped between 10 and 30 inches of snow across parts of Pennsylvania, New Jersey and New York at the start of the month. It was the region’s largest snowstorm in five years, according to the NOAA, and with the cold temperatures, many courses in the area remained snow-covered throughout February.
Rounds in New England were down almost 64% while play in the East North Central (Michigan, Wisconsin, Illinois, Indiana and Ohio) was down over 53% from 2020.
Entering March, rounds are up 7.8% nationally compared to a year ago.
2020 Play Finishes up 14% YOY, Over 60 Million More Than 2019
December rounds were up more than 37% nationwide, according to Golf Datatech’s monthly report, capping a resurgent year for the U.S. market. Overall, play during 2020 was up 13.9% over 2019, putting the year-end total at around 500 million rounds.
Play at private clubs was up 19.9% year-over-year, while public facilities (including resorts that were more affected by travel limitations) saw a 12.4% rise in rounds.
From June through the end of the year, the surges in play yielded about 75 million incremental rounds compared to the same period in 2019. For the year — and factoring in the loss of 20 million spring rounds due to virus-related shutdowns and anxiety — the net gain is more than 60 million extra rounds over 2019, when 441 million rounds of golf were played at the nation’s more than 16,000 golf courses.
In a typical year, weather-related fluctuation usually accounts for a 2% to 3% difference in the total number of rounds played. The only other year in the past two decades that the U.S. saw an increase of more than 3% was in 2012, when play rose 5.7% in part because of an early-season heatwave that contributed to heavier offseason play in some parts of the country.
The Emergency Nine
Did you get out to play nine holes at some point in 2020? If so, you weren't alone.
During the summer months in particular, when there were extra hours of sunlight, golf course operators reported that afternoon and evening tee times were exceptionally popular, which seems right given that Covid-19 changed the contours of the work day for many. Sorting through our golf participation and engagement research, the number of short loops (as a percentage of total loops) was up over 15% in 2020.
Core golfers report that 33% of their rounds were of the nine-hole variety, while occasional golfers told us that more than 40% of the rounds they played were nine holes. This will be seen as good news by many and would indicate that the “time barrier” to golf is being overcome by more golfers.
We've talked about the increase in beginners and youth golfers, so clearly the late-day tee times weren't just for the work-at-home crowd. Those nine-hole twilight rounds on late summer days presented the perfect opportunity for families to get to the course after an early dinner, or newcomers to get more comfortable with the game.
The USGA, which has a PLAY9 initiative, said that 9-hole scores accounted for about 13% of scores posted to the new World Handicap System in 2020. In total, almost 66 million 18-hole scores were posted in the U.S. to just over 10 million 9-hole scores. This engagement is among the more committed golfer base, too, as golfers with an official USGA handicap posted an average of 38 rounds, almost double the average played by all golfers last year.
• Currently open
• Not yet open or operations suspended temporarily
• Non-sampled golf facilities
The map above represents a sample of approximately 10% of all golf courses in the U.S., and is intended to provide perspective as to the geography of courses that are either open or have temporarily suspended golf operations.
While not representative of a complete view of golf course availability, it is the most nationally representative sample of courses available in the industry -- one that includes daily fee, private, municipal, resort and residential communities.
Trend in Course Openings
Less than 50% of golf courses were open to play for more than a month during the height of the coronavirus pandemic -- a combination of governmental efforts (state and local) to reduce the spread of the virus as well as seasonality (wintry weather in the northernmost parts of the country).
The percentage steadily increased from the last week of April through mid-May as more than a dozen states lifted bans on golf while others -- most notably California and Florida -- eased significant local restrictions. By early June, no states had restrictions on play.
A shot in the arm: Something that has a sudden and positive effect on something, providing encouragement and new activity. — Cambridge Dictionary I can’t think of a more appropriate description of the year 2020 and its effect on golf, can you? There hasn’t been this much optimism and new activity in the golf business…Read More
At one point in mid-April, as many as 19 states had restrictions on golf, either at a statewide or local level. The following is an overview of how governmental executive orders affected golf operations nationwide.Read More
As the pandemic stretches on, NGF’s ongoing national participation study shows that 35- to 49-year-old golfers have been especially engaged.Read More