NATIONAL GOLF FOUNDATION
AUGUST 12 UPDATE
The Emergency Nine
Have you gotten out to play nine holes in recent months? If so, you're not alone.
Golf course operators report that afternoon and evening tee times have been popular, which seems right given that Covid-19 has changed the contours of the work day for many. Sorting through recent golf participation and engagement research, the number of short loops (as a percentage of total loops) is up over 15% in 2020.
Core golfers report that 33% of their rounds this year have been of the nine-hole variety, while occasional golfers tell us that nearly half (48%) are playing nine holes. This will be seen as good news by many, especially the USGA given their PLAY9 initiative, 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 (see below), so clearly the late-day tee times aren't just for the work-at-home crowd. With late summer days, those nine-hole twilight rounds present the perfect opportunity for families to get to the course after an early dinner, or newcomers to get more comfortable with the game.
Nine-Hole Golf in the U.S.
A Look at Nine-Hole Facilities as a Proportion of Total Supply
Did you know that up until 1974, there were more nine-hole golf facilities in the U.S. than those with 18 or more holes?
18 holes wasn't always the preferred layout. Indeed, many of today’s 18-hole courses were built in two stages -- nine holes at a time. Today, there are 3,777 nine-hole golf facilities in the U.S. that account for about 26% of the total supply.
The seven states with more nine-hole facilities than 18 or 27?
Iowa -- 248 vs 135
Kansas -- 137 vs 101
Nebraska -- 123 vs 90
North Dakota -- 88 vs 28
South Dakota -- 79 vs 40
Maine -- 72 vs 60
Alaska -- 14 vs 6
And yes, Iowa has more nine-hole golf facilities than any other state in the nation. The only other state with more than 200 nine-holers is Texas, with 202.
New faces on the course: Projecting significant jumps in junior (and overall beginner) participation
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.
Surge in engagement: June rounds up 14%
The June rounds-played report from Golf Datatech showed play was up a healthy 13.9% nationally. Because June is such a high-volume month for play, this equates to approximately 7 million to 8 million more rounds than in June of 2019.
For course operators, this means a related increase of as much as $400 million in operational revenue. This rise takes into consideration playing and membership fees (including carts), but not revenue from pro shop merchandise, food & beverage operations, instruction, and events or other programming at a facility, some or all of which might still be affected by local or state safety restrictions on group or indoor gatherings.
June play was up in every state in the continental U.S., including a rounds increase of at least 20% in golf-rich states such as Arizona (+29), Florida (+25%), Georgia (+24%), Texas (+23%), Pennsylvania (+22%) and Ohio (+21%).
The June increase follows a 6.2% bump in May play, helping the industry continue its recovery after more than 20 million Spring rounds were lost due to coronavirus-related course shutdowns and anxiety. More than half of U.S. golf courses were closed in late March and throughout April. If the rest of the year is flat in terms of rounds played (i.e. no different than last year’s figures), the industry would end up falling about 1% short of last year’s 441 million rounds.
However, a continued strong surge in July and August would offset those losses or perhaps surpass last year's play despite the significant spring setback. Almost half of annual rounds are played from May through August.
Can 20 million lost spring rounds be overcome?
Through the first six months of 2020, the nationwide rounds-play figure is down 1.7% compared to the same time a year ago. But talk about a strange first half of the year.
While it seems long ago, golf got off to a very good start in 2020. Unseasonably warm weather led to an early start for golf in parts of the country typically still in their offseason. Double-digit growth in the percentage of rounds played in January and February had the industry up 15% entering March. When the virus and associated shutdowns hit, the true start of the season took the brunt, with drops in March (-9%) and April (-42%) leaving operators 16% behind last year's comparable rounds total.
Monetarily speaking, the 20 million March and April rounds lost reflects a loss of about $1 billion in golf course revenues alone. (This doesn’t include related losses in F&B, retail sales, events, etc.)
In the above graphic, NGF's annual rounds forecast with a “neutral” projection (which assumes the second half of 2020 is in line with 2019) now shows the industry finishing the year down just one percent, which is much more favorable than most expected two months ago.
A more optimistic projection, based on the second half outperforming 2019 by 5%, would have rounds exceed last year's total by about 2%, which no one would have considered in mid-March. Of course, the second half could still underperform due to weather or the virus, so stay tuned.
Golf travel - What's the impact?
While equipment sales and play have been staging a strong comeback, the same can't be said for golf travel. NGF consumer research is signaling that overall trip volume could be down 35% to 40% this year.
Consider this: TSA airport checkpoint data is showing the number of air travelers in the U.S. is off about 75% versus last year and recent norms, having stalled a bit in the past few weeks. And most airlines are now projecting limited Q3 recovery.
Changes in Travel Intent
The following map shows how intent to travel to various locations (by core golfers living east of the Mississippi) has changed since the beginning of the year. Trips out west by “Easterners” appear to be drastically fewer, while southeast golf destinations may suffer the least, owing to the very large number of golfers living within driving distance. Core golfers are defined as those who played 8-or-more rounds over the past 12 months.
What Are Golf Consumers Searching For?
As another measure of increased play and demand, Google data shows that searches including the terms ‘golf balls’ and ‘golf clubs’ are both about 20% more popular right now versus their previous 5-year high marks. To an extent this could reflect a shift – whether fleeting or lasting – towards buying online (given recent store closures and/or golfers not wanting to visit physical retail), but given intel from equipment manufacturers and retailers we suspect that this lift in search popularity is largely a sign of increased purchase interest and behavior.
• 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.
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