The United States is Experiencing Stagnant Growth in the Game of Golf
Is slow growth a temporary problem or a permanent one? What are the solutions to this growth problem in the game?
According to the National Golf Foundation year-to-date rounds in the United States are down 9 percent. In 2006 rounds were up almost 1 percent for the year, due in part to unseasonably warm weather in the northeast during the winter months. In 2005, rounds were down 1 percent for the year. Is this stagnant growth a continuing trend, and if so what are the issues prompting it? Let’s look at some of these issues and determine if this is a growing trend or just a blip on the warning screen.
Weather
Golf is one of the few sports that is completely reliant on weather. If the weather is poor, then you cannot play. For example in the winter months in the North, most places are either too cold or covered with snow or ice. The weather is fantastic in the Southeastern and Southwestern parts of the country during the winter, and that is when they are at their busiest. The summer months cause areas like Florida and certain parts of the desert areas to slow down dramatically. This is due in large part to the high heat and unpredictable weather. Conversely other parts of the country, like the north, are in full season and generating their additions to the total rounds played. So does weather play an important role in rounds played? Absolutely, but it is not the only factor to be concerned with regarding the growth of the game.
Price to Play
Price is a concern of every business not just golf. In the market system under which we operate in, demand is driven by price and vice versa. If there are an over abundance of golf courses, and not enough golfers, the price will go down in order to attract customers. Conversely, if there is a shortage of golf courses, and greater amount of golfers than the courses can handle, the prices will increase. That is what is known as basic supply and demand theory. What about private clubs and high end public facilities you ask? Well, they feel the crunch of economics and economic wellness as well. Think about a private club in your area; now imagine that a similar private club is constructed across the street, but the membership dues are 10,000 dollars less. What is going to happen? Assuming that the golf courses are on par with one another, the golf course that is charging more is going to lose a lot of their members to the new golf course, as well as any new potential members. Why? Because for less money you get the same product as you would across the street. The same would hold true for a public course in the same situation. This is in essence what has happened to the golf industry. The building craze was responsible for over building golf courses to the point that they were averaging 1 new golf course built per day. This was great for the golfer, as they had a multitude of choices, and the prices to play seemed to hold constant. Something had to change, because this could not continue for ever could it? No it could not, there were not enough golfers to sustain this growth, and courses began to lose money, and some eventually had to shut down. This shut down and growing lack of competition has caused the price to play golf to soar over the past few years, ultimately not good for the golfer. There are fewer golf courses being built than a few years ago, the prices at the courses that are still there are increasing, and the rounds are getting longer as the golf courses are becoming more crowded due to the shortage of places to play. This has driven a lot of golfers to get their golfing fix at the driving range. More and more people are opting to just hit balls and practice, than go golfing every week. Picture the golfer who might have played 50 times a year, now he is down to half of that. Prices have made the golfer make a choice, do I want to spend this money on a round of golf or do I want to spend it on something else? He or she ultimately makes the choice that is the best for him or her and their situation. If the prices continue to escalate ahead of what people can afford, the same trend could persist, and this situation may not bode well for the current middle to low income golfer and the industry itself.
Price of Equipment
The price of equipment has soared right in line with the price to play golf. Drivers that used to cost $200-250 dollars now are in the $500-800 dollar range. Putters are in the same boat. The top of line putter used to cost $75 dollars, now the entry level quality putter is $100 dollars and the top of the line collector putters can cost up to many thousands. This trend holds true for just about all aspects of golf equipment. This is a game where if you want to have your own set of clubs, it can cost you $200-400 dollars just to get a decent starter or used set. Not to mention, there is a coolness factor attached with clubs, and if you are one of those people who cares what others think, there is no way you are going to have a starter set. Equipment is pretty pricey for a lot of people, and then on top of that add the cost of playing golf per week, and this is recipe for stagnant growth. It is a lot cheaper for people to rent or borrow one club to hit some range balls, instead of going out, buying a whole new set of clubs, and then heading out to the course to play.
Equipment companies flood the market with new products every year in hope of catching some of those consumer dollars and they do manage to catch quite a few of them. The estimated worldwide market for golf club sales is $3.9 billion dollars. They are there to make a profit, and I for one do not blame them for that at all. We live in a market system and that is the reason they are in business, to make money. The problem that I see is, especially in the United States, they are potentially scaring some people away from the game due to the extremely high prices for some of the latest and greatest equipment. The die hard golfers need the new clubs like a kid needs a sugar fix, and this is what the golf companies know. The newer golfers on the other hand, tend to not know a lot about equipment, so they don’t know what to, or what not to buy. Seeing a price tag of $1,000 dollars or more, for a name brand, full set of clubs, bag, shoes, and balls is a potential deal breaker. But again, as I mentioned earlier with regard to the price to play golf, at some point there will be a price that is too high, and then the prices will fall as the demand for new equipment does. We have seen some evidence of that in the past years, as some of the “top of the line” driver prices have started to go down slightly, instead of constantly rising where they were getting to be $750 dollars. I don’t blame the golf club companies for trying to make money, quite the contrary actually, but like all the other areas mentioned, they have to look at the long term health of the game. If they want to help make sure the game is still there many years from now, along with the nice profits that they are seeing today, they need to make sure they are aiding the growth of the game as well, and not inhibiting it with prices that are too high.
Time
Golf is a sport that is very time consuming. A round of golf can take upwards of 5 hours depending on where you play, add that to the travel time and a beer or two after the round, and that my friends, is a full day. Pace of play has been a hot topic with many golfers and has been cited as a reason for decline in play. It is definitely part of the problem, but not the entire part of it. Golf has always been a social game, especially back in the early part of the century when most people who played it were wealthy, and/or in the upper crust of society, as they were the only ones that could afford the clubs, and had the money to play the game. Not only did they have the money to play, but they also had the free time to play. There is a segment of golfers that are not wealthy, and they work full time jobs, sometimes two, and most are unable to “get away” for a few hours at lunch, or move a meeting, so time is a major concern for them. They are the one day a week players, or weekend warriors. Some of these “warriors” might prefer not to waste one of their days off spending 8 hours at the golf course. Part of this is the fault of poor pace of play, and part of this is because of the overcrowding caused by golf course closures/lack of openings, and part of it is the socializing associated with the 19th hole after the round with your buddies. There are obvious ways to make sure that you play fast, you could play early, play nine, and possibly play at non-peak times. But if you are going to go to a course on the weekend with your buddies, play 18, have some lunch and beers, and reminisce over the round, plan on a long day. Time concerns are not the only reason why the growth of the game has slowed, but could be yet another viable reason that may add to it.
Tiger Boom
Finally let’s look at what I call the “Tiger Boom”. Since his first day in the national spot light, Tiger Woods has caused the world of golf to step back and watch. He is different, not only in the way that he plays and dominates the sport, but his ability to transcend it in so many other avenues. He is a special person with special talents, and we are fortunate to bear witness to what he is doing for not only golf, but society as well. He is opening doors for people who never had the chance to play golf. He is changing the face of golf, allowing golf to be cool and accessible like never before, not just some stuck up snobby sport for the elite. With the inception of the Tiger Woods foundation, and the First Tee, there was a tremendous amount of hope that this new influx of golfers would be the boom that the sport needed. Why have we not seen this major influx? Shouldn’t Tiger have been the answer to all of our problems regarding the growth of the game? Shouldn’t he be the savior because of his far reaching popularity? Television ratings suggest that could be the case. When Tiger plays the ratings are double and sometimes triple a non-Tiger event. But the answer is no, he is not the savior of the growth of the game. His impact on the game is remarkable, but until the people that he has opened the doors for are able to utilize those abilities, the growth will not be realized. Golf is still too expensive and unavailable to many people, including the people that are helped by the Tiger Woods Foundation and The First Tee. So it is going to take time to see this if this influx of new golfers affects the overall rounds played and spurs the new growth of the game of golf.
What is the answer?
What is the answer to why the growth of golf is stagnant in the United States? Is it a permanent problem or is it a temporary issue that will work itself out? Only time will tell. I don’t have an exact answer but I do have an opinion. I can tell you that the golf industry, from a rounds standpoint, is not doing as well as it was a few years ago. Golf course closures, the price of golf increasing at an alarming rate, the time to play golf (being an all day affair at some places), and the cost of equipment continuing to increase, are all things that need to be examined. In my opinion golf growth in America will continue to stay stagnant due to a combination of the above mentioned areas. But then there will be a trickle down of sort. At some point the prices are going to get too high and they are going to drive to many people away from the sport, which will then cause the business people in the industry to take notice. Very similar to the stock market, or the housing market, the golf industry has a bubble and it will burst at some point. Some say that it already has happened in the United States, with all of the golf course closures, but I personally don’t think it has burst yet. Over the next few years, rounds will continue to decrease and the industry will continue to lose golfers because of bad business practices from golf courses, golf management companies, and golf manufacturing companies. Greed is good according to Gordon Gecko, but it can also be bad, if you slap the hand that feeds you too many times, he will stop feeding you. Unless the prices to participate in this great sport are checked, too many people are going to be left out, and in turn, all golfers, aside from the wealthy, are going to suffer. If it gets too expensive, only the wealthy are going to be able to afford to play, if and when that happens, there would not be enough of them to sustain the industry as a whole, and the game of golf could suffer dramatically.
I feel that in order to grow the game of golf there needs to be a consolidated effort from many different areas; all working together to help make sure that the game of golf is healthy. The PGA of America, The USGA, the golf course owners association, and the club manufacturers all need to come together and form some sort of a unit that will oversee the wellness of the game. Right now I am fairly certain that none of the above mentioned organizations have any say in what the other does, and vice versa. It might be better if they could work together to improve the game as a whole, not just in a part here or a part there. That way there can be a checks and balances type situation, where we can make sure that everyone’s immediate interest is in promoting the game, and participating in its growth and sustainment.
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Jason Payne
Jul 30, 2007 at 11:36 pm
How does a sale mean left over crap? If I buy the clubs you just bought only six months later are they still not good clubs?
Lon
Jul 30, 2007 at 12:56 pm
Equipment…..issue…is that… technology and price aside….what 95+% of golfers really need… is a stable set that doesn’t become yesterdays news before it leaves the shelf. The end of the season..off season.. sales.. to unload old models, unwanted designs, and just old crap-ola left- overs… needs to stop from all manufacturers…outlets…golf speciality shops et al. ‘cus it compromises the credibility of the entire industry.Quite frank-ly…, the “sale sign ” has come to mean old crap instead of enhanced value/savings!!!! PERSONALLY…I HAVE NEVER PURCHASED A GOLF SALE ITEM IN ALL MY YEARS IN THE GAME. I currently play the latest greatest…purchased in 2006/07 ..and will not purchase a new club..until 2009/10..or/11. …or when the V-groove issue will kick in…whichever comes first…my putter, is the same style/co. I started with in 1964, the wt. is heavier and it’s milled titanium no sight lines at all…, irons from same co…. only the driver, fw and bag come from more forward thinking co’s. with a different slant on things…their performance is superior to that other co’s offerings….and, matches my game …better. I’ve aged into a hybrid too/instead of my 2 iron….more situations i can use it in. I have played the same co’s ball all my life in it’s latest offering, i wear the same co’s shoes too. I’ve dropped the glove thing..no more leather grips…to use them with. I use high technology tees, just to be different. My + Hcp bears out that I can play. I just really dislike the fact that most people are so confused….they don’t get it. Draw/slice biases and all that other junk..name one 15 who has the same swing with any club in their bag??? …they play the wrong shafts, grips, lenghts, etc. I have only met a handfull that have the right stuff in their bags. Whenever/wherever i play they always ask my advise for their games. We should talk sometime…Respectfully, L