Golf Property Analysts President Larry Hirsh shares his reflections on the recently completed Golf, Inc. Strategies Summit, sharing some of the most recent SLRG findings shared with conference attendees.
Last week, I traveled west to Palm Springs to attend and present with Jon Last of Sports & Leisure Research Group (SLRG) at the 2021 edition of the Golf, Inc. Summit. Jon always brings an interesting perspective to these events born out of a broad view of the sports and leisure industry from his vast experience with Golf Digest, the PGA of America and his involvement with numerous sports outside golf. Our topic was “How to Leverage the Surge” that’s occurred in golf as a result of COVID and more importantly what is the long term impact. Neither Jon nor I have the conclusive answer to those questions but he shared some interesting statistics and we did learn a lot from many of the golf industry’s leaders.
Seeing old friends for the first time in nearly two years, I couldn’t help but be buoyed by the enthusiasm of almost everyone. From owners to consultants to architects and vendors, the golf industry almost seems like the boom days of the 1990’s again – at least for now. The big question is how long it will last. Along with that, everyone wants to know how much of it is sustainable long term. Golf still suffers from a diversity gap and (IMHO) that needs to be bridged before golf can see long term sustainable growth again – where new courses are being built. However, with rounds up, many private clubs claiming waiting lists for membership and golf courses selling quickly and often with multiple offers, my sense is that we need to avoid getting “drunk” on this success and make sure the game takes advantage by embracing those groups that have felt left out for years in the interest of sustainable growth.
There is a most definite sense among many owners that now is a good time to sell golf properties. Multiples seem to be inching upward for the first time in many years. There are active buyers seeking to grow their portfolios and individual investors with positive perceptions of golf. That hasn’t happened for more than 20 years.
Generally, the answer to the above question is that the word is “good”. There’s still the issue at many courses of deferred maintenance as many courses have delayed projects like replacement of old irrigation systems, bunker projects and cart path resurfacing during the leaner times. At many clubs, capital funds have either not been established or been used for operating expenses. This can be the biggest obstacle to selling a golf property at an acceptable price.
When asked who they’re seeing at their courses, many owners reply that it’s more of the same old faces. Though there are some new golfers sprinkled in, growing the game is still a challenge and requires direct action to bring in the “3 M’s” (Millennials, Minorities & Moms) that I’ve referred to for years.
According to SLRG, as of October 15, 2021, 69% of us are either working from home or splitting time between home and workplace. Only 31% regularly go to their designated workplace. This should serve golf well, as long as it lasts. That said, inflation is an obstacle to travel and the purchase of consumer items and could most definitely impact golf habits. SLRG studies show that nearly 2/3 of respondents perceive inflation as much greater now than in 2019, before the pandemic. Golfers are showing resiliency with more than a third (38%) predicting that people will return to spending freely on luxuries in 2021 and 52% expressing that they are better off now than 4 years ago.
Despite some of these positive statistics, I see the present status of golf as more of an opportunity than a strength. If the game is to sustain this surge and continue growth, it needs to broaden its audience and take advantage of diversifying through the new golfers trying out the game due to COVID. Retention has historically been a challenge for golf and focusing on that should be a priority.