SLRG’s January 2025 feature on the National Golf Course Owners’ Association website, includes a preview of key trends presented at the annual Golf Business Conference drawn from the soon to be released Golf Business Pulse Report.
Latest from Sports & Leisure Research Group
– 72% concur that “It’s important for my life to include a number of unique experiences.”
– Two-Thirds agree that “Making time to enjoy leisure activities is more important to me now than it was six months ago.”
– Less than half (down from 51% in 2024 and 57% in 2023) strongly agree that facilities need to raise their rates in 2025.
Facility Owners and Golfers Look at the Year Ahead
The 2025 NGCOA Annual Business Pulse Report is the culmination of the third year of a proprietary insights program in partnership with Sports and Leisure Research Group, initiated in 2022. This year’s report will again incorporate perspectives drawn from sixteen in depth interviews conducted with NGCOA members and a comprehensive and empirical survey of over 200 facility owners and operators on emerging trends and critical issues for the year ahead. Key insights from this year’s report have been incorporated into a presentation at the January 2025 Golf Business Conference and will continue to provide trending analysis, revealing significant shifts and developments in the areas of facility operations, agronomy and marketing. Here are some of the key highlights:
Overall economic uncertainty has eclipsed labor issues as facility owners’ top concern: Reflected in the comments of many facility owners, the ability to push rate and overall rounds utilization and growth are heavily impacted by those customers served. In our consumer data we see classic evidence of a “K” shaped economic recovery, where the pain of continued cost of living increases (remembering that even if the rate of inflation may be slowing, costs are still significantly higher than they were four years ago and outpacing wage growth) has an acute impact on those outside the upper third of earners. Golf is more immune to this than other consumables, but for those facilities serving less affluent segments, there are significant impacts. Just under two thirds of owners strongly agree that inflation is an issue of concern for their golf operation. Several owners express concern for the lower end of the golf market and are quick to note that we are still right sizing supply and need to be wary of the overdevelopment that crashed the previous surge in participation. As one MCO summarizes, it’s important not to forget that the game is healthier because there are less golf courses.
Consumers are more Impetuous and that, in part, sustains golf’s participation growth amidst a still tenuous economy: Looking at our Golfer Consumer Barometer findings validated in owner interviews, there is more of a ‘live for today’, ‘supersize me’ mentality of which golf is a part. We’re Spending and living for Today and late November golfer pulsing indicates that less than half feel that they have to make more difficult decisions about discretionary purchases than they did five years ago. That’s the best we’ve seen in 13 months. Couple this with U.S. Federal Reserve Bank data that shows credit card balances rising again in the third quarter to $1.17 billion—a record high and up 8.4% vs YAG, and it’s clear that we are splurging on things that we covet. Equally telling is November data that points to heightened desires for instant gratification. Those who agree that they are living for today is at a twelve-month high, and this sentiment is particularly acute for the youngest adults.
57% strongly agree that “people today are more selfish than in their parent’s generation.”
72% concur that “It’s important for my life to include a number of unique experiences.”
Two-Thirds agree that “Making time to enjoy leisure activities is more important to me now than it was six months ago.”
Pile onto this, Merrill Lynch analysis that shows that we are at the start of a twenty-year cycle that will see the largest inter-generational wealth transfer in our nation’s history–some $84 trillion– and there’s another positive short-term indicator for the leisure industry. But several owners are mindful that it won’t take much to upset the apple cart.
RATES, FEES and BUDGETS—ARE WE HITTING THE RATE CEILING? 2024 was another profitable year that continued to accommodate rate increases. In Most markets, facility operators continue to push Rate, often through dynamic pricing utilization. But the rate of price acceleration is cooling off some, as some operators see pockets of softness. Price elasticities grow increasingly more hyper local, driven by market specific competition, weather conditions and local economic realities.
More than ¾ of facility owners report 2024 profit up over 2023, consistent with what was reported in 2023 vs. ’22. 90% raised rates this year, spot on with the percentage of owners who indicated in last year’s report, that they planned raise rates in 2024, and also consistent with the 88% who raised rates in 2023.
Mean green fees are up 20% over the past three years
Moving forward, the pace of rate increases is continuing to stabilize. 15% plan to keep them flat in ’25, vs 11% last year.
Less than half (down from 51% in 2024 and 57% in 2023) strongly agree that facilities need to raise their rates in 2025
There was a +10 point increase to 40% who are very concerned that the industry will push price increases too far.
There is heightened concern about current and potential government regulation: Facility operators are feeling intense pressure about the “debilitating impacts” of unfunded mandates and increased intervention, particularly on labor, higher taxes and insurance costs, water usage and other environmental issues. Unprompted, this is a much greater concern than in years past. Several owners are looking to see greater mobilization of industry advocacy efforts. In the survey data, state government-imposed regulation is seen to be a significantly greater threat than federal mandates, a phenomenon that will likely be amplified given 2024 election results.
Gamified Ranges, Screen Golf and Other Derivatives are now table stakes: The traditional golf range is facing extinction as operators recognize that competing with off-course screen golf not only increases the share of current customers, but continues to attract new customers by positioning green grass derivatives as value propositions relative to their stand-alone counterparts, and as potential gateways to a traditional golf experience. The survey data shows 58% of facility owners considering smart ranges and other gamification elements as important in the overall success of their facility over the next two to three years. 43% strongly agree that golf ranges have become a significant source or revenue for golf facilities. The caveat is that several owners question whether the saturation point is near or already upon us. Survey data shows 56% believe that we are approaching that point.
2024 was another profitable year that continued to accommodate rate increases: More than ¾ of facility owners report profit up over 2023, consistent with what was reported in 2023 vs. ’22. 90% raised rates this year, spot on with the percentage of owners who indicated that they planned to raise rates in 2024, in last year’s report, and also consistent with the 88% who raised rates in 2023.
We have reached a new paradigm of Democratized Golf: So much of the customer development focus remains fixed on newer entrants and creating more welcoming and “fun” experiences for all…a sea change from where we were pre-pandemic, and more ubiquitous now than even over the past few years. Many reflect upon this more accessible “real golf” finally superseding an often over glamorized, exclusionary and pretentious perception that used to define the product. In the survey data, 87% of facility owners agree that golf is becoming more inclusive and diverse.