NGF: U.S. course openings remain stagnant

If you find yourself in a part of the United States where a new golf course opened its doors in 2012, consider yourself in rare company.

According to initial information from the National Golf Foundation, only 13.5 new golf courses (defined as 18-hole equivalents) opened in 2012 vs. 154.5 course closurers. This marks the seventh straight year that more golf courses closed than opened in the U.S.

In advance of a more exhaustive study of this data by the NGF set to be released next month, the early numbers shouldn't come as any surprise to anyone in the golf industry. Since what the NGF calls a "market correction" began in 2006, there has been a cumulative net reduction of 499.5 golf courses. As significant as that is, it still represents only an overall drop of 3.3 percent from the peak supply year of 2005.

Of those 154.5 golf courses that closed this past year, a disproportionate number of them were public facilities (68 percent of total closures).

Comments

[Paul J Hammond]

Perhaps the reason for many many closures is the ineptitude of the management team that runs them. Time and time again I have seen co called Management Teams take over a golf course and do nothing except drain any resources the course has and get fired after 1 year of operation. Another reason is real estate developers fire the golf professionals and have the building contractor run the course because they have to find a place for him as their housing boom has dried up.

[Derek Smith]

Management companies have resources, operating manuals that could fill up a warehouse, policies and procedures documents that killed the rain forests, and strict budget guidelines and reporting. They claim this is what it takes now to run a successful golf operation. Here is what they don't bring to the table - local connection and understanding of customers and community. Yet they take over and bring in staff from other states. There is a honeymoon period where the local customers/members wait to see what is going to be different. What is different is the management staff have no connection to the community, and they cannot connect because the management company is breathing down their necks to make budgets. The slash and burn method ends up turning off the customers/members and they look for something else that counts them as valuable! However, this is not the only reason for closures.

[Derek Smith]

Being in the golf club management business, I am glad to hear these kind of numbers (negative) from year to year! However, averaging 100 net closures a year is not nearly enough. If it had been 1000/year, we would be in much better shape right now. Really, there is no demand for any new golf courses to be built - at all! Don't understand why 13 new ones popped up! But, have a new coming into my area in 2014, even though it is a casino project. Still, doesn't make any good financial sense!

[Larry]

The 13 new courses aren't worth worrying about, the result of someone seeing a vacuum in a market or, as Derek suggests, financial stupidity. It's more or less a rounding error. If you want to gauge the future of golf courses as an industry, follow the money -- the smart money. MetLife bought Reynolds Plantation and its six golf courses. Toll Brothers is on a buying binge for golf courses across the country. National Golf Management in Myrtle Beach has added a dozen golf courses to its portfolio in what is acknowledged widely as an over-saturated market. Yes, we need to lose more poorly managed clubs, but rumors of golf's demise are greatly exaggerated. (Interesting side note I read somewhere: More than 30 new bowling alleys opened nationally each year during the recession. Golf might look to bowling's ability to attract leagues of players of all abilities; after all, the handicap systems in the two sports are similar and equalize competition. Golf clubs might also consider attracting additional patrons -- and added revenue -- by hiring decent chefs and upgrading the food, as some bowling establishments have done (I'll have the "frites" please, not the fries.) With more creative thinking and imagination, golf clubs can survive and maybe even thrive. But your average golf pro or GM has been trained to communicate with members, not necessarily to build marketing programs. That has to change.

[Bob]

Real estate developments are still going under and the golf courses with them. It is going to take years for this to turn around. The economy has to first.
Did anyone notice the math isn't to accurate. The daily fee courses closed were 84% of the total.

[Jordan]

There is a very small % of the public (like single digits) playing golf and we are trying to attract from that pool. What we need to focus on as an industry is growing the game and having a larger pool of people to draw from. We need to make golf accessible, easier, & more fun. A good place to start is with SNAG; this makes the game less difficult and is more playful, less regimented. Enough with the players that shun the beginners, kids, & women. We need to promote a welcoming sport because the fact is, we are competing with sports that are much more a fabric of ALL demographics. The Golden Bear pointed it out himself, his sons are accomplished players but don't play anymore because their kids (his grandkids) are playing other sports.