For more than a decade, the golf industry has been collectively sucking wind.
The number of people playing the game is decreasing and subsequently the number of rounds played is shrinking accordingly. Trade show participation is way off and the supply of golf courses in the market has been on a steady decline since the Bush Administration.
There was a bit of good news in 2019, according to Jim Koppenhaver of Pellucid Corp. and Stuart Lindsay of Edgehill Golf Advisors, who delivered their annual State of the Industry report during the PGA Merchandise Show.
An estimated 432 million rounds were played in 2019, according to Koppenhaver. That number is up from 426 million in 2018 and marks the first bump in rounds played since 2016 and only the second time since 2000.
"We're losing our consumer base slowly, and we're losing rounds slowly," Koppenhaver said. "Other than that, we're good."
The number of golfers in the market in 2018 (the latest figures available for that statistic) dropped 200,000 from 20.8 million in 2017 to 20.6 million. That number is down 400,000 since 2015. That might seem like a lot, but doesn't sound like so much compared with the period from 2010 to 2015 when the game was shedding an average of about 1 million players per year.
We're losing our consumer base slowly, and we're losing rounds slowly. Other than that, we're good.
The game has lost 8 million players since golf course supply contraction began in 2006 and 10 million since 2002.
"We've been shedding a million a year. So, 200,000 is not bad trend-wise, but the fact of the matter is we ain't gonna get to glory shedding 200,000 golfers a year," Koppenhaver said.
If there was any bad news in that nugget it was that the number of committed golfers, defined as those who play 40 or more rounds per year, dropped by 4.7 percent. Those people didn't leave the game, but rather played fewer rounds, dropping them out of the committed category, Koppenhaver said.
The supply of golf courses in the industry also dropped again in 2019 as the market moves toward ever elusive equilibrium. For the 15th straight year, golf course closures outnumbered openings.
A total of 103 courses closed last year, compared with 19 openings for a net loss of 84 courses measured in 18-hole equivalents. Fifteen years ago, when negative growth in golf course supply became a reality for the first time since 1946, industry analysts at the 2007 PGA Show said it would take 5-10 years to reach equilibrium, when supply and demand meet. During the State of the Industry address, Koppenhaver said it could be at least another eight years before that occurs - based on today's figures. The problem for golf is the number of players, courses and rounds played decreases every year, thus making equilibrium a moving target.
Since 2006, 605 courses have opened and 2,007 have closed for a net loss of 1,472, bringing the net supply of courses nationwide to 13,408, according to the study.
Since Koppenhaver and Lindsay have been delivering the State of the Industry report 20 years ago, some have accused them of being naysayers. Koppenhaver says they're just realists. Just before the presentation started Koppenhaver said he was happy to be able to report some good news this year, speaking specifically about the bump in rounds played and a marginal loss of players.
It's not exactly a tail wind, but there is a sense, he said, that the game no longer is flying into a strong head wind.
"This is our dose of reality," he said. "When I started doing this with Stuart by my side, people said 'oh, you guys are industry contrarians, you know, you only have bad news.' I said 'what purpose could we possibly have for bringing bad news to an industry that I hope to make my living off of?' So I think people have realized over time we're analysts. We look at numbers, and we try to make informed decisions from the numbers. And history has borne out much of what we said back in 2000 has come to pass for good or for bad."
During the past few years, industry analysts have argued that alternatives to traditional golf, such as Topgolf and other off-site experiences have helped introduce the game to new audiences. Koppenhaver disagreed.
This is our dose of reality. . . . We look at numbers, and we try to make informed decisions from the numbers. And history has borne out much of what we said back in 2000 has come to pass for good or for bad.
Ten years ago, there were 10 Topgolf facilities nationwide. Today, Topgolf is enjoyed by more than 20 million people in nearly 60 markets nationwide. And there are other similar off-course experiences. In that same time, traditional golf has lost almost 6 million players.
It's no wonder the golf industry has struggled so much in the past 15 years, Koppenhaver said. What other business has to manage a retail outlet, restaurant and a farm, he asked?
Golf has had the stigma of being a rich white man's game, but that is not the growing segment of the population, and golf has not been quick to catch on with minority populations and younger generations like it has with its bread-and-butter market. It will require a new way of thinking and a new way of doing business for golf courses owners, operators, superintendents and employers who do not want to be a statistic in the quest for equilibrium.
To illustrate the need for a new way of thinking, Koppenhaver posted a slide that shows how we think of strangers has evolved from protecting kids from people they don't know to hiring services like Uber: In 1998, our parents told us not to get into cars with strangers. In 2008, they told us not to meet strangers on the Internet. Today, we hire strangers on the Internet to pick us up in their car.
