The definition of purgatory is a place where the souls of sinners suffer and atone for their misdeeds in life before going to heaven: Think the ghost of Jacob Marley who wears his burdens in Charles Dickens' Christmas Carol.
The golf business has been going through its own version of perdition for several years. After more than a decade of contraction, the golf industry might be stuck in this state of limbo for much longer than anyone ever thought possible.
A total of 120 golf courses closed in 2018, while only 30 new courses opened, resulting in a net loss of 90 18-hole equivalents.
The news marked the 13th consecutive year that more courses closed than opened, according to the annual Pellucid Corp., Edgehill Golf Consulting State of the Industry reported delivered at the recent PGA Merchandise Show.
Back in the mid-2000s, when golf course closings began outpacing openings in the wake of the "build a course a day" mantra, some industry stakeholders suggested it might take 10-15 years for the market to reach that magical place where supply and demand peacefully coexist.
Since then, 1974 golf courses (measured in 18-hole equivalents) have closed, been plowed under, redeveloped and repurposed vs. 586 new openings, for a net loss of 1,388 EHEs. As demographics constantly shift and the rate at which golf courses close (about 1 percent of the total inventory each year) closely mirrors the pace at which the game loses players, the market might never reach equilibrium, according to Pellucid's Jim Koppenhaver.
Other key indicators from the report, rounds played nationwide dropped about 5 percent from 448 million rounds in 2017 to 427 million rounds last year, and rounds per 18-hole equivalent dropped by about the same percentage to 31,700 rounds per year per facility. The high for rounds played in a year was 518 million in 2000.
The game also lost about 100,000 players last year, down from 20.9 million two years ago to 20.8, a difference the industry dismisses as "flat", but even flat, or marginal losses add up over time. The game has lost 7 million players since golf course supply contraction began 13 years ago and 9 million since 2002.
Currently, there are about 13,500 golf courses in operation across the country. At the current play rate, equilibrium will be reached when the the number of 18-hole equivalents drops to 12,200. The problem is, the play rate is a fluid number.
Unless/until rounds trend reverses, supply contraction is the only path. . . . The definition of purgatory, 1 percent rounds decline matched to 1 percent supply reduction. We never reach equilibrium.
On the other side of that coin, if the number of golf courses in the inventory is going to stick at 13,500, rounds played will have to climb to 472 million - and stay there - to reach equilibrium.
"Unless/until rounds trend reverses, supply contraction is the only path," Koppenhaver wrote.
"The definition of purgatory, 1 percent rounds decline matched to 1 percent supply reduction. We never reach equilibrium."
For years, the game has been carried by baby boomers who fall into the category of committed golfers, or those who play 40 or more rounds per year. As that demographic decreases in numbers, the results are now showing in rounds played, as the industry lost some 300,000 committed golfers. Those who play on a casual level increased by the same amount, while another 100,000 people walked away from the game.
Increases among might be attributed to off course entities like Topgolf, which is attracting the demographics traditional golf is seeking.
A total of 70 percent of traditional golf rounds are played by those 35 and older, and only about one-fourth of all players are female.
In 2011, there were 10 Top Golf facilities nationwide. This year, there are expected to be 60 facilities across the country earning $1.5 billion in revenue. Last year, off-course facilities like Topgolf attracted 13 million visitors, 51 percent of whom identify as non-golfers, 70 percent are under 35 years of age and 32 percent of which are female. The good news is that about 29 percent of those who attend these off-course facilities.
Whether it will actually translate to more rounds at traditional golf facilities, you'll have to wait. But that's nothing new.