The golf industry won't receive many sympathy cards these days—not with the dire state of banking, housing and SUV production. But golf, we shouldn’t forget, is ailing, too.
The number of golfers in the U.S. plummeted from 30 million in 2000 to 26 million in 2005, according to the National Golf Foundation (and there’s no indication it has rebounded since), and hundreds of the glut of courses built in this country since 1990 (mostly daily-fee tracks) have gone belly up. Blame that supply-and-demand thing.
Henry Paulson’s probably not too concerned, but you can bet the kingpins of golf are sweating like Sergio Garcia over a meaningful five-footer. Actually, they’re in full crisis mode.
To combat the retraction in growth, the World Golf Foundation—the United Nations of the golf industry—announced yesterday its version of the government’s $700 billion bailout plan. Over the next five years, fledgling golfers at some 5,000 U.S. golf facilities will be able to buy five lessons (covering basic skills, rules, etiquette and values) for $99. The plan is designed to attract 700,000 new golfers by 2013 and to generate some $700 million in new golf spending.
“Obama talked about the 'fierce urgency of now,' and I think you could say the same thing about golf,” David Fay, the USGA’s executive director, told Bloomberg News. “We’re all interconnected in this. Whether it's the financial-services industry, the auto industry, or media, we all have to work together. Urgency. I like that word.”
Bloomberg News also got some forward-thinking insights from Casey Alexander, a golf-industry analyst with New York-based Gilford Securities, who said golf is suffering because the game’s leaders turned their backs on public golfers. “This is the first time I have seen them come up with a program driven towards the right kind of facility. Somebody has finally recognized where the new-golfer rubber meets the road and they have to drive in that direction.” As more people scrutinize their spending on leisure activities, such as golf, private country clubs will need to develop more “a la carte” memberships that focus on families, not the die-hard golfer, Alexander said. The sport's growth will come from daily fee and public golf facilities. “If you’re trying to get new golfers, that's the most realistic way to get them. Country clubs are really going to struggle in this environment. People aren't going to pay $18,000 for a membership before you even stick a tee in the ground. And unless they adjust, there are going to be a lot of country clubs that are going to go down the tubes.” You have to wonder where that leaves the spate of glitzy, new-money clubs that have opened in recent years, places like Liberty National and Bayonne, both in New Jersey, or Sebonack and Friar’s Head, both on Long Island. Eighteen grand won’t cover your membership at any of the above—it’ll barely cover your bar bill.