For the past 20 years, Douglas Main of Deloitte’s Atlanta office has analyzed the golf and recreation industry for more than 3,000 golf-related businesses to help related businesses assess and capitalize on their target markets. A member of the Society of Golf Appraisers, Main does not expect a return to the heyday of the 1990s, but sees some promising signs of a financial upswing — including the return of Tiger Woods to No. 1 in the world.
Right now, the general outlook is that most people in golf feel that the industry is struggling to maintain its margins. We see some revenue increases that bode well for golf-course operators. On the flip side, there have been cutbacks in expenses and capital equipment, which has been an added challenge. While no one is predicting a return to what was experienced during the boom of the 1990s, we are seeing improving indicators in the housing, hospitality and leisure industries. However, despite improving signs, the industry struggles with the fact that there hasn’t been any big increase in corporate golf outings, for instance, or in sponsor events related to golf. That share is missing in the industry today.
Looking back, housing is one of the big factors that exacerbated the downturn in the overall economy and the golf industry. In Atlanta, the slower economy took a toll not just on employment and the golf industry in general, but in particular on private clubs.
At the same time, there has been a shift overall in the preferences of golf-course players and members. They realized there could be better value in variety. The ClubCorp group and Canongate group of courses in metro Atlanta allow members to play a number of clubs, which is a perfect example of offering enriched flexibility, variety and access.
A plus for the golf industry is its maturity when it comes to club offerings. Today golfers have many choices, ranging from affordable municipal clubs to high-end daily, semi-private to private clubs. That range of offerings gives the industry more stability.
Tiger Woods is the one figure in golf who can move the economic needle for the industry, although not to the degree he once did. Equipment providers are excited that Tiger Woods is back at No. 1 because more attention to golf means that side of the sport gets revved up, especially when he’s in pursuit of a major title. The TV ratings and overall interest is anticipated to climb as he gets closer to exceeding Jack Nicklaus’ record of 18 majors.
Overall, I would describe the mood of the industry as cautiously optimistic.
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