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Legatus Magazine

COVER STORY
Gerald Korson | author
Nov 01, 2018
Filed under Featured
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Back In Swing

During the housing boom of the late 1980s through the early 2000s, the golf industry in the United States experienced a boom of its own. Some 4,000 new golf courses were opened between 1986 and 2005, reaching a peak of 16,052 facilities nationwide. The ascendancy of pro golfer Tiger Woods in the late 1990s helped boost the sport’s popularity.

Then the subprime mortgage and credit crisis of 2007-2008 hit. The resultant losses in jobs and investment portfolios meant many recreational golfers had less disposable income for paying club memberships and greens fees, and less time for such leisure pursuits. During the intervening decade, the industry has experienced a contraction or economic “correction,” and more than a thousand courses have closed.

“The simple explanation is that home builders capitalized on the exuberance around golf to sell homes and to sell them at premium prices,” said Jay Karen, CEO of the National Golf Course Owners’ Association, based in Charleston, S.C. “The demand did not keep up with the increase in supply, which few anticipated. As a result, some golf courses over time were bound to face existential issues, and they have indeed in some markets.”

Yet golf remains a viable industry today, generating $84 billion in revenue with thousands of course operators running successful businesses, Karen emphasized.

Although things are tougher and the industry needs to keep evolving, “there is no existential crisis,” he affirmed.

GROWING THE GAME

Steve Mona, CEO of World Golf Foundation and a frequent Legatus event speaker, has seen much in his 39 years in the golf industry. While admitting the recession presented a “major challenge,” he believes it also “brought out the best in the industry.” That “best” is helping to keep golf not only alive but also thriving.

When the recession hit, “it became apparent that it was in the industry’s best interest to work together to grow the game and introduce it to new participants,” Mona said.

That led the nation’s major golf organizations – including the PGA Tour, the LPGA, PGA of America, the USGA, and the Masters Tournament – to form a coalition, called We Are Golf, to promote common initiatives in order to re-energize the popularity of golf in the United States.

“Representatives throughout the industry are actively engaged in work aimed at making golf look more like society,” Mona said. Among the initiatives promoted by We Are Golf are those seeking to attract more women, young people, millennials, and minorities to the game.

One such initiative is The First Tee, a national player- development program that exposes youths to golf through programs offered through 150 chapters, 1,200 golf facilities, 1,300 agencies that serve youths, and the physical-education curriculum at more than 10,000 elementary schools nationwide. “Our philosophy is to bring The First Tee to where the kids are,” Mona said.

Then there’s the PGA Jr. League, which presently has more than 40,000 adolescent boys and girls participating in recreational golf as a team sport.

Karen sees player development as one of the success stories of the industry’s efforts to grow the game.

“Youth golf is quickly turning into a team sport,” he noted. “Gone will be the days when parents didn’t want to steer their kids toward golf because it was more of a solitary pursuit.”

Amid the growing research about the injury risks of some popular sports, golf stands in sharp contrast. “Golf is a relatively safe sport, and it is lifelong,” Karen said. “Compare that to some of the other contact sports, and we are seeing parents migrate their kids toward our universe.”

The player-development focus is also increasing diversity. The First Tee’s chapter programs have nearly equal representation between boys and girls and are drawing kids from across ethnically diverse backgrounds.

“We are witnessing that the gender and ethnic diversity among the youth participating in golf is rapidly changing the face of golf,” Karen said. “The base of golfers twenty years from now will more closely mirror the broader demographics in America than it ever has.”

TECHNOLOGY’S EFFECT

Douglas P. Dudley, a Legate of the Greenville Chapter, has witnessed changes within the golf industry from another angle. Back in the late 1990s, he patented a cart-based electronic device using GPS technology – then in its infancy – by which golfers could determine the distance to the pin and the location of bunkers and hazards along the way.

“The value of knowing what lies ahead on the golf course is essential to good play, and even average golfers benefit from the information,” Dudley said. His system also provided revenue benefits to golf clubs by speeding up play and providing onscreen advertising whenever the cart was moving.

His system, called Yardmark, even calculated and simultaneously broadcast current location data corrections to compensate for the “selective availability” (SA) error, a degradation of public GPS signals that limited accuracy for national security reasons. “This allowed us to give yardage accurate to within two yards, when a hand-held device could be 20 yards off,” Dudley explained.

Technology has changed dramatically, however. Not long after SA was eliminated in 2000, ordinary smartphone apps could perform as well. Now “even hand-held devices can achieve two-yard accuracy,” he said. “If you look at your smartphone or a GPS watch, you can see how far GPS has come in 20 years.”

Although Yardmark was “cool at the time,” Dudley said it is now “just a 25-year-old technology footnote.” Yet he anticipates making another impact on the game soon – he has patents pending for a new product that he says “will truly revolutionize” the golf industry.

PLAYING THROUGH

Golf appears to be on the upswing again — and even Tiger Woods is back, having won his first tournament in over five years this September.

Despite the post-recession corrections taking place, the new initiatives promoted by World Golf Foundation and the We Are Golf coalition are having the desired effect, Mona said.

“Examining the state of the game today in 2018, there are positive signs that a whole new generation is getting excited about the sport, both from a fan and a participation perspective,” he said. Statistics bear this out, he noted: there are some 24 million golfers in the United States, and another 14.9 million who are interested in playing. In 2017, some 2.6 million people tried golf for the first time.

Another 8.3 million played golf at Topgolf — a high-tech, three-story driving range where participants hit micro- chipped golf balls from tee-box bays and score points for accuracy — or at simulators or at conventional driving ranges without actually playing on a course, Mona added.

“Fan engagement in the game is at an all-time high,” he concluded, “due in part to the myriad of vehicles in which fans may interact with the sport.”
Karen shares Mona’s optimism.

“The fact is, golf has something for everyone, and we believe all generations of all types of people will continue to discover there is no activity that is quite as satisfying — as an individual pursuit, or as a way to bond with friends, families, and even strangers — than golf,” Karen said.

“Having a versatile product and keeping the customer in focus is how we will thrive through the economic cycles down the road.”

GERALD KORSON is a Legatus magazine staff writer.

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