It is a story as old as time… Supply & Demand economics!
The face of golf changed during the past 3 months. Most courses were closed and generated $0 in revenue over that period. However, once the shelter in place restrictions were eased/lifted, the flood gates opened and golfers flocked by the tens of thousands to play. This created a unique dilemma.
“In these last few weeks, we’ve really seen an explosion,” Jeff Foster, senior vice president at GolfNow, told us. “We’ve never seen this level of demand for golf.”
For the first time in recent history…we had more golfers than tee times! This combined with the mandate to do single rider carts along with larger spacing between tee times gave way to a huge demand for a very small supply.
As you know when this happens in economics, the demand outweighing the supply, we see a surge in cost and a race to get the supply (Remember the Toilet Paper a month ago 😊)…Thus, many courses have paused discounting for the next 30 days as they are completely sold out while selling at peak rates.
That said, there is no need to panic. We fully expect more of a sense of “normalcy” to return in June. At that time we will begin to re-introduce the golf deals you have become accustomed to seeing at ClickitGolf. Keep checking back as courses are coming back on daily. We plan to have most courses back by the late June or early July!
Linsey Chamberlin’s first time playing golf in eight years was on Mother’s Day weekend amid a global pandemic.
After weeks of staying at home and without their usual Mother’s Day options of lunch and a pedicure, Chamberlin and her brother decided to introduce their mother to the game by playing nine holes at Friend Country Club, a public course outside Lincoln, Neb.
“We’d been stuck in our house the last eight weeks, and we didn’t want to go to her house to just sit around,” said Chamberlin, 27, who was on her high school golf team but gave up playing in college after getting frustrated with the mental aspects of the game.
Despite safety precautions — no ball washers, no rakes in the sand traps, a foam pool-noodle ring for touchless ball retrieval from the hole, and a closed clubhouse — “we had a blast,” Chamberlin said. “I didn’t play as terrible as I thought I would after not playing for eight years, and my mom played better than I did my first time out.”
Across the country, Americans remain deeply divided about leaving the house for work and leisure activities, except, apparently, when it comes to golf, giving an unexpected jolt to a sport that has seen declining popularity.
“The biggest surprise for us is that there has been no difference in the days…Wednesday’s been no different than Saturday. Those first three, four weeks, we sold out every tee time…every day,” says Foster. “The most amazing thing to us is that people will look for a 9:30 am tee time. They see the earliest available is 1:25 pm. Before, they couldn’t run away fast enough. This year, they go, ‘I’ll take it.’ People aren’t as busy as they have been in the past. They have more flexibility and are squeezing in golf rounds between zoom calls.”
For now, course operators are gladly sending out all of the golfers they possibly can. Courses are filling times from 5:45 in the morning to 6:30 at night and putting out close to 300+ rounds per day. Foster says, “The golf side is going crazy, we’ve got people teeing off at 7 o‘clock at night—and it gets dark at 8:30. They ask when the last tee time is, and we tell them, ‘As soon as you won’t pay us anymore.’”
Most everyone in the golf industry would agree that there hasn’t been a time in the centuries-old game like this, and it’s required flexibility and creativity among operators that is heretofore unseen. Who could have ever envisioned using plastic shields to place between golfers in carts, or a pop-up device in a cup to help retrieve the ball?
On the flipside, some operators are looking at the glass as only temporarily full. “I’m cautiously optimistic,” said Danny Lane, the general manager of California’s Costa Mesa Country Club, a 36-hole municipal facility in Orange County. “But I wonder if this is something we can maintain. I’m fearful that an economic slowdown may be coming.”
It’s too early to say whether the heightened demand will continue, especially in the middle of an economic recession, or how much the cost of safety protocols will affect course revenue.
Lane goes on to say, “Our customers who currently have discretionary income haven’t been able to spend it elsewhere. There’s no travel, no concerts, no sporting events, no dining in restaurants—nothing to compete with us. I know that’s helped us substantially, but I don’t know that it can sustain itself when more and more things continue to open up.”
But some in the golf industry are hoping that the interest in a relatively safe outdoor activity — and the expected return of the PGA Tour to television on June 11, at a time when there are few alternatives for watching live sports — could boost enthusiasm for the game.
“People are itching to get outside,” said Stuart Lindsay, a principal with Edgehill Golf Advisors. “They can’t go to a bar. They can’t go to a restaurant. They can’t play softball. Golf is one of the few things they can do that’s a variation of riding a bike or walking the dog.”
After months of binging on Netflix and jogging around their neighborhoods, many Americans appear to see golf as an escape. It involves acres of outdoor expanses for natural social distancing, and advance tee time bookings help control the flow of people into all that open space.
In a recent Washington Post-University of Maryland poll, 41 percent of Americans supported their states allowing the reopening of golf courses, a greater percentage than for any other type of business measured in the poll.
Many courses are reporting increased demand. “Our rounds are through the roof,” said David Pillsbury, the chief executive of ClubCorp, which owns or operates 173 private golf or country clubs nationally. “It’s up 25 to 30 percent over the prior year. Our members are using the club more than they’ve ever used it before.”
Some data shows a big leap in demand for public golf courses, too. Between April 23 and May 5, the number of rounds sold online at public courses that remained open throughout the coronavirus pandemic were up 60 percent over the previous year, according to GolfNow, an online tee time reservations platform used at nearly 7,000 U.S. courses. “There’s just a massive amount of demand,” said GolfNow Senior Vice President Jeff Foster. “The big question is will that demand stay.”
If more people like Chamberlin and her family — first-timers, younger players, lapsed golfers — are playing more often, the sport might experience a boost after years of decline, some in the golf industry say.
In 2002, nearly 30 million people played golf at least once a year, according to Pellucid Corp., a provider of industry information and insights. But that number had steadily declined, leveling off in the 21 million range starting in 2015. (The National Golf Foundation, an industry association, put the number of golf course players at 24.3 million people in 2019, with another 9.9 million who only use places like driving ranges or venues such as Topgolf.)
“We think this ultimately can actually be a real growth opportunity for the game,” Seth Waugh, the president of PGA of America, said in a conference call with reporters on May 5 announcing industry guidelines for safely returning to the game. “We think there’ll be obviously a lot of pent-up demand. But we also think that given those specific natural advantages that we have, that we may draw new and interested people.”
Adrian Stills, who runs the Osceola Municipal Golf Course in Pensacola, Fla., said he saw an 18 to 20 percent increase in rounds played during April, when Florida’s beaches were closed but golf courses remained open. Even when the beaches reopened, he said, he’s still up 10 percent over the previous year, with locals replacing snowbirds as customers.
“I started noticing a lot of new faces — a lot of younger new faces,” he said. “A lot of them had been in quarantine, working from home — they just wanted to get out and have an activity they could enjoy, and they chose the golf course. I’m hoping that continues.”
In San Francisco, a golf course offered a different kind of escape: The Presidio Golf Course, located within a former Army post, was converted into a public park for a time during the shutdown. “It was a unique opportunity for nongolfers to come check out what is a beautiful golf course,” said Mark Luthman, president of Touchstone Golf, which operates the course for the Presidio Trust.
Touchstone operates 38 courses in all, and Luthman said rounds played have been higher — “in some examples, dramatically.” Although he’s encouraged, Luthman also warns that it’s early. “It’s difficult to make any large sweeping conclusions about the business,” he said. “Is this just the initial pop of people who are coming out to play golf because they’ve been cooped up in their house for six or seven weeks, or are lapsed golfers coming back in greater numbers and golf is going to be experiencing a bit of a renaissance? I think it’s too early to say.”
Even as people flock to get back on the greens, the impact on golf courses could be uneven, depending on local restrictions and how reliant courses are on other forms of revenue.
Some safety measures require relatively little expense, such as no-touch precautions like removing ball washers and retrofitting cups to prevent handling the flags. But there are additional labor costs for doing extra sanitation of carts between players and positioning more workers on the course to ensure social distancing.
Other precautions may impinge on revenue by reducing the number of golfers. Courses in some states remained closed for weeks in March and April. To help control the flow of people onto the course, some states are requiring tee time intervals of 15 or 16 minutes upon reopening, rather than every seven to nine minutes. Some places, such as New Jersey, have limited groups to twosomes except for families isolating together.
Requirements can also cut into cart-rental revenue, said Pellucid President Jim Koppenhaver, if courses can only charge for single occupancy or run out of carts.
At Renditions Golf Course in Davidsonville, Md., where golf resumed earlier this month, the single-occupancy cart requirement means General Manager Steve Peterson has had to space out tee times to wait for carts to return, reducing overall capacity.
“Demand has been really high, because people are just now being allowed to get out,” Peterson said. “But at the same time, our supply of number of tee times available has gone down because of [cart] guidelines.”
Greens fees may be what drives revenue at public courses, but other sources of income, such as wedding receptions or banquets, have been postponed because of the virus. Shuttered pro shops and dining rooms that remain closed or at reduced capacity also are likely to ding sales.
High unemployment and less disposable income could prompt some golfers to rethink membership dues or frequency of play. The average price of a round of golf at a public course is $35, according to the World Golf Foundation. “As the economy goes, so does golf,” said Bill Golden, chief executive of Golf Tourism Solutions, a marketing agency that represents the golf industry in Myrtle Beach, S.C. “If we have a prolonged economic recession, that’s going to have an impact on the golf business.”
Some resort-based or destination courses are bracing for a falloff in business. Golden’s agency projects a 61.5 percent drop in revenue for Myrtle Beach-area courses in the first five months of 2020 compared with 2019, despite remaining open.
Yet others predict that the flexibility of working from home, the lack of commitments to afternoon and weekend youth sports and less traveling overall could prompt golfers to play their local courses more often.
People probably won’t be “jumping on planes and traveling to Europe for the summer,” said Greg McLaughlin, chief executive of the World Golf Foundation, who added that open courses are seeing rounds at an “all-time high.” “People are working from home. Do you have an opportunity, potentially, in the afternoon to slip out and play nine holes if it’s light until 8 o’clock? We think it’s going to create another alternative.”
Cathy Harbin, the owner of Pine Ridge Golf Course in Paris, Tex., had a group of infrequent players tell her one recent evening that “now we can come here, get in our single carts, and we can still play golf and honor social distancing,” she recalled.
“Maybe these were guys who were meeting for a drink somewhere else” before the coronavirus, she said. “My prediction is we’ve created a new normal for them.”
Lane agrees that it is still too soon to tell how this will affect golf in the long-term. “Here’s the catch: Can we survive when the hammer comes down from the bank…Golf’s true test may come in August, when the extra $600 people are receiving in unemployment runs out, and at the same time there will be more sports and entertainment options. Only time will tell, but for now we are enjoying the ride.”