1.) Trends to Watch in 2010 – The End of Golf

1.) Trends to Watch in 2010 – The End of Golf

 

Golf has hit a brick wall, a veritable trifecta of bad luck.

Rest assured, golf won’t be going away anytime soon, but the current industry slump is only the beginning of a much larger trend.

When you combine the fact that there are too many golf courses, declining revenue streams, record number of golf course bankruptcies, the implosion of the game’s only superstar, Tiger Woods, and an emerging youth population who would rather play Wii Golf than real golf, it becomes easy to see red flags getting raised instead of American flags at many of the nation’s country clubs.

The number of U.S. golfers peaked in 2005 at 30 million. Experts are estimating that most golf courses have lost 30% to 50% of their worth in the last two years. So far only 114 of the nation’s 16,000 or so golf courses have closed in the first 9 months of 2009, according to the National Golf Foundation. But that number masks the thousands currently operating in Chapter 11.

Most importantly, the financing has dried up. A bankrupt golf course doesn’t lend itself to any other development, and this is particularly true if the course is in the middle of a residential development. The neighbors won’t allow it. In short, golf courses are simply bad collateral.

PREDICTION: Within the next 10 years over 25% of all golf courses will fail.

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OPPORTUNITY: There will be two significant opportunities arising from golf’s misfortune. The first, a bargain hunter’s dream of being able to purchase a first-class course out of bankruptcy for pennies on the dollar. With substantially lower debt and a more efficient business model, many golf courses will once again survive and thrive.

The second opportunity will come to those who devise a logical new development concept for golf courses. Courses come with vast primo landscaped acreage, and a set of neighbors who will torpedo anything that somehow diminishes the natural beauty of the community. It is a challenging environment, but one with huge upside for the right business model.

By Futurist Thomas Frey

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8 Responses

  1. Yes, I agree. A big factor is everyone is working harder now to maintain lifestyle. So 4 – 5 hours to play golf a real luxury!

    I am working with a group to create Golf Centers w/fitness. 9-hole course, 9-hole chip&putt, heated driving range, short play practice areas, gym, restaurant!

  2. The ongoing change in demographics may yet save struggling golf courses that cater to older golfers (i.e. those near/in retirement communities).

    Also, Rachael’s 9-hole course concept sounds interesting. Golf courses need to become community centers offering more services, keeping customers on-site longer. For example, faster 9-hole rounds may leave more time for after-work golfers to spend more $$ in the restaurant/bar. Remember what saved many gas stations a few decades ago – they added stores offering more “services” (coffee, snacks, ATMs, etc).

  3. Tom Joseph

    Although I agree with most everthing you’ve said in the article, I would like to hear your opinion on the impact of the baby boomers. This demographic group is entering retirement, and many look forward to enjoying the liesure life of affordable golf in their local communities. Do you believe that factor could influence the future opportunities?

  4. admin

    Tom,

    Your point is well taken. As the baby boomer population bulge moves towards retirement, there would seem to be a resurgence in golf. On the other hand, we are transitioning into a faster pace, more distracted society. This will cause the golf industry to reinvent itself to shorter games, catering to a more impulsive consumer base. Carrying on a golf game where everyone is checking their iPhone for email updates and text messages becomes a radically different game.

    I’m still of the opinion that we have simply built too many golf courses. The industry lost much of its rarity, and by extension, much of its status and privilege.

    In the end, it boils down to economic viability and whether the banks will again start lending money.

    Tom

  5. That was great golf by Mickelson in the Masters.

  6. A new Hybrid golf ball has been developed that creates the same traditional golf game, but on compact courses using a smaller ecological footprint. These new courses are designed to a higher enviro-sensitive level, requiring much less water and chemical application and address the playing issues of time, cost and frustration.

  7. Dry Scalp Treatment :

    the golf courses in our area have very green and very healthy lawn area that everyone adores”-‘

  8. Sally

    What has happened since you made this prediction?

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