I am very old so this is hardly my first downturn rodeo.
2001 was a bad double-whammy with the tech stock bubble bursting in the spring and then the 9/11 attacks. The very sucky 2009 recession was obviously a benchmark for many of us because it lingered for years and interrupted many careers.
But right now let’s talk about 1991 when the United Auto Workers declared a general strike and half of Detroit was unemployed for months.
Guess what happened to golf in the area? It boomed! At least in the sense that rounds grew handsomely for a while because people had time on their hands. Once the strike was settled, Detroit stopped being a golf paradise and went back to being…er…Detroit.
That’s essentially what we’re seeing now. Anecdotally we hear about full tee sheets around the country. We’re told there’s a shortage of pull carts. Starter sets are supposedly flying off the shelves at Target and such. We’ve seen glowing articles in the Washington Post and elsewhere about how people are flocking to courses because it’s a healthy outdoor pastime that meets social distancing criteria. The fact that governors mostly saw the logic of this and a lot of courses never closed and nearly all of them are now open for play is nothing short of a miracle.
I predict that it’s only a matter of time before one of the same reporters who wrote previously about how millennials are killing golf will now pen an insightful piece about how a pandemic rescued the game from certain death.
Both of those are fine notions and, of course, completely wrong.
Millennials actually seem to like golf but probably not enough to make up for the gradual decline in geezers. Meh.
And if you think coronavirus is going to revitalize the business of golf and we’ll all live happily ever after, I know lots of people who would be pleased to sell you a course – dirt cheap – right now.
So let’s get real for a minute and examine a few important things about our current situation:
1. The number of rounds played is a wholly unreliable indicator of the overall health of the golf business. People cheered in 2009 when rounds seemed stable even as the recession roared. What they ignored was that SPENDING at golf facilities was way down. Mike Hughes, the head of NGCOA at the time, called it the Walmart effect. During a downturn people who normally shopped at Nordstrom’s or Macy’s still wanted to shop but not spend as much money, so they went to Walmart. Right now the people getting helped most by the COVID bump are accessible munis and mom-and-pop shops that sell rounds of golf for a buck a hole. (And, BTW, weather is still the biggest factor impacting rounds played.)
2. More play right now isn’t the start of some megatrend, it’s a short-term impact. Don’t get me wrong…it’s great to get people back on golf courses. But as other recreational options open up and the real economic impact of the pandemic starts to hit middle-class wallets, the COVID bump will flatten. Cash flow will become an existential problem and a pile of current operators will fail. (Note that I did not say those failed courses would cease to exist. I’ve learned over 30 years that it’s almost impossible to kill even the worst golf course. There’s always some dumbass who thinks they can bring a zombie back to life.)
3. The high end is the high end. Yes some elite clubs will take a hit as the commercial real estate market goes down the crapper and some wealthy members become less wealthy. But many of the top 1000 clubs will shrewdly use this as another opportunity to invest and grow and consolidate business from weaker facilities in the area. These were the same clubs who used 2009 as a launchpad for a longer-term effort to remodel and position themselves for the future. This will continue to widen the gap between the haves and the have nots from a revenue and long-term survival perspective.
4. The facilities in the middle are in the most peril, particularly if top-down management isn’t great. They have way more overhead than golf-only facilities, thus their business model relies more heavily on non-golf revenue. Specifically dining, drinking, weddings, events, meetings, etc. Like it or not, social distancing is not going away anytime soon. F&B has been a money-loser forever but now big clubhouses and indoor amenities are potentially a giant albatross around the neck of many midscale facilities. They’ve also been slammed by cancellations and that revenue can never be recouped. Cost-cutting becomes the only option and that’s a one-way ticket to mediocrity. Suddenly the bare-bones, golf-centric approach of Sweetens Cove and others like it with low overhead looks pretty damned good.
5. Superintendents, as always, will do the best they can with what they have. Honestly, most facilities don’t deserve the super they have. Y’all were the hero problem-solvers on pandemic restrictions from day one. I love the fact that within a few weeks there were at least a dozen options out there for “COVID cups” ranging from fancy lifts from $500 a set to pink pool noodles from Dollar General. And many of you continued operations or geared back up from a closure with skeleton staffs. I actually worry a little about the law of unintended consequences in that regard. How many facilities will see what their super and a couple of other workers accomplished during quarantine and think, “Hell, why do we need 10 people?” Sometimes turfheads are their own worst enemies in that respect.
So, all that said, I am shockingly optimistic about the future of the game itself. I sincerely believe golf as a pastime is well-suited the new normal of distancing and a renewed interest in being outdoors. The lurking threat of coronavirus (or whichever bug comes next) is also another big reason – beyond concussions – that parents are going to be loath to let their kids play traditional team/contact sports. If we can reach mommies with the message that golf is safer for kids and they can enjoy it too, we win.
(Note: I am not being misogynistic here. It’s a simple fact that mommies run the world when it comes to kids, activities, school, spending, etc. Duh.)
But as excited as I am about more people trying the game, I am far less optimistic about the future of our business model because most facilities hate change. They are sitting around right now thinking “Gee whiz I hope things are back to normal soon.” News alert! Normal left town a couple of months ago and it ain’t coming back. The only way to survive or even thrive is to DO SOMETHING!
Change – or at least the consideration of change – is mandatory for facilities stuck in the middle of the COVID crossroads right now. Here are a few questions I think your facility should ponder:
How do you take advantage of this once-in-forever opportunity to attract kids and families into the game?
Would you truly make a commitment to really welcoming kids or would you still find ways to keep the rug rats off the golf course?
Are you ready to change your business model to reduce non-golf operational costs dramatically enough to make a golf-centric facility really viable?
Would you actively promote walking even if it means reducing cart revenue?
Are you ready to totally walk away from traditional on-course amenities like ball washers and water coolers that demand labor and may represent a viral point of contact? How about bunker rakes?
Would you invest in concepts like Longleaf Tees to make the traditional game less onerous for kids, newbies, occasional players and old farts like me who can barely hit it 200 yards?
Would your facility have the balls to ignore the noisy demands of the usual gang of low-handicappers and focus on the bigger opportunity of fitness, friends, family and fun?
Golf is at a crossroads. Facilities can choose the path of change or they can keep wishing for Tiger to start winning again and for the old normal to come back soon. If your course decides just to hunker down and hope for the best, that’s cool by me. But you do so at your peril. Just remember what Stephen King once wrote: “Wish in one hand and shit in the other and see which hand fills up first.”