Tue Jul 15 2008US golf conference focuses on economic impact
(This article was published in Golf Business News June 2008)
US golf conference focuses on economic impact
A slowing in both course development and participation rates, the need to provide greater value in club membership and an increasing visible role for club general managers were all themes to emerge from the 2008 Golf Inc. Magazine industry conference in the US. Over 500 golf industry delegates from around the world heard from more than 90 US golf operators and executives across the Conference's 35 educational sessions, held at Miami's Doral Golf Resort (famous as the home of the 'Blue Monster' USPGA Tour venue, and recent host of the CA World Golf Championship won by Australia's Geoff Ogilvy) from 21 to 23 April.
With a main theme of "how to survive in today's golf market", the Conference focused on how the US and worldwide economies would affect new course development and player participation. The conference's opening keynote, titled 'A new vision for the golf industry', looked at what lies ahead for the US golf market, which currently accounts for approximately half the total number of golf courses in the world.
The sessions were mainly relevant in the huge $US76 billion (direct) and $US190 billion (indirect) US golf industry, but still easily comparable to trends witnessed in the Australasian golfing market. The US golf industry remained steady in 2007, according to National Golf Foundation CEO Joe Beditz, with new course openings roughly equally the recorded numbers of course closures. Nearly 70 percent of recent US golf developments have been linked to real estate projects, however new home sales in the US are slumping, mainly as a result of the recent 'sub-prime' mortgage crisis. In addition, player participation was forecast to decline over the next 20 years. Grouping its sessions into five different areas themed for management, marketing, owners, development and private clubs, topics covered included 'marketing ideas outside the box', 'how to drive membership sales', 'how to generate higher revenue per round', 'redevelopment opportunities at golf club facilities', and 'membership ideas'. Attending industry leaders offered various solutions as to how golf clubs can survive the current climate.
ClubCorp CEO Eric Affeldt spoke of clubs needing to offer more than just golf to remain economically viable, citing examples such as non-golf benefits for members and increasing reciprocity between facilities. Affeldt said that the company was currently considering building four-lane ten-pin bowling alleys and water parks at selected facilities. Additionally, delegates were advised that the industry needed to predict the leisure trends of current and future generations, and provide more family-focussed facilities and services to cater to their varied needs. Golf clubs that cater to families would benefit from the creation of a more casual environment that is welcoming and attractive for broader markets of members.
Royal Pines Golf Resort Executive Director Gavin Kirkman travelled from the Gold Coast to attend the three-day conference and said that many ideas remained relevant in the Australian market. "For instance, at many facilities a more relaxed dress code should be implemented as a way to attract a broader market of members and guests," said Kirkman. "We need to get people playing the game and not have an obstacle like a very strict dress code prevent them from potentially joining clubs and playing golf." The new vision for the golf industry presented at the conference also encompassed a renewed focus on player development. Solutions to offset projected decline in players included growing women's golf and the need for entry-level pricing for beginners. Revised entry-level pricing has been attributed to the resurrection of the snow skiing and ten-pin bowling industries in the USA. Growth in player participation needs to happen at the club level and golf club employees can help by actively promoting the game in their local communities.
The major international golf industry bodies have also joined together to try to get golf back as an Olympic sport to help promote the game worldwide. A return to good customer service was a talking point, as many club leaders have taken a more administrative role at their facilities. "Members like to see the General Manager out interacting with them," said Kirkman. "Operators will start needing to focus on different service expectations for the 'Baby Boomer' generation and the upcoming 'Generation X'". The changing face of club management in the US was also a major discussion point of the 2008 Golf Inc Conference. In the 1990s, there were only a handful of top operators worldwide with between 100 and 300 properties each, whereas now there are many new smaller golf management companies each with 50 to 100 facilities in regionalised areas around the USA. This business model was highlighted as helping to realise economies of scale in club operating costs as well as providing increased reciprocal benefits to their respective membership base.
It was also predicted that foreign investors would increasingly be looking at purchasing courses in the US due to the weaker US dollar. Networking functions included a golf outing, a 2007 Golf Inc Awards cocktail reception and dinner, Exhibition Hall, "invitation only" management luncheons, and an inspirational speaker on the final day.
Author: Mike Orloff Director Golf Industry Central ©2008
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Editor note: Gavin and Mike were the only Australian delegates at the conference and both played golf on the team that won the Golf Inc outing on the Blue Monster.