I’m not big on predictions, but I do keep an eye out for silver linings. There’s a chance, if we’re lucky, that the current economic crisis could make golf a better game. I base this hope on the conversations I had with several smart people in the golf industry and on what the game went through in the Great Depression. The similarities between golf in that era and this are not precise, but they are at least as strong as the similarities between the stock market crash of 1929 and the current meltdown, and my economic journalist colleagues are all over that.
For golf, the 1920s were a Golden Age, headlined by a boom in new courses and the hero worship of Bobby Jones. The 1990s into the early 2000s have often been called golf’s second Golden Age, epitomized by another explosion of new courses and the glamour of Tiger Woods. Most golf histories depict the 1930s as a bleak and uneventful period: Jones retired from competition in 1930 after winning the grand slam and golf clubs by the hundreds were boarded up. But the era actually was transformative, says Rand Jerris, director of the US Golf Association Museum in New Jersey.
“This was the period during which golf became acceptable to a much wider range of people,” he says. Many of those defunct private clubs reopened as public ones. The works progress administration built at least 100 new golf courses nationwide, opening up the game to thousands. Women, forced by circumstances to work outside the home, took up the game in unprecedented numbers. And the professional tour, though it struggled financially, began to establish itself in the public imagination as charismatic pros such as Walter Hagen and Byron Nelson stole the limelight from the blue-blood amateurs, such as Jones, who had dominated golf until then. When golf blossomed again after World War II, it was a different game.
Changes on that scale are not possible now. Golf these days is a $76 billion (around Rs3.8 trillion) industry, according to a study commissioned by the PGA of America and allied groups. But if the economy experiences a prolonged recession, there could be some significant long-term consequences for golf.
Illustration: Jayachandran / Mint
Golf through the last few downturns has fared relatively well. “It isn’t recession proof, but neither does it have those 20% or 30% peaks and valleys that some other industries have,” says Tom Stine, a co-founder of Golf Datatech, a leading industry statistic-keeper. Golf rounds played this year were down 1.4% through September, the latest month for which data are available, and retail spending on equipment was down 3.4%, according to Golf Datatech. “That’s down, but it’s not that bad,” Stine says.
The game’s resistance to economic swings is rooted in the avidity of its core players, who number (depending on the definition applied) from eight million to 12 million, out of 29.5 million US golfers total, according to the National Golf Foundation. “Golf is their passion, it’s what they do, it’s central to their lives,” Stine says. They don’t stop playing. Golf’s core players are also a bit more affluent than typical consumers, which further insulates the industry from slowdowns. “When it comes to retail sales in a recession, core golfers are like bobbers on the fishing line. They’re the last to go under and the first to pop up,” says Casey Alexander, the golf industry analyst at Gilford Securities in New York. Alexander expects retail equipment sales to fall 8% or more for the second half of this year and into next year, which is more than in previous downturns, but for golfers to spend freely to catch up once the tide turns. “Imagine going three years without buying a new laptop or a new cellphone. That’s how golfers feel without a new driver,” he explains.
If that’s the case for stability, the case for change is that a lingering recession will force the industry to respond in new ways to golfers’ two major complaints about the game: the time it takes to play a round and the cost.
Golfers might still play in recessionary times, but not necessarily as many holes or at the same price point. In lean time they learn that twilight rounds, nine-hole rounds and discounted rounds at off-peak hours are enough to satisfy their golf Jones, and the savviest operators are learning how to keep their proportional piece of the pie by attracting more of that kind of business.
In the past half-dozen years or so, golf course operators have become increasingly sophisticated at managing their businesses. They’ve had to because overall demand has been flat and the supply of courses, swollen by the imprudent building boom of the 1990s, has been roughly 10% too high. Many of the weakest courses and operators already have been weeded out, leaving relatively more innovators to fight it out in a recession.
SunCor Golf, for instance, manages six golf facilities in Arizona and one in Utah and thus far this year has seen zero drop in either rounds played or revenue, according to the company’s executive vice-president, Tom Patrick. To keep prices low, it has reduced some non-essential services (such as those tip-hungry bag boys who trot out to help you with your bag) and scaled back maintenance standards in certain months so that its courses are not quite so artificially green. These changes, to my mind, are a plus no matter what effect they have on cost; they make golf less needlessly fancy and improve its environmental impact. And, thus far, SunCor’s customers seem to buy into the bargain, too.
Another possible consequence of an extended recession, as in the Great Depression, could be more participation by members of hitherto under-represented demographic groups. A promising initiative called Get Golf Ready, launched last month by Golf 20/20, a consortium of major golf organizations, hopes to engage adult beginners, especially women and minorities. It offers a standardized $99 bundle of small-group, on-course lessons and etiquette advice. For newcomers to the game, the industry’s willingness to do whatever it takes to attract and retain customers could make this a good time to make the plunge.
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