I see golf positioned for a rebound, but I can understand why many still wince every time we discuss rounds played or the future of this great game. When I last worked in this industry beginning in 2006, the economy had started to cool and golf rounds were flat with one notable category in decline: high-end public courses. It was a harbinger of things to come. Total rounds declined during the next several years as the Great Recession, housing’s implosion and the sub-prime mortgage crisis whittled away wealth, consumer confidence and disposable income. When I left the industry in 2008, the only question was how far and fast the decline would be amid the longest-lasting and worst economic conditions since the country’s postwar, government-spending hangover in 1945.
Now 10 years into this sea change hallmarked by yearover- year declines in rounds played, shuttered golf courses and fewer construction starts, the bleeding appears to be under control. Though rounds played and inventory continued to decline through 2015, there have been positive indicators of late. The NGF has yet to publish its rounds report for 2016, but the momentum from the past couple years has many optimistic that we will experience positive annual growth.
Here is why golf is turning around:
1. Housing is coming back. The U.S. Department of Housing, National Association of Homebuilders, National Association of Realtors, Federal Reserve and private tracking firms including the Case-Shiller National Home Price Index all point to housing as the brightest spot in a sluggish economic recovery. New home starts are expected to rise 5 percent in 2016, and existing homes in many markets have bounced back to pre-crash prices. For me, this is one of the strongest macroeconomic indicators of golf’s future health. The 10- year slump mirrors golf’s decline, and there should be a correlation in the rebound, too.
2. Irrational exuberance. This term coined by former Federal Reserve Chairman Alan Greenspan in the 1990s was intended to warn investors about the eventual correction of red-hot technology stocks. We are in a similar economic climate again in 2017 as major U.S. indices continue to hit all-time highs. A correction is inevitable, but golf continued to perform well even after the dot-com bubble burst in 2000, and the good time before the downturn will be good for both public and private businesses.
3. A corollary to investor sentiment, consumer confidence has surged strongly this year. In November, consumer expectations, a key contributor to the Consumer Confidence Index, hit a 13-year high while jobs continue to be created. Positive consumer sentiment has always been a boon for golf, evidenced by the construction booms of the 1980s and 1990s that occurred when the economy was surging.
Superintendents are optimistic, too. The results of our annual State of the Profession survey will be unveiled in a special report next month, but here is a sneak peek: 73 percent of superintendents reported that the business of golf improved in 2016 or shows signs of improving; 79 percent said more rounds were played in 2016 compared to 2015; and 88 percent reported maintenance budgets the same or higher than the previous year.
Some familiar challenges persist. Stagnant to declining budgets, rising labor costs, heightened expectations from golfers, and conflict with the board or management team continue to be pain points for superintendents in public and private settings alike.
Superintendents should be proud of the way they managed through these challenges during the past 10 years. The industry owes superintendents some recognition and gratitude for doing more with less. Golf’s demise could have been worse without the ingenuity of superintendents. Now there is opportunity on the horizon to benefit from that resourcefulness. Downturns force businesses to streamline and innovate so they can be stronger when the good times follow. Those good times are just a season away, and Superintendent magazine is looking forward to being part of golf’s next renaissance.