Water management, better pricing tools and new ways to package the golf experience are top of mind for golf course owners and superintendents as they struggle to remain profitable, the industry’s top trade groups said earlier this month at the Golf Industry Show at the San Diego Convention Center.
Amid floor displays for new irrigation systems and divot repair devices, the trade group CEOs discussed how to grow interest in the game and keep costs down in the face of a stagnant player base.
About 25 million people in the U.S. played golf in 2014, relatively flat over the past few years but down from a peak of about 30 million in 2005, according to the National Golf Foundation. Data firm Sageworks also reported that average net profits at privately owned courses and clubs were negative for several years, with a loss of 2 cents for every dollar of revenue in 2014.
Image Problem
Part of the problem is golf’s perceived stuffiness, which can make it hard to attract new players, especially women and millennials. PGA of America CEO Peter Bevacqua said many people need to stay connected to their family and work at all times was at odds with informal bans on cellphones at golf courses.
“Golf and church are the last holdouts for personal technology,” Bevacqua said. “But church is 45 minutes and golf is four hours.”
The pace of play was another concern, with some players unwilling to devote an entire half-day to one game of golf. Bevacqua noted that basketball players would walk away from a casual one-on-one, half-court game believing they had “played basketball,” but some golfers don’t feel they’ve “played golf” unless they’ve gone a full 18 holes.
Todd Hale, general manager at the San Diego Country Club, said in an interview that the biggest issue he faces is the length of time it takes to play golf. It will require a large shift in golf culture to make players comfortable with a shorter experience, he said.
“How can I be satisfied to play nine holes in two hours and how can we make practice part of that fulfillment?” Hale said.
San Diego Country Club is designed so that after a player finishes four holes they are near the driving range and after nine holes they are back at the clubhouse, Hale said.
The club is one of 59 golf courses or country clubs in the San Diego metro area, employing just under 3,000 with annual wages of $73 million, according to U.S. Census Bureau data from 2013, the most recent year available. Twelve courses or clubs closed since 2010, when the local industry supported 3,575 jobs with wages of $87 million.
Dynamic Pricing?
Jay Karen, CEO of the National Golf Course Owners Association of America, pointed to lackluster control over pricing as a potential stumbling block. Most courses have a relatively simplistic system, perhaps with a variety of rates based on weekend or weekday, twilight or early morning, and local player or visitor. Karen called the type of real-time demand-based surge pricing used by rideshare companies a “money grab” to be avoided, but said more dynamic pricing based on activity would modernize golf.
“Every other industry seems to be involved in dynamic pricing,” Karen said. “We’re leaving a lot of money on the table that’s preventing us from being sustainable.”
He also criticized the use of online tee time sites, which provide online distribution for some slots on a course’s schedule in exchange for control over its pricing. Many of the sites slash prices to drive revenue, which creates a concerning downward pressure for the industry, Karen said.
‘Brown Is New Green’
The industry groups admitted that water usage was still primarily a regional issue, though courses nationwide were cutting consumption and relying more on recycled water.
The U.S. Golf Association has been trying to highlight courses with more brown patches and seemingly less manicured looks. Karen said he enjoyed watching last summer’s U.S. Open at Chambers Bay Golf Course, despite criticism of the course from the “peanut gallery” of players and fans. Showing more natural courses is the only way to normalize fans to a less green experience, he said.
“I want to see some of these tour players under more severe conditions,” Karen said. “Players or a private club member might expect wall-to-wall green, because that’s what it’s been like for 40 years. It’s OK for the fairway to go brown, from an environmental standpoint and a cost-containment standpoint.”
At San Diego Country Club, Hale said “brown is the new green,” with brown areas throughout the course. The club relies on nonpotable wells on the property to supply some of its water and uses Bermuda grasses, which goes dormant in the winter and doesn’t require water.
The area’s municipal courses are also working on reducing their water footprint.
Mark Marney, deputy director of golf courses at San Diego’s Park and Recreation Department overseeing Torrey Pines Golf Course, Mission Bay Golf Course and Balboa Park Golf Course, said that while tees and greens are kept in fairly good shape, the rough and outer perimeters are perfectly fine drier and browner.
The north course at Torrey Pines has just started a $12.6 million renovation project, due to be completed by the fall, which includes a replacement of the course’s outdated irrigation system and the removal of five acres of turf.
But despite efforts by individual courses and national bodies, water conservation is still not a major issue for players, according to Club Managers Association of America CEO Jeff Morgan. He was asked whether young golfers care about the sustainability of golf courses.
“Not as much today as they will 10 years from today,” he said.
