Golf Industry Report 2018 EDITION HOLE 10, THE BEAR S CLUB, JUPITER, FLORIDA

Transcription

1 Golf Industry Report 2018 EDITION HOLE 10, THE BEAR S CLUB, JUPITER, FLORIDA

2 Definitions PARTICIPATION GOLFERS (ON-COURSE GOLFERS): Individuals ages 6 and above who played at least one round of golf on a golf course during the survey year. OFF-COURSE ONLY PARTICIPANTS: Individuals ages 6 and above who didn t play on a golf course, but played at a driving range, Topgolf (or similar) facility or an indoor simulator during the survey year. LATENT DEMAND: A measure of individuals (6 and above) who didn t play golf during the survey year, but indicated they re now very interested in playing golf. BEGINNING GOLFERS (BEGINNERS): Individuals ages 6 and above who played golf for the first time during the survey year. COMMITTED GOLFERS: Individuals ages 6 and above who play at least one round of golf a year and indicate golf is one of several ways they like to spend their recreational time. ROUNDS PLAYED: Measure of authorized starts on a golf course. COURSE SUPPLY GOLF FACILITY: A business location where golf can be played on one or more golf courses. GOLF COURSE: A tract of land containing at least 9, but not more than 18 holes. 18-HOLE EQUIVALENT (18HEQ): A measure of golf supply calculated by taking the total number of golf holes and dividing by 18. For example, one 18-hole golf course equals one 18-hole equivalent. Two 9-hole golf courses equal one 18-hole equivalent. MUNICIPAL FACILITY: A golf facility owned by a tax-supported entity such as a city and is open to the public all the time. PROFESSIONAL MANAGEMENT COMPANY: A company that manages or operates at least two golf facilities. RENOVATION: A construction project at a golf facility where a minimum of nine holes is temporarily closed for at least three months to conduct the work. COURSES IN PLANNING: Specifications are being written and key product decisions are being made for the planned golf course. The project has been assigned to an architect or developer. COURSES UNDER CONSTRUCTION: The general contract and subcontracts for the course have been awarded. Work has started and ground has been broken. RETAIL OFF-COURSE GOLF SPECIALTY STORE: Brick-and-mortar stores, unaffiliated with golf facilities, that specialize in selling golf-related products. REGIONAL/NDEPENDENT RETAILER: Brick-and-mortar golf retailers, typically family-owned and operated, that are unaffiliated with national golf specialty stores. NATIONAL RETAILER: A retailer with multiple locations of same brand stores spanning several states and regions, such as PGA TOUR Superstore, Golf Galaxy, etc. PUBLIC FACILITY: A golf facility that is open to public play at least a portion of the time NATIONAL GOLF FOUNDATION FRONT COVER PHOTO BY JIM MANDEVILLE / THE NICKLAUS COMPANIES 2 NATIONAL GOLF FOUNDATION

3 2018 GOLF INDUSTRY REPORT Introduction Creating a smarter, more energized golf business it s the belief that drives the National Golf Foundation, and the impetus behind the NGF s new Golf Industry Report. Golf is far more than a game. It s an $84 billion industry that makes significant contributions to the U.S. economy by touching one of every 75 jobs, almost two million Americans in total. This Golf Industry Report compiles many of golf s key metrics in a single, comprehensive state-of-the-industry overview. It was created to help inform the business decisions of golf leaders in all categories and provide a holistic and balanced view of the game to the media and public. The consolidated nature of the report provides the opportunity to assess the industry through a variety of indicators rather than making broad assumptions about the game s health based solely on participation or changes in golf course supply. Although not quite at pre-great Recession levels, golf participation remains strong and interest in playing the game is at historic levels. The number of courses will continue to contract over the next several years as part of a needed correction of oversupply, yet acquisitions, renovations and select new course construction provides ample evidence of the confidence of capital markets in golf. And as course operators invest in their product, golfers will continue to have access to increasingly highquality courses at reasonable rates. Golf is a competitive industry that faces its share of challenges. This is particularly true in an era when the general public has so many choices when it comes to deciding how to spend their recreational time and discretionary income. The prescription for future growth lies in ground-up efforts to sell the game, including Among the highlights included in this year s Golf Industry Report: PARTICIPATION AND ENGAGEMENT On-course (green grass) and off-course (range, Topgolf and simulator) participation, rounds-played, latent demand and customer segments such as beginners, juniors, women and non-caucasian. COURSE SUPPLY Total supply, golf course openings and closings, renovations, and affordability and accessibility. RETAIL AND EQUIPMENT SALES Data on both the number of individual doors and the estimated square footage of all off-course dedicated golf retail stores, along with store openings and closures in OVERALL REACH The game s influence beyond those who play on- and off-course: identifying those who watch and read about golf as well as those non-golfers who are fans of the sport, and examining the impact of golf s top grow-the-game programs. making golf more welcoming and less intimidating for beginners, and by having more success converting trials into committed players. The information contained within this Golf Industry Report is enhanced and driven by a substantial increase in the NGF s investment in consumer research to benefit the industry. A significant portion has been funded by NGF members, who support the organization s mission to supply the industry with objective, reliable data on the state of the game ultimately helping foster smarter and more energized golf businesses GOLF INDUSTRY REPORT 1

4 2018 GOLF INDUSTRY REPORT Participation and Engagement As new forms of golf engagement continue to emerge and proliferate, the sport s most devoted participants remain committed to the traditional game. To more accurately reflect the evolution of golf s overall consumer base, the NGF s expanded definition of participation looks beyond traditional on-course golf and also factors in off-course participation, which tracks those who swing a golf club at facilities like Topgolf, indoor simulators and driving ranges. While the number of people involved in off-course forms of golf increased by 7% in 2017, the total pool of green-grass golfers remained stable. An estimated 23.8 million people played golf on a course in 2017, in line with the previous year. Golf s overall participation base combining on-course golfers with the 8.3 million people who only played off-course is now 32 million and continues to climb incrementally. Perhaps more importantly, the game s most committed golfers those who account for approximately 95% of all rounds-played and spending held steady at roughly 20 million. PARTICIPATION (IN MILLIONS) 23.8 PLAYED ON A GOLF COURSE 19.5 COMMITTED GOLFERS 32.1 OVERALL PARTICIPATION PARTICIPATED AT OFF-COURSE LOCATIONS PLAYED EXCLUSIVELY OFF-COURSE Opportunity for Growth Latent demand, as measured by the number of non-golfers who are now interested in playing golf on a golf course, hit a new high. The number of non-golfers who say they are very interested in playing golf increased to 14.9 million (up from 12.8 million in 2016). Much of this can be attributed to the growth of off-course participation (32% of offcourse participants are very interested in playing green grass golf) MILLION NON-GOLFERS WHO SAY THEY ARE VERY INTERESTED IN PLAYING GOLF 2 NATIONAL GOLF FOUNDATION

5 ON-COURSE GOLFER SEGMENTS (IN MILLIONS) JUNIORS YOUNG ADULTS WOMEN NON-CAUCASIAN AGE (ages 6 to 17) 11% of all golfers (ages 18 to 34) 26% of all golfers 24% of all golfers 18% of all golfers 15% of all golfers The Young Adult age group remains unchanged from 2016 contradicting claims that the sport continues to lose Millennial golfers. Golfers age 65 and older are up from 3.2 million last year, and this number will continue to increase as the balance of Baby Boomers cross this milestone. OFF-COURSE ONLY PARTICIPANTS Off-course only participants skew younger and more diverse than on-course golfers. JUNIORS 26% YOUNG ADULTS 43% WOMEN 41% NON-CAUCASIAN 38% AGE 65+ 3% Shown as a percentage of all off-course only participants (8.3 million total) The Face of Golf Continues to Change Golf welcomed 2.6 million newcomers (those who played on a golf course for the first time) in 2017, maintaining a four-year upward trend. These beginners are more diverse than the overall golf population. ROUNDS PLAYED (IN MILLIONS) BEGINNERS VS CURRENT GOLF POPULATION BEGINNERS CURRENT 35% 24% WOMEN % 18% NON-CAUCASIAN 70% 37% UNDER AGE 35 A total of 456 million rounds were played in 2017, a 2.7% year-over-year decline that is consistent within average weather-related fluctuation of 2% to 3%. Mother Nature continues to have a predominant influence on the number of rounds being played GOLF INDUSTRY REPORT 3

6 2018 GOLF INDUSTRY REPORT Course Supply and Development The golf course industry continued to undergo a slow and steady cycle of self-balancing in This right-sizing in the supply of United States golf facilities is the ongoing byproduct of an unsustainable period of growth ( ) in the world s best-supplied market. At the end of 2017, there were a total of 14,794 golf facilities in the U.S. The net reduction represents a 1.5% contraction of the U.S. golf facility supply from Demand for land to develop residential and commercial real estate continues to fuel the supply correction in golf. For golfers, the quality of supply continues to gradually improve as some courses close and many remaining ones undertake improvements, both major and minor. TOTAL GOLF FACILITIES 14,794 * Reported in 18-hole equivalents 15.5 NEW COURSES OPENED* COURSES CLOSED* 96 RE-OPENED AFTER RENOVATIONS* CHANGE IN GOLF COURSE SUPPLY +44% % Golf Course Renovations Renovation, not new construction, is the largest source of U.S. golf course development activity. Approximately 1,100 course renovations over the past decade represent a total investment of at least $3.25 billion. That doesn t factor in minor rehabilitation projects. The new courses that are being built demonstrate an increased focus on being playable and enjoyable. 1,100 Approximate number of course renovations since 2006 Since 2006, the cumulative reduction in the total number of U.S. golf courses is 6.9%. By comparison, there was a 44% increase in the number of courses over a two-decade course building boom from $3.25 BILLION Approximate amount invested in course renovations over the last decade 4 NATIONAL GOLF FOUNDATION

7 Accessibility and Affordability With 75% of facilities open to all players, it matches the highest public-to-private ratio in history. The municipal facility count hit 2,497 in 2017, an all-time high for the industry. The average price paid for an 18-hole round is $34*. The average price for a 9-hole round is $19. Professional Management There are 230 professional golf management companies (defined as operating at least two facilities) that work with a total of 2,148 facilities. This represents 15% of total supply, an all-time high. The number of golf management companies that operate 10 or more facilities has increased to 50 from 42 in Average price paid for an 18-hole round $34 2,148 Total facilities under professional management 75% Golf facilities that are open to the public *Public peak season, weekend greens fee with cart, adjusted for discounts (weekdays, twilight, walking, senior, etc.) Percentage of golf facilities operated by a professional management company 15% 45% of the global supply is in the U.S. Source: NGF Global Golf Course Database Total facilities worldwide 32,737 Courses in development worldwide % of the world s facility supply is in these 10 countries: United States United Kingdom Japan Canada Australia Germany France Sweden South Africa South Korea INTERNATIONAL GOLF SUPPLY Globally, there were 32,737 golf facilities in 208 of the world s 249 countries in The sport still has a geographic concentration, with 81% of the world s supply in the top 10 golfing countries. The U.S. is home to 45% of the global facility supply. Golf continues to grow worldwide. In 2017, there were 306 courses in planning and 199 under construction. 108 countries had active golf projects, up from 103 in GOLF INDUSTRY REPORT 5

8 2018 GOLF INDUSTRY REPORT Retail Supply and Equipment Sales At the end of 2017, there were 678 off-course golf specialty stores (down 5.6% from 2016), operating about 6.2 million square feet of retail space. The reduction in golf specialty retail stores dating back to the Great Recession is a trend that mirrors declines in other retail sectors and also reflects a societal shift toward increased online consumption. As a result, many brick-and-mortar golf specialty stores are moving toward experiential offerings e.g. lessons, club fittings, and leagues rather than just focusing on selling products. National golf specialty retailers, such as PGA TOUR Superstore, Golf Galaxy, etc., represent 43% of all stores and 69% of the total square footage. Regional/Independent stores make up 57% of the overall supply and 31% of the total square footage. In addition to golf s specialty retailers, there are more than 1,800 sporting goods stores across the U.S. that also sell golf equipment (DICK S Sporting Goods, Big 5 Sporting Goods, etc). OFF-COURSE GOLF SPECIALTY STORES 678 9,097 AVERAGE STORE SIZE IN SQ FT TOTAL STORES 21 STORES OPENED 61 STORES CLOSED 6.2 MILLION TOTAL SQUARE FEET RETAIL SUPPLY BY STORE TYPE NATIONAL RETAILERS 43% of doors 69% of square footage REGIONAL/INDEPENDENTS 57% of doors 31% of square footage 6 NATIONAL GOLF FOUNDATION

9 Online Buying Online purchases account for a growing percentage of total golf merchandise sales. More than one-third of golfers purchased golf-related merchandise online in Golf balls and apparel make up the majority of online purchases. 35% of golfers bought golf merchandise online Golf Club and Ball Sales Across all retail channels, the NGF estimates the size of the premium club and ball market in 2017 at $2.6 billion retail, up about 3% in dollars versus the previous year. Figures are based on shipment data supplied to NGF by the leading club and ball manufacturers and adjusted to total retail market value based on guidance provided by key off- and on-course retail market leaders. $2.6 BILLION Size of the golf club and ball market 2018 GOLF INDUSTRY REPORT 7

10 2018 GOLF INDUSTRY REPORT Overall Reach Golf has significant reach beyond those who play on- and off-course. In addition to 32 million total golf participants, there were another 66 million people who didn t play, but did watch golf on television and/or read about the game in Factoring in off-course forms of participation and media consumption, three-quarters of golf s overall scope is comprised of individuals who didn t play on an actual course within the last year. Golf s total reach of approximately 98 million people represents about one-third of the U.S. population (age 6+) and is up 3.2% from a total reach of 95 million in TOTAL GOLF REACH (IN MILLIONS) ON-COURSE GOLFERS OFF-COURSE ONLY PARTICIPANTS WATCHED OR READ ABOUT GOLF (BUT DIDN T PLAY ON- OR OFF-COURSE) ONE THIRD of the U.S. population (age 6+) is reached by golf 79 MILLION Americans watched golf on TV 27 MILLION Americans read about golf 8 NATIONAL GOLF FOUNDATION

11 Growing the Game from the Ground Up Research shows that reaching kids at an early age in schools, or through structured programs, positively influences their perceptions about golf and generates interest in the game. These methods of introduction are found to be equally as effective as starting kids out on the course. 10,000 elementary schools have The First Tee National School Program 10,000 high schools offer girls competitive golf, with 75,000 total participants* 13,000 high schools offer boys competitive golf, with 141,000 total participants* * National Federation of State High School Associations Athletics Participation Survey 70,000 girls were introduced to the game through LPGA * USGA Girls Golf in ,000 boys and girls on 3,400 PGA Junior League teams nationwide in 2017 Charitable Impact Golf is an important vehicle for charitable giving, with local, regional and national events accounting for more than $3.9 billion in annual fundraising. $3.9 BILLION $26,400 the average amount raised at more than 142,000 charitable events hosted by 84% of U.S. golf facilities $3.76 BILLION in charitable monies were raised through golf events, with another $180 million of in-kind and cash donations TOTAL ANNUAL FUNDRAISING $180 MILLION was donated by the PGA TOUR and its tournaments in 2017, an all-time high 2018 GOLF INDUSTRY REPORT 9

12 IF YOU WORK IN GOLF, THE NGF WORKS FOR YOU. Driven by its mission to foster the growth and vitality of the game and business of golf, the NGF holds a unique position as the most trusted and preeminent provider of golf market research, databases, business insights and marketing programs that support every segment of the industry. NGF EXECUTIVE MEMBERS 2018 BOARD OF DIRECTORS CHAIRMAN DAVID ABELES JOE LOUIS BARROW, JR. JOE BEDITZ CHIP BREWER III PRESIDENT & CEO FORMER CEO PRESIDENT & CEO PRESIDENT & CEO SECRETARY/TREASURER BILL BROWN BILL GOLDEN PETER HILL SARAH HIRSHLAND JOHN K. SOLHEIM GROUP VICE PRESIDENT PRESIDENT CHAIRMAN & CEO SENIOR MANAGING DIRECTOR OF BUSINESS AFFAIRS PRESIDENT THESE INDUSTRY LEADERS ENSURE THAT NGF S MEMBERS AND CLIENTS ARE GETTING THE BEST THINKING IN THE GAME. F O S T E R I N G T H E G R O W T H A N D V ITA L IT Y O F T H E G A M E A N D B U S I N E S S O F G O L F M E M B E R R E S O U R C E S R E S E A R C H C O N S U LT I N G D ATA B A S E S E R V I C E S N. H I G H WAY A 1 A, J U P IT E R, F L T O L L F R E E (8 8 8) A S K-4 N G F W W W.N G F.O R G Golf Industry Report is a summary report. More comprehensive information is available to NGF members. This publication and any part thereof may not be published or reproduced without written consent of the NGF. VICE-CHAIRMAN DICK SULLIVAN PRESIDENT & CEO