Golfers in Colorado: The Role of Golf in Recreational and Tourism Lifestyles and Expenditures

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1 Golfers in Colorado: The Role of Golf in Recreational and Tourism Lifestyles and Expenditures by Josh Wilson, Phil Watson, Dawn Thilmany and Steve Davies Graduate Research Assistants, Associate Professor and Professor Colorado State University August 2004 Introduction: Colorado s golf industry caters to golfers of all skill levels, from varying income distributions, representing all stages of life, and visiting from both local and distant locales. With such a broad customer base, Colorado golf has a large impact on the state s economy, contributing over $560 million in direct revenues to Colorado s economy in 2002 ( With this in mind, Colorado s golf industry commissioned a research project to provide more in-depth analysis on the environmental and economic role of the sport, resulting in two studies published earlier in This paper addresses some of the relevant issues associated with the golfing population that may influence the future growth of the industry and its impact on the state s economy. These issues include golfer demographics, the game s role in the recreational lifestyles of golf players and how golf s role may be changing, golfer s course choice and satisfaction as well as the golfer expenditures used to estimate the economic impact of golf on other state industries. Colorado State University, with the assistance of nineteen Colorado golf courses, was able to collect data from a number of golfers during Fall 2003, and subsequently, conduct the analysis presented here. Using surveys completed at each course, information was collected to be representative of the characteristics for golfers in Mountain, Front Range, and Denver Metro regions. A total of 675 surveys were used for the following analysis. Out of the 675 surveys, 155 were travelers, an important distinction since travelers expenditures represent new income to the state, an important economic driver in the economic analyses of the Colorado golf industry. Since the attraction of travelers is an important economic impact factor, and there is renewed interest in supporting tourism in Colorado, the characteristics of travelers and nontravelers will be further analyzed and delineated throughout this paper. Golfer Demographics: Colorado s golfer population is not representative of US or Colorado demographics. Males are nearly fives times the number of women golfers in all regions for this survey sample (table 1). This figure reinforces the common knowledge that

2 golf is a male dominated sport. Age is also another important characteristic when one tries to envision the future growth in Colorado golf activity. Golfers ranging in age from forty-one to fifty are the most prevalent in the sample except the Denver-Metro region where fifty-one to sixty year olds outnumber the 41 to 50 year old age group slightly (by.39%). Table 2 and figure 1 show more comparisons of age groups among the entire sample and different regions (it is interesting to note that the age of our golfer survey sample is fairly normally distributed). Another important golfer demographic is the income distribution across the sample population. It is not surprising that golfers skew toward a higher income level than the US average, but the Denver and Front Range results also suggest that there is a significant share of middle-income golf participants. Still, golfers in the mountain region skew towards incomes above $150,000 (figure 2), and this is likely due to the high number of travelers in that sample, and the fact that resorts in the mountain region target high-end travelers in their course development, promotions and fee structures. Over 9 of the travelers surveyed were playing in the Mountain region (table 3). As will be seen in the expenditures section, travelers tend to spend much more during a golf outing as well, which is a major driver in the economic impact of this industry to the state. Discussion of how other demographics (income, employment and type of household) influence the importance and frequency of golf outings among golfers will also be integrated into discussion for several of the subsequent sections. This allows one to see the influence of various golfer characteristics on their choices related to golf as a recreational activity, and may suggest how the industry will be affected by changing demographics and economic variables. The Role of Golf in Recreational Lifestyles: Golf s role within its participants broader recreational lives is of interest because it may suggest what industries compete for household recreation budgets, and also, trends in recreational use may signal future participation growth or attrition for golf. Golfers were asked questions involving their golfing habits as well as other recreational activity involvement. Golfers were asked the frequency at which they play annually (figure 3) as well as current golfing frequency compared to that of two and five years ago (figures 4 and 5). Sixty-five percent of the golfers surveyed in Colorado play greater than twenty rounds of golf a year, suggesting that for the most part, the sample surveyed incorporates golf into a major part of their recreational lifestyle. Understanding the employment status and household types of individuals playing golf in Colorado is also of interest, as it may indicate potential competition for golfers time. Therefore, regional analysis on the occupational status of golfers and type of household was conducted. Full-time employees make up the majority of players in all regions (table 4). Similarly, joint heads of household make up the majority of the golfing population and those with dependents outnumber those without (table 5). Figure 3b shows the number of rounds played, delineated by those of different household types and

3 employment status. Not surprisingly, those who are self-employed or retired are the most avid golfers (over 20 rounds a year) while full-time workers were most likely to play less than five times a year. Among household types, there was less diversity, but those with dependents at home were less likely to play frequently. Both of these findings suggest that time constraints do make a difference to the frequency of golf participation among Coloradans. But, the survey strategy also suggests there would be bias toward catching more frequent players, since they are more likely to be out on courses at any given time, so this potential bias should be taken into consideration when interpreting results. Figures 4 and 5 provide a visual comparison of the rates of play two and five years ago compared to now. Those surveyed are playing, on average, more golf now than in the past. However, there may be slower growth in play in recent years, as the growth in frequency was greater compared to five years ago (relative to two years ago). Although this statistic sounds promising for golf course managers, it may have little or no correlation to total rounds played due to the fact that the survey sample is made up of golfers currently playing and does not account for golfers who were not surveyed because they were not available at golf courses (since they left the sport or play less frequently). In short, the survey sample is biased with respect to capturing players who have already moved away from the sport. Another way to determine the level of importance golfers place on the sport is to look at the percentage of those belonging to a golf club or association. Forty-one percent of golfers surveyed belong to some form of golf club or association ranging from private courses to golfer associations. To assess the effectiveness of promotional prices to attract more price-sensitive golfers, the amount of golf played during discount or peak times was recorded in the survey. Fifty-three percent of golfers surveyed reported that they play some of their rounds during off-peak or discount times, while only 2% reported playing exclusively during those times (figure 6). It is not clear whether the choice of off-peak and discount play is based on speed of play, availability of tee times or price sensitivity, but figure 6b has some support for each argument. Figure 6b shows that the likelihood of playing off-peak or discount times decreases as income rises (likely due to less price sensitivity), but it also shows that some high income golfers play all or most of their rounds during off-peak times. This may suggest that some high-income, self employed or professionals with flexible schedules may choose to play at off-peak times, either due to availability of tee times, perceptions that play will be quicker during less busy times of the day and week, or the attractiveness of discounts to even high-income golfers. In order to assess golf s role in overall recreation, golfers surveyed were given a broad list of alternative activities and asked whether they had participation within the past year or five years. This data was then combined with the rate at which they played golf five years ago. This allows one to determine alternative activities for those individuals golfing a lot more and a lot less now than five years ago (figures 7 and 8). The popularity of fine dining has made a significant increase in the last year compared to five years ago for both sets of golfers. Biking and spectator sports were also alternative activities among at least 4 of the golfers in each sample (both one and five years previously), showing general popularity. In terms of unique findings among more

4 frequent and less frequent golfers, skiing and shopping tops the chart for those golfing a lot more than five years ago whereas no activity (besides spectator sports) seems to be drawing less frequent golfers away from this sport, suggesting a general decline in recreational activities in that population. Finally, golfer handicaps may provide some interesting insights on participants. Seventy-two percent of the traveling golfers have an established handicap versus sixtyeight percent of the non-traveling sample, signaling a more serious approach to the game. But non-travelers have a slightly lower handicap, averaging compared to for the travelers. This may suggest that many of the traveling golfers are those playing for the pure enjoyment of the sport but less serious about improving their score. More facts related to handicap and its relationship with economic impacts will be reported in the expenses section. Figure 9 sorts out the percentage of traveling and non-traveling golfers by handicap range. Again, it is interesting to note that the handicap data follows a fairly normal distribution, a common finding in several of the figures on golfers. Course Choice and Satisfaction: Understanding the relevant factors that golfers consider in terms of course choice and satisfaction may also provide interesting insights into how golf is viewed by its participants. We begin by observing the familiarity that the golfers have with the course they are playing. Participants were asked to note their familiarity with the course they were playing that day, and 39.3% were not very familiar while 40.2% were very familiar: a striking contrast. Among the more moderate responses, 9.2% were a little familiar with the course and 9.9% were somewhat familiar. It appears that the substantial number of golfers responding not very familiar is a consequence of traveling golfers playing the course for the first time. In contrast, most of the very familiar responses were from local golfers playing the same course repeatedly. Travelers were asked to compare, as a percentage of total, the number of rounds played in Colorado. Nearly 4 (the same set that were unfamiliar with the course they were playing that day) play few of their total rounds in Colorado (table 6). Table 7 directly addresses their loyalty to courses by asking what share of rounds are played at the course they were surveyed at, and there was surprising loyalty, with 2% and 35% noting all or most of the golfer s rounds were played at that course, respectively. Golfers were given a list of reasons as to why they may have chosen to play the particular course they were surveyed at (see table 8). Course location tops the chart with 51% or respondents choosing that as a primary reason they chose to play a course. Factors such as the condition of fairways and greens, green fees, and tee time availability also weigh heavily on a golfers decision when choosing a course. Figure 10 analyzes the importance of several of these factors more graphically, and illustrates that the condition of greens is weighted as most important, followed by condition of fairways, tee time availability, speed of play and price/fees. In short, quality of course is important, but other variables that relate to convenience (location, time considerations) and price also matter to golfers in this sample.

5 Once you consider the importance of factors, it is also important to assess a golfer s satisfaction with the same aspects at a course. Overall, golfers were very satisfied with courses in Colorado (figure 11). The relatively high satisfaction suggests few concerns for golf courses. Still, the least satisfaction was registered for availability of practice facilities, prices/fees, and speed of play, with the latter two also being important issues for golfers, as discussed above. As a service to participating courses, satisfaction was measured for the nineteen courses surveyed and will be distributed to course management so that they may assess how they rate among other Colorado courses and make changes appropriately. Expenditures by Golfers: The main driver of the golf industry and its effects on Colorado s economy are golfer expenditures. Golf generates both direct and indirect expenditures that impact the economy, unlike some sports that have mostly direct impacts. Although course fees and club purchases are the most obvious revenues to the industry, pro shop merchandise, cart rental, and food and beverages also bring revenue to golf courses. Forty-three percent of golfers surveyed have made an equipment purchase of over $100 in the last six months and 57% are planning on making another $100 purchase in the next year. Table nine compares the average spending of travelers and locals during a typical golf outing. Overall, travelers spend much more in a single golf outing than locals, suggesting that courses in regions highly influenced by travel (such as the mountain region analyzed earlier) have economies that will benefit most from a strong golf sector. Travelers bring revenue to surrounding industries enhancing the economic multiplier of the industry as well (table 10). The average traveling golfer in our sample spent an average of $ per day on activities outside of golf. The last question asked in this expenditures section is: does the quality (or commitment) of a player relate to the amount spent? To indirectly evaluate this question, expenditures on a golf outing were compared to handicap for the survey sample. Figure 12 shows that in all handicap ranges, travelers spend more than locals, an expected result. The spending habits of locals seem to be fairly even across handicap levels, although higher and lower handicaps actually spend less. Among travelers, there is a less smooth pattern, with higher expenditures at high and low handicap levels. We conclude that there is no clear connection between handicap and expenditures. Conclusions There appears to be greater diversity among the Colorado golfing population than one might expect, except for gender as males still dominate this sample. Perhaps the most interesting results relate to several results that suggest that convenience (speed of play and availability of tee times) rather than price may be the greatest concern for golfers. This argument would be further supported by the fact that those with implied time constraints (working full-time, dependents at home) were playing the least frequently among those in the sample.

6 This study provides some nice complementary analysis to the past economic and environmental analyses of Colorado s golf sector. First, it shows that golf is an important element of at least one region s tourism activities: a fact that enhances its economic impact on Colorado. But, beyond travelers, it also demonstrates that golfers from a wide range of incomes play golf fairly frequently, and spend money both at the course and other nearby businesses during those outings. Other activities also appear to be popular among golfers, but few of those activities are likely to have the wide-ranging impacts that golf has in the local economy. In terms of environmental aspects, the conditions of a course are among the most important factors to golfers, but even during a year of reduced water usage, the satisfaction with course conditions was quite high. This, together with the previous findings from this study, suggests that the industry can continue to aggressively manage water use with little to no impact on the perceived quality of the course. Finally, broad-based golf promotional marketing may be justified by the industry. The diversity of most demographics, including the handicap of players and their frequency of play, would suggest that several distinct segments exist among Colorado golfers. So, beyond the usual marketing materials aimed at those who closely follow the sport (through trade publications and sporting events), the industry might consider targeting more casual golfers who may be encouraged to golf more locally, as well as through short, in-state trips during off-peak tourism seasons. Given new initiatives by the Colorado Tourism Board, it is an opportune time to explore such marketing possibilities.

7 Table 1: Gender Comparison Male Female All Data Combined: Mountain Region: 82.57% 17.11% Front Range Region: 86.61% 13.39% Denver Metro Region: 84.56% 15.06% Table 2: Age Comparison Age All Regions Mountain Front Range Denver < % % 11 to % 1.32% 4.46% 14.29% 21 to % 11.84% 9.82% 7.72% 31 to % 19.74% 22.32% 17.37% 41 to % 27.96% 34.82% 22.78% 51 to % 26.64% 22.32% 23.17% 61 to % 8.55% 6.25% 9.27% 70 to % 1.97% % Table 3: Percent of Total Travelers by Region Mountain Front Range Denver 90.32% 2.58% 7.1 Table 4: Occupational Status of Golfers by Region All Mountain Front Range Denver Full-Time % 68.75% 59.85% Part-Time 4.89% 2.63% 5.36% 7.34% Retired 10.22% 10.53% 8.93% 10.42% Self-Employed 10.07% 8.22% 13.39% 10.81% Student 1.19% 1.97% % Table 5: Type of Household in Which the Golfers Reside All Mountain Front Range Denver Single, No Dependents 24.44% % 28.19% Single, With Dependents 6.96% 5.92% 10.71% 6.56% Joint-Head, No Dependents 28.15% 32.89% 22.32% 25.1 Joint-Head, With Dependents 36.15% 37.83% 43.75% 30.89%

8 Table 6: Rounds Played in CO-Travelers Only All of them 7.74% Most of them 29.03% Some of them 12.26% Few of them 39.35% Table 7: Rounds Played at the Same Course-Total Sample All of them 2.07% Most of them 34.96% Some of them 42.37% Few of them 9.04% Table 8: Factors Influencing Course Selection: Good reputation 23.41% Location 51.11% Recommendation 13.78% Layout 22.52% Aesthetics 13.63% Difficulty 9.33% Trying new course 9.19% Reasonable fees 22.96% Other 24.74% Table 9: Average Golfer Expenditures This Outing Traveler Local Green Fees $56.89 $35.97 Cart Fees $11.01 $6.97 Food & Beverage $18.86 $11.80 Pro-Shop Purchases $9.72 $3.42 Instruction $0.65 $1.48 Other $0.77 $1.22 Total $97.90 $60.86 Table 10: Daily Travel Costs Traveler Local Hotel $87.35 N/A Rental Car $33.74 N/A Food $92.58 N/A Shopping $45.45 N/A Entertainment $55.68 N/A Travel (Including Gas) $69.30 N/A Other $2.42 N/A Total $ N/A

9 Figure 1-Age Distribution of Golfers 4 35% 3 Total Golfers Mountain Golfers Front Range Golfers Denver Area Golfers 25% 2 15% 1 5% < to to to to to to to 80 Figure 2-Range of Household Income 4 35% 3 Total Golfers Mountain Golfers Front Range Golfers Denver Area Golfers 25% 2 15% 1 5% < $30,000 $30,000 to $50,000 $50,000 to $75,000 $75,000 to $100,000 $100,000 to $150,000 $125,000 to $150,000 > $150,000

10 Figure 3-Rounds Played in a Year <5 7% 5 to 20 28% >20 65% Figure 3b-Rounds per Year by Occupational Status and Household Type 9 8 < 5 Rounds per Year 5 to 20 Rounds per Year > 20 Rounds per Year 7 Percentage of Golfers Full-Time Part-Time Retired Self- Employed Single, No Dependents Single, With Dependents Joint, No Dependents Joint, With Dependents

11 Figure 4-Frequency of Golf Play Currently Compared to 5 Years Ago A lot less: 5% A little less: 1 N/A: A lot more: 17% same: 41% A little more: 27% Figure 5-Frequency of Golf Play Currently Compared to 5 Years Ago A lot less: 8% A little less: 9% same: 28% N/A: 1% A little more: 2 A lot more: 34% Figure 6-Rounds played during off-peak or discount times A few of them: 32% All of them: 2% Most of them: 13% Some of them: 53%

12 8 7 6 Figure 6b-Rounds Played During Off-Peak Hours by Golfers with Varying Annual Income All of Them Most of Them Some of Them Few of Them Percentage of Golfers < $30,000 $30,000 to $50,000 $50,000 to $75,000 $75,000 to $100,000 $100,000 to $125,000 $125,000 to $150,000 > $150,000 Annual Income Range 6 5 Figure 7-Recreational Activities Respondents Golfing Much More than 5 Years Ago % participated within the last year % participated 5 years ago Boating Kayaking/Rafting Bicycling/Hiking Tennis Skiing Other Participant Sports Spectator Sports Camping Fine Dining Theater Shopping Going to Spas

13 6 5 % participating within the last year % participating 5 years ago Figure 8-Recreational Activities Respondents Golfing Much Less than 5 Years Ago Boating Kayaking/Rafting Bicycling/Hiking Tennis Skiing Other Participant Sports Spectator Sports Camping Fine Dining Theater Shopping Going to Spas 3 25% Figure 9-Golfers by Handicap Share by Range for Travelers vs. Local Golfers Travelers Non-Travelers 2 15% 1 5% 0 to to to to to to 30 >30 Handicap

14 Figure 10-Choice of Golf Course-Importance of Factors Not Important Very Important Condition of Fairway: Condition of Greens: Personal Services/Amenities: Course Cleanliness: Course Design: Price/Fees: Practice Facility: Speed of Play: Tee Time Availability:

15 Figure 11-Course Satisfaction: All Courses 6 1-Not at all Satisfied Very Satisfied $160 1 Condition of Fairway: Condition of Greens: Personal Services/Amenities: Course Cleanliness: Course Design: Price/Fees: Practice Facility: Speed of Play: Figure 12-Golfer Spending Travelers vs. Locals by Handicap Tee Time Availability: $140 $143 Traveler Average Spent Non-Travler Average Spent $130 $120 $117 $100 $94 $98 $83 $80 $73 $75 $65 $64 $60 $56 $50 $49 $46 $40 $20 $ >30 Handicap