Covid-19 Update from Bobby Jones Links
Insights from Bobby Jones Links
2022 State of the Industry
Bobby Jones Links

Golf, and golf and country clubs, are not going away. The rumors of their demise are wrong. Golf has been played for over 500 years. Google its origins and you’ll find in predates the invention of the piano. It’s a big business. Do you know there are more than 14,000 golf courses in the United States, more than McDonalds or Starbucks? Or that golf raises almost $4 billion for charity each year, more than the NFL, NBA, MLB, and NHL, combined?

Golf is a $90 billion industry driving 1.89 million jobs and $58.7 billion in wages and benefits. The industry generated $191.9 billion in total annual activity when tourism and other golf related business is considered. We know the pandemic was good for golf and the growth in rounds, up 14% in 2020 and going over the historical highwater mark of 500 million U.S. golf rounds in 2021.

Approximately three million people began playing golf last year and 75% of those were adults. In more good news, the National Golf Foundation reported peak rates and fees increased an average of 11%. In 2020, As the Baby Boomers continue to reach retirement age, the size of the over age 65 golfers expands commensurately. It’s up 50% or 4.8 million golfers in just the past four years. And with 10,000 Boomers turning 65 every single day, it will keep growing for another six years.

More interesting and useful facts you should know are:

  • For years golf was the number one reason for joining a golf our country club. In the last few years, even before COVID, dining is now the number one reason people join a club. That is a seismic shift in preference.
  • Women today make approximately 85% of discretionary buying decisions, like joining a club. Relatedly, women over age 50 control 75% of the nation's wealth. This makes them the primary decision makers!
  • Successful clubs offer something for everyone, no matter what age or staging. Clubs are still, and always will be, about connecting with other people.
  • The average private club has a 6-8 percent turnover. Anything higher is a red flag that the value proposition of your club is not resonating with many members.
  • The successful clubs are innovating and making their club more relevant to the younger generations. They are eliminating rules, not adding more. Most importantly, they are focused not on one amenity, but on the overall lifestyle the club offers.
The Challenging Business of Clubs

Despite the many positive signs, operating a successful and thriving golf or country club remains a very challenging prospect. According to the National Golf Foundation, only 45% of the over 14,000 golf facilities in the U.S. are profitable. Put another way, 55% are not.

  • Renovations are hot. 56% of course architects expect a significant increase in revenues in coming years. Similarly, the construction companies are so busy many are booked through 2023.
  • Master plans and total renovations are now the number one activity for course architects, pushing the enhancement of practice facilities to the second spot.
  • Two-thirds of facilities raised wages in 2021. With a 7% CPI increase in 2021, expect this trend to continue in 2022

A Word About Private Clubs
  • 35% of clubs do not generate enough profit to cover depreciation. Clubs in this group are literally consuming themselves.
  • 35% of clubs generate enough profit to meet replacement costs but not enough to improve the club.
  • Only 30% generate enough profit to meet replacement costs and invest in improving the club.
  • In addition to financial challenges, club boards and owners report service levels are often fair to poor, high turnover is a continual problem, and their expenses continue to outpace the growth in dues, fees, and rates.
Great Board Governance Remains Uncommon

Too many boards work "in" the business of their club instead of "on" it." Strategy is hard, but operations is easier," yet this is why board members meddle in the day-to-day affairs, sending conflicting messages to the club's staff.
This mistake has gone beyond a trend and now is endemic in private club management. Effective boards focus on the high level issues and focus on the club's future, leaving personal agendas and politics out of the equation.

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