Hole # 06
DECEMBER 2017 INDUSTRY REPORT

More Americans Feel Like a Million Dollars

According to banking giant Credit Suisse, the number of millionaires in the U. S. is now more than 15 million – up 1.1 million from last year. A “millionaire” is defined as the value of one’s financial assets plus housing and other non-financial assets, minus debt. The U.S represents 41% of all millionaires around the world. With the recent impressive stock market gains, these numbers probably prove conservative.

 

An Inflection Point

Executive Golfer will celebrate its 46th year in business next month. During that time frame, we have experienced seven significant economic cycles.

 

Almost like clockwork, 18 months into a strong economic recovery and stock market, our business improves. Why? As golf communities sell more memberships/real estate and resorts record higher occupancy with higher rev-par (revenue per available room) their marketing budgets stabilize and slowly increase.

 

I have a theory on why it takes 18 months for the industry to benefit.

 

At first, when the stock market and economic figures improve, consumers are skeptical that the good news will last. At the one year mark, skepticism turns to hope. At the 18th month mark, with positive momentum continuing, a shift in behavior occurs. Consumers say to themselves, “Look how smart I have been. I deserve a reward.” That reward comes in many ways – a new car, boat…and yes for some, a vacation, new set of golf clubs, or private club membership.

 

It Feels Different This Time

My dad taught me early in my business career to never discuss politics, sex, or religion with clients.

 

In the hope of not offending you, and remaining nonpartisan, I thought you might find this observation worthy of debate.

 

Where are we now in the cycle? We are right at the 18 month mark. Without a doubt, the stronger economy, surging stock market, low unemployment rate, and highest consumer confidence in a generation should create a “rising tide lifts all boats” scenario.

 

Unfortunately, I see a blip on the radar that may, or may not impact your business.

 

As I have traveled around the country (including Mexico and the Caribbean), I have noticed a growing trend that Republican sections of the country are producing outsized results, while Democratic sections of America, the level of consumer confidence is more muted. Perhaps it’s a result of our divisive political environment.

 

Here’s a purely subjective case study that you can poke all sorts of holes into…

 

I-75 versus I-95

Private clubs along the I-95 corridor from Miami to Jupiter should uniformly be producing very strong results. Most clubs have reinvested in capital projects and demographics continue to favor movement south. However, this is not the case. There is a significant number of winners, but surprisingly, also a significant number of losers in Southeast Florida. My best guess, since I-95 feeds buyers down from the Northeast, confidence to purchase is soft (91% of Manhattan, NYC residents voted Democratic).

 

While on the other coast, the I-75 corridor from Naples to Sarasota is reporting strong growth (a predominately Republican demographic feeding from I-75 down from the Midwest). You would surmise with the hurricane damage, the pause button would be stuck while locals deal with repairs.

 

I have seen the same scenario in Scottsdale (more Republican/Midwest) and Palm Desert (more Democratic/Los Angeles).

 

Obviously, there are many other factors in play. It may be worth a discussion at your next management meeting to dissect where your customers come from and how to be sensitive to their spin in what is a turbulent political environment.

 

Holiday Parting Joke

A guy was on a holiday in Mexico and figuring he might as well live it up a little he rented a 7-series BMW to go to the nearest golf course for a round of golf.

 

On the way there he noticed that the car was low on gas and stopped at a small out-of-the-way gas station to fill up.

 

The attendant was obviously impressed by the car and while the golfer was on the way to the men's room the attendant noticed that he had dropped some small 'things' while he was getting out of the car. Not knowing what they were, and hoping for a big tip when the golfer returned to the car, the attendant asked, "Excuse me sir, but are these yours?"

 

"Yes, thanks! Those are my tees."

 

"What are they for?"

 

"They are to put my balls on when I'm driving."

 

"Wow, German engineers think of everything, don't they?!"