July 2020 Industry Report

I returned from my first business trip (requiring airline flights) since the start of the pandemic. It was the longest stretch of non-business travel for me since I graduated college in 1991.

The trip took me to four different states. Here are my thoughts:

(1) We can’t be myopic in our thinking. Different parts of the country have differing viewpoints on the virus. If you are bias towards a stricter lockdown or quicker reopening, please remember some of your customers may have an opposite opinion. Don’t let your emotions completely dictate marketing and operations.

(2) Private clubs are seeing a miniboom in rounds played. Not surprising considering the golf course is considered a safe retreat from world events. Many private clubs – even with CDC restrictions – are reporting rounds up 20% (good weather has played a part in this as well).

(3) Resorts with a strong drive market are reporting robust summer vacation business. For example, I visited a resort on Hilton Head Island, South Carolina. Their summertime bookings are up 150% year-over-year for the summer. Why? Folks on the East Coast who otherwise may fly to the Caribbean or Europe are deciding to switch gears and drive to a destination. This is good news for many of America’s best resorts, but questions remain on usage once kids go back to school. Conventions, usually the lifeblood of resorts in the fall, are still few and far between. With the opening of Las Vegas, the city will be the “canary in the coal mine” for group gatherings.

(4) Golfers on average tend to be a bit more optimistic than the average American. This is in part because of a general skew in affluence – the household income for core golfers is more than 50% higher than the average U.S. household (according to the National Golf Foundation). Age and career stage are also factors, as approximately one quarter of core golfers are retired, a rate 33% higher than non-golfers. This has an advantage and disadvantage. With the stock market remaining remarkably resilient, wealth preservation has been maintained. The bad news? Core golfers skew older, likely resulting in a more cautious attitude toward traveling and attending group gatherings.

Marketing thoughts to ponder:

(1) Don’t Assume Your Audience is Consuming Content the Same Way They Always Have:

– With most live sports cancelled and extensive work from home policies, analyze how best to reach your target markets.

(2) Remain Authentic:

– Stay true to your brand while recognizing that people have legitimate concerns. Offer solutions in a way that show compassion and care.

(3) Offer Something New:

– Consider marketing outdoor events; for example, outdoor cooking classes that allow members/guests to take the meal home.

(4) Don’t Focus Too Much on the Short Term:

– Social media usage is peaking right now as people seek news updates and want to stay connected to loved ones. Use tasteful messaging that doesn’t try to capitalize on increased social media engagement.

(5) Be Cognizant of Where Your Customers Are – Both Physically and Mentally:

– How badly are your key feeder markets impacted by the virus and economy fallout? For example, if Texas is one of your targets, businesses have been negatively impacted by the fall in oil prices, likely limiting their interest to spend money now.

Health of the industry:

Rounds played started off on a high note this year. Our industry – with a tailwind of a strong economy, low unemployment, and favorable weather – entered March with rounds up 15% versus 2019.

Several reports estimate as many as 20 million rounds – worth $1 billion in revenue – have been lost since the pandemic entered the picture.

May through December accounts for about 75% of annual rounds played.

An interesting fact courtesy of the National Golf Foundation: “The months of January – April account for a third of the calendar but only a quarter of annual rounds. If rounds played for the balance of the year remain flat [versus last year], we will only end down 4% versus 2019.”

While weather, macro news, and consumer confidence are out of our control, we have a shot that 2020 isn’t going to be a “lost year.”

A look at The Great Recession versus today with the help of statistics from the National Golf Foundation:

– The Great Recession devastated household wealth with home values dropping 33%.

– Today, home prices across most of the U.S. are still at record values. Activity has dropped during the pandemic, but because of record low interest rates, pricing has remained firm.

– The Great Recession caused the stock market to drop 54 percent.

– Last month, the NASDAQ hit a historic high.

– The Great Recession started just as golf had opened hundreds of new, expensive to maintain courses.

– Today, more than 1,000 golf courses – both public and private – have been culled from options, keeping the golf market much closer to equilibrium.

In summary, economic reports in the coming weeks are likely to be “all over the map.” Statistics on the pandemic are also likely to report wins and losses. We know 2020 will be a challenging business year, but, should the virus dissipate (unlikely) or a vaccine is announced (more likely), our industry just may have a robust 2021.

Powered by Latest Technology News | Mobile & Tech Reviews | Live Updates on ...