March 2022 Industry Report

Occasionally, I am going to report back to you on my unorthodox 2022 barometer of our lives normalizing after COVID.

This normalization is likely to reduce the number of rounds played as the rest of the worldwide economy reopens.

I call it the nail salon tracker.

My wife treats herself to a manicure about once per month at a local nondescript nail salon.

Here is the report:

– During the height of the pandemic, she didn’t go for 15 months.

– Upon her first visit back about four months ago, she was the only one in the salon.

– Last week, she had to wait 40 minutes for an appointment. Why so long? Short on staffing.

What does this reveal? Life is adjusting back to normal quicker than economists predicted. This recovery is likely to have profound implications (both positive and negative) in golf this year.

Golf Course Closures

Even with a robust golf industry and economy, golf courses are always going to close. According to the National Golf Foundation, it’s notable that the number of golf course closures last year is down 53% from its peak only two years ago (prior to the pandemic). 

Also according to the National Golf Foundation, the total number of private golf clubs in America increased last year for the first time since 2007. In recent years, private supply had experienced a slight downturn, mostly because of financially-strapped midlevel clubs closing or converting to public facilities. The net rise of 12 courses isn’t dramatic, but it’s another indicator of the movement toward a better balance of supply and demand.

Tipping the Scale

With the hope the second half of 2022 will “normalize” the economy, now it the time to create programming that provides value, while at the same time steering guests/members to spend more time and money onsite.

Taking a lesson from the game plan of many cruise lines, several top golf clubs are evaluating the concept of gratuity free facilities.

One of the most established and respected clubs in the Southeast initiated a program that automatically adds a $91.50 charge on member monthly invoices. The fee covers all tips club wide – including all food and beverage gratuities. Doing the math, if a member spends more than $620/month in food/beverage, they are in the black and start generating savings.

Is this a trend that will become an industry standard? The jury is still out.

The program is a strong incentive to encourage golfers to spend more in the food/beverage operations – a notoriously difficult department to breakeven in profit/sales.

The negative is will staff continue to provide crisp service knowing tips are “already in the bank.”