Short Subjects
July 10, 2009
The business of golf in the United States continues to reflect the country’s general economic downturn over the last year or so.
Last year, for example, there were 106 closures of 18-hole equivalent golf courses. The actual number of golf courses that shut down is far larger, primarily because so many of the ones that closed were 9-hole layouts.
According to the National Golf Foundation (NGF), there have been 71 closures of 18-hole equivalent golf courses for calendar year 2009. At this rate, last year’s total number of shut downs will be easily surpassed.
The NGF says that the economy is the biggest reason for the closures, followed by conversions to other real estate uses. The foundation also notes that “Closures continue to be disproportionately public, stand-alone 9-hole, short courses (executive and par-3) and value price point” layouts.
Based on the Cape Region’s experience with the Golf Park at Rehoboth, conversions of golf courses to other real estate development can be viewed as a rational adjustment to changing economic conditions.
The Golf Park was a nice little executive course, but it wasn’t exactly a cheap round of golf. At the time it was converted to the residential development of Kinsale Glen, real estate developments were experiencing remarkable boom times in the Cape Region.
If the owners had waited until 2008 or this year to decide what to do with the Golf Park, it’s not easy to conclude that they would have converted the course into a collection of single-family homes.
In my discussions with golf course owners and others in the business, the problems in the credit markets and with debt service are noted as huge factors for public course operators. These problems appear to be the reason why some upstate public courses recently sought protection under Chapter 11 in the U.S. Bankruptcy Court in Wilmington.
Some of the newer courses took on a lot of debt to begin operations, only to find that unexpected upticks in interest rates didn’t go well with unexpected downticks in rounds played.
At least one Cape Region course avoided that problem, by relying on several local investors for the critical seed money, instead of banks. The course remains busy, especially in the summer season, and the stockholders are seeing a return on their investment.
Rounds up in May
The NGF also reported recently that the volume of rounds of golf played in the United States in May 2009 showed a slight improvement over May 2008. The NGF cooperates with Golf Datatech, the Professional Golfers’ Association (PGA), and the National Golf Course Operators Association (NGCOA) in developing these numbers. For May, the increase was 0.9%, a slight drop from the year-to-date increase of 1.6%.
The increased rounds were primarily played on public golf courses, with private clubs accounting for a slight decrease in May and a more modest improvement for the year. In the Mid-Atlantic region, the numbers were far larger, with a 5.3% increase in May and a 5.9% increase for the year.
It’s pretty obvious that the weather has a lot to do with whether golfers play more or less from one year to the next. The generally cool conditions of this spring, for example, would be expected to encourage more golfers to play. A real heat wave, on the other hand, will keep them off the course.
Try Corey Pavin’s strategy
The August edition of Golf Digest Magazine includes an article by PGA Tour veteran Corey Pavin, discussing his strategies for playing tough courses.
Pavin says he tries to “birdie the par 5s, attack the short par 4s, hold my own on the long par 4s and excel on the par 3s.”
Adjusting for the fact that Pavin won 15 times on the PGA Tour, including a memorable U.S. Open win at Shinnecock, his strategy should work for the amateur short hitters among us, if adjusted for the talent differential.
That would mean going for par on the par 5s and short par 4s, accepting bogeys on the long par 4s, and trying for par or birdie on the par 3s.
It’s just a matter of playing to one’s strengths.