Closures!

This week presented two interesting points that could directly – as well as indirectly – impact the golf industry. The first point: the National Golf Foundation released its annual report on the number of golf closures in 2022 – which was down to 105 and “represented a 62% decrease from the peak of the supply correction in 2019.” – NGF

This continues the positive trend of supply / demand correction as those clubs that remain standing are experiencing greater financial success than many have experienced in decades. The article goes on to beg the inevitable question - “Are we there yet? Has supply and demand finally returned to a reasonably balanced state? Is the correction over? The answer, at least at a macro-level, is a qualified “yes.” – per the National Golf Foundation

While I have always been bullish on the golf industry – I partially disagree with their assertion.

In my opinion the Golf Industry is poised at a great crossroads – we have more people coming into the game than ever before, however are they solely coming to traditional green grass properties?

Studies have shown this to a be a resounding – No!

Top Golf, Pop Stroke and other creative “entertainment venues” are presenting alternatives to the next generation of golfers to spend their discretionary dollars. It is imperative that course operators re-examine their current offerings and the other entertainment offerings around them to differentiate themselves and create new revenue streams.

This leads to the other interesting point from this past week …

As relayed by our Colliers Capital Markets Group – “the precipitous failure of Silicon Valley Bank. While not necessarily a household name, SVB was the 16th largest bank in terms of assets and the 2nd biggest bank failure in history behind Washington Mutual 15 years ago.”

It is still too early to determine the impact of SVB as the FED’s initial reaction was to actually drop rates – clearly as a step to quell panic in the markets. So, the open ended question becomes – will fear of the banking system create fears of a recession in consumers, or continued inflationary pressures impact discretionary income life’s pleasures – i.e. golf?

This remains the question as the bulk of golf courses across the nation begin to gear up for what will be hopefully another season.

Would love to hear your thoughts on the State of the Industry? Let’s chat …

Allen

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