What will the post-COVID Golf be like?

It seems, although not to be trusted, that there is light at the end of the tunnel. The drop in the rate of infections, at least in Spain, and, above all, the proximity of vaccination, are beginning to generate a halo of hope that the exit is closer.

The time is coming to start considering post-COVID, although unfortunately many, both people and companies, will no longer be there, but those who remain need to prepare their position for that D + 1 day that we hope will not take so long.

 And what about Golf? Well, although in many aspects it is still defending itself tooth and nail, it is also entering the rethinking phase. Without daring to paint with clarity how the situation in the sector will be from that long-awaited moment of the return to normality, if we can identify some features of that new Golf after the pandemic, let's get to it.

? Offer growth. Development of New Projects: This chapter remained almost "flat" in recent years, in Spain since the crisis of 2.008 very few new projects have been developed, unlike the period 1996-2007 where more than 200 were launched, and in the USA, it went from a growth of more than 500 per year, to a decrease of almost 200 each year. What is going to happen after we get out of COVID? We do not expect large growth in Spain, as in the USA, Great Britain, Nordic countries ..., but we do see significant potential in Latin America, especially in Brazil, the Caribbean …, And also in areas like North Africa, Eastern Europe and other emerging ones.

At this point in the new projects, there are two factors that will have a great impact, on the one hand, the policy that is established in terms of environmental impact, which depending on how it is interpreted can make Golf like a friend or arrive To demonize it, this interpretation will greatly determine whether or not the development of new initiatives can be facilitated. The other factor, which will have a significant impact on the creation of new projects with Golf, is how new residential developments are planned in certain areas, since it does seem that there will be a significant demand, especially in the market for retirees from "cold" countries, living in areas open to nature, and also the telework effect will demand that lifestyle, and there golf courses can play an important role. Therefore, if we identify that there will be new golf projects, although many of them with new formats, such as Top Golf, executive courses ...

“In the increase in supply, new courses will have a decisive influence on the vision of regulators on the environmental benefits of golf courses and the new concepts of residential developments to adapt to the new demands of society”

·        Demand growth. Number of Players: One of the few good things that this pandemic has had, has been that Golf has emerged as a “refuge” value for many people who already played, and, the most newsworthy thing, is that it has brought many others who did not they played to discover this sport. The “refuge” concept used comes from the fact that many of the Golf values that existed until now, but which had not emerged with all their intensity, have been noticeably perceived. Within these values, the Golf-Health concept has stood out above all, in addition, the benefits of Golf for socialization without crowds have also been identified by many, as well as Golf Fun, a key element for the future of the sector, and others many attributes that society did not perceive and that now seems to be understanding. For all this, and for the good work, in this sense, of many of the institutions in charge of the sports part and the promotion of sport, which have been developing strategies such as Young Golf, Golf in Schools ..., we are optimistic that Golf finally return to the path of growth. For this trend to consolidate, it is also important to lower the barrier of "taxes", which in this case are basically specified in the federative licenses, through incentive policies, such as shortages during the initial terms to new players, payment only of the quarters remaining to the end of the fiscal year from the moment of registration, implementation of daily license models…. Another important aspect to reinforce this growth path is that Golf stops being so endogamous and looks more outward, for this it is key to lobby for communication and look less at our navel.

As a summary of this point, of the growth in demand, which in the end is what will drive the entire Value Chain, I am clearly optimistic and I believe that we are going to see notable growth not only in Spain, but also globally.

“A robust growth in demand is expected, new players, after the perception during the pandemic that Golf is a "refuge" value that brings great benefits to health, socialization and active entertainment”

? Golf-Business Evolution: Although traditionally the business part of Golf was not taken into account, since until relatively recently most of the courses were not profit-oriented as many of them were owned by their users, today the economic condition of the sector is of vital importance, and not only that of the golf courses, since the entire chain of suppliers, builders, machinery, tournaments ... depends entirely on its economic viability. Focusing on the economic situation, and perspectives, of the golf courses that are those that mark the temperature of the Sector, we must show an important concern, since a considerable number of them are in a dangerous situation, and although it is not only because of the virus, it has been a terrible "goring" for more than we would like, on all those dependent on tourism.

It is curious that in a situation of increased demand, the health of the supply, the golf courses, it is not as good as it should be if the rational economic fundamentals for other sectors were met. The reason for this situation is not easy to explain, but some clues as to where the “shots” of the post-pandemic future can go so that the Courses, and therefore the entire Golf industry, could become more economically healthy, could be the following:

 - Readaptation of Business Models: The time when a Golf Course was totally Social, or eminently Commercial or “pay & play”, is beginning to be left behind. In this near future, most of the golf courses, without forgetting that there will always be field exceptions only for their members, will have to adopt more mixed models. The cases of the golf courses in which almost the only source of income came from visitor players, especially tourists, have been greatly affected by national and international mobility restrictions, in addition to having perceived that there is an important market of residents in almost all areas that must be responded to with very flexible forms of use, which is why they must undertake a decisive transformation of their operating model. The same happens with many of the cases in which the most important item in their income statement came from the membership fees, who must also seek ways of coexistence with the visitor market. This point of transformation is more cultural than of any other range and must be undertaken with great determination after analyzing the corresponding SWOTs.

 - Development of new services: Another point in which the evolution of the customs of the society must also condition the evolution of the exploitations of the courses, is the demand for new services by the users. On this occasion, Golf has a great advantage since, in general, the courses have physical capacities, especially in their clubhouses, which should allow them to serve them successfully. Activities such as co-working, language classes, car washing and many others, would be very implantable in many fields with the consequent economic and service value.

 - Greater Efficiency: Another of the pending subjects of the Sector. The axiom of "doing more with less" was not widely practiced in our industry and, of course, it is one of the things that has the greatest impact on income statements that, today more than ever, require a lot of oxygen to breathe. In this chapter on how we should be more efficient in the near future, there are two key aspects, one is the TRAINING of our employees to be more productive and more versatile. The other fundamental point for this future to come is the DIGITALIZATION of our operations. Online reservations and payments, CRMs, working in the "cloud", automated billing ... are many of the tasks that digitization should help to consume much less man-hours with the consequent liberation to dedicate efforts to the Client, which in the end is the one that pays us all.

 - Review of Commercial Channels: The golf courses, regardless of whether they are more oriented to Members or Visitors, do not stop having a permanent commercial need, both to attract customers and to retain them. Here, too, it seems that the future will force us to rethink our “comfort zones” and implement new strategies. Membership Marketing procedures adapting techniques from more mature sectors, Revenue Management, the greater weight of the direct customer acquisition, which is not intermediated, are some of the transformations that this FUTURE will ask of us.

“The business part of the Golf Industry requires a great transformation to guarantee its viability and respond to the new demands of the Company”

Obviously, there are many other things that the Golf Industry will have to do for the Sector to progress in the post-COVID stage, but I think that the above is a good reflection on how the movie can be after this "battle" that seems that begins to have signs that it can be finished.

We are convinced that Golf has a great opportunity to occupy that space that we have always believed it deserves due to its contribution of economic, social, sporting value and, let's not forget, the sanitary that from now on will be fundamental for the Society.

Thanks for your attention.

Francisco Aymerich

CEO

GOLF BUSINESS PARTNERS