Course Supply Leveling Out
This could be the year golf course supply in the U.S. levels out. For about the past 15 years, total supply in the world’s biggest golf market has been slowly contracting, reflecting a ‘correction’ in response to an overbuild of golf courses over the prior 15-year period.
While we’re down a total of 1,606 18-Hole Equivalents (18HEQs) over the past 15 years, we were up a total of 3,631 18HEQs over the 15 years prior — a net increase of 2,025 18HEQs versus 30 years ago. Take a look at the following chart historical percentage changes in supply.
Two things to notice. First, the size of the bars on the left side compared to the right. Way bigger, right? That’s why we have 2,000+ more courses than when all the new development began in earnest. Second, looking at the far right of the chart you can see the negative percent change getting smaller — likely signaling the end stage of the current market correction.
Every year, NGF verifies, by phone or email, the operational status of every golf course in the U.S. At mid-year, our database verification team had recorded only 60 18HEQ closures, a 46% drop from last year at this time. Projecting to year-end, we will probably end up somewhere around -100 net 18HEQ. That’s about 0.7% of total supply.
The number of golf course closures in the U.S. is never going to drop to zero. Doubtful it has in the last 100 years. Regardless of industry, many small businesses close their doors every year. Some because the market has changed. Others because they misjudged the market to begin with. And still others because an economic ‘higher and best’ use exists for the property. This last reason has become more common for older golf courses located in or close to growing population centers, where there’s high demand for land parcels that can be developed. Certainly, we don’t blame these golf course owners for cashing out when presented with an attractive exit strategy. In many cases, let’s instead wish them a long and happy retirement.
Learn From NGF Members
Whether you’re the head planner of your upcoming buddies golf trip or simply along for the ride, we’ve gathered a few easy ways to keep everyone in your group happy.Read More...
With the golf season getting into full swing, the days are growing longer for course maintenance teams. Your plans and budgets are in place to help guide your superintendent ...Read More...
For most golfers, the idea of an in-home golf simulator is nothing more than a fantasy. However, with advancements in technology, your own golf simulator is now more attainable than ever.Read More...