Two decades ago, golf was invigorated by the “Tiger effect,” with a transcendent player sparking record participation levels. Today, the industry is experiencing the “Topgolf effect.”
Whether the rapid growth and soaring popularity of Topgolf — and the entertainment-golf entrepreneurs the company’s success has spawned – leads to a marked rise in green-grass golf participation remains to be seen. But the influence Topgolf has had in welcoming players to its fun, social, non-intimidating version of golf is undeniable, with off-course participation (a figure that also includes regular driving ranges and indoor golf simulators) up a healthy 11.1% in 2016.
Over the past year, the number of golfers who played on a golf course for the first time rose to an all-time measured high, eclipsing the previous high-water mark set in 2000 when that phenom named Tiger Woods won three of his 14 major titles. Also in 2016, the number of non-golfers who said they are “very interested” in playing golf jumped 7.6% percent to 12.8 million. There are a number of contributing factors, to be sure, but it’s hard not to draw a parallel between Topgolf’s expansion — 31 U.S. locations with another 10 more in construction – and the rise in beginners and interest for golf played on a regular green-grass course.
The two forms of participation are unquestionably different. But beyond the food, drink, music and games that create an atmosphere somewhere between sports bar and nightclub, there’s no question that golf is at the root of Topgolf Entertainment Group’s DNA.
“Anyone who hits a golf ball to a target is in some way appreciating golf,” says Topgolf co-chairman and CEO Erik Anderson. “I’ve told people, golf is a 30-minute game with a four-hour walk if you unbundle what you’re doing. A part of golf that’s so fun, in addition to playing, is the social interaction you get with your friends. We’ve just put that together in a different form.”
These next-generation driving ranges are indeed a different form of golf participation that are helping broaden the traditional measures of engagement with the game, whether it’s Topgolf or similar facilities such as Flying Tee (which debuted its first facility in June 2016) or Drive Shack (which is opening its first location later this year). While NGF’s annual participation study in years past hasn’t included off-course participation, that’s changing to give a better representation of the golf industry as a whole. When considering both green-grass and off-course participation in the U.S., golf’s overall consumer base increased approximately 3% to 32 million in 2016.
Much as in other industries, there’s a behavioral shift that has to be accounted for. That’s evident in looking at the increase in online retail sales versus the decline seen with a reduction in traditional brick-and-mortar businesses.
Staying within the golf realm, South Korea provides a valuable example. If one were to measure golf engagement strictly based on playing an actual course, it would miss more than 50 percent of passionate golfers who frequent the popular GOLFZON simulators that are ubiquitous in major metropolitan areas.
The PGA TOUR and LPGA are among the organizations to recognize the way Topgolf is changing the face of participation in the golf industry. The leading professional tours have a strategic alliance with the company that’s designed to create fans and participants, and enhance playing and fan experiences.
Major golf equipment companies are also on board.
Callaway has a partnership with Topgolf and its clubs are used by guests at all its venues. Chip Brewer, the CEO of Callaway, is among those in favor of more wide-spread participation measures, regarding Topgolf as an incredible positive for the sport in that it creates an on-ramp for those who otherwise wouldn’t be interested or have an avenue into the game.
“We’re right to look at it more broadly and this broader view is encouraging,” Brewer said. “However, the traditional measure also tells a story that shouldn’t be ignored. It just doesn’t tell the whole story.”
TaylorMade has aligned with Drive Shack, which is backed by Fortress Investment Group LLC and is set to open its first location later this year in Lake Nona, Florida. Cobra has partnered with Flying Tee, which is already focused on expansion both in the U.S. and in Asia.
To that end, Flying Tee – a three-story, 60-bay facility which sits on the banks of the Arkansas River and is a five-minute drive from 2001 U.S. Open host Southern Hills – has a licensing deal with Jack Nicklaus’s company and New York financier Howard Milstein (the co-chairman of Nicklaus Co.) to take its concept and platform to China and beyond.
“For someone who truly enjoys golf, you’re always going to want to go play golf on an 18-hole course and go out with your buddies,” says Flying Tee co-founder John Volbrecht. “This fits a specific need or demand for those that want to do something different.
“We’re all going 100,000 different directions right now,” he adds. “Nobody has a lot of free time, especially if you have a family, kids or are going on to that next stage of your life, so there’s got to be something that fills that gap. Golf entertainment as we describe it, whether it’s Topgolf or us, et cetera, I think it’s filling a desperate need within the industry to grow the game.”
An NGF study on Alternative Golf Experiences in 2015 found that 52% of non-golfers who visited a Topgolf facility had an interest in playing golf on an actual course. By comparison, only about 15% of non-golfers in the general population said they’d like to try traditional golf. Additionally, approximately one-third of those involved in Alternative Golf Experiences (range facilities or simulators) said it increased their green-grass engagement, including the frequency that they play.
Del Ratcliffe, the president of Ratcliffe Golf Services in Charlotte, manages a handful of public golf courses in North Carolina and says green-grass facilities can learn from Topgolf’s success, from the execution of their business plan to the social interaction, relaxed atmosphere, non-penal nature of play and the way technology is embraced.
“We can focus on providing the experience at every level, not just one area,” says Ratcliffe, who’s made numerous Topgolf visits – with friends, family and fellow PGA professionals – to evaluate what can be replicated at golf courses themselves. “We need to provide top notch service; great food, a variety of drinks, and an environment where the guests can enjoy it. We also need to focus on the social aspect of golf, to try to get our existing customer base to engage others.”
Topgolf has the biggest head start in the golf entertainment market — having opened its first U.S. location in 2005 – and, since getting its footing established as a business, has fully embraced its role as a gateway to golf and bringing players of very disparate skill levels together. The company gave 60,000 lessons last year, with 90% of those participants new to golf. Topgolf recently announced an initiative in which all junior programs, from high school teams to youth groups, can play for free.
“We’re very bullish and optimistic about how we can broaden the interest in the game, but keep bringing its traditions and values forward as well,” says Topgolf’s Anderson, who hopes to add another 80 sites in the U.S. and globally over the next five years.
While the look and feel of complexes like Topgolf and Flying Tee are similar, their technology is somewhat different. At Topgolf, all the balls contain a personalized microchip to determine distance and accuracy as players hit them at targets. Flying Tee uses 3D sensors within its bays that track the distance, spin, speed and trajectory for each ball, data that can later be easily accessed from a player’s phone.
“You would usually be paying $150 to $200 for a lesson at a club to get the data and feedback you get on every single shot,” says Flying Tee’s Volbrecht.
Flying Tee also allows guests to play 32 simulated courses – from St Andrews to Pebble Beach – by tracking real golf shots hit in its outdoor range environment and displaying them on a screen in front of the player. Nearby Southern Hills isn’t one of the course options, at least not yet.
Topgolf expanded its reach with the 2016 acquisition of Protracer, which tracks the flight of a golf ball, displays its path in video and analyzes every shot hit. The technology, renamed “Toptracer,” provides a visual enhancement for televised golf events and Topgolf has also licensed it to driving ranges and tournament directors for a more interactive golf experience.
There’s no question that these non-traditional forms of golf are becoming increasingly popular.
Amid all the socializing, food and drink, there were 763 million golf balls hit at Topgolf locations in 2016. Over time, all those people with a golf club in their hands can only be a positive for the industry.
“With the millions and millions of people who come in, engage in golf, have that fun experience, learn to hit at a target and enjoy some fun with their friends, it can only have one outcome,” says Anderson, “that people will play more golf.”
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