In this edition of our “Ask the Experts” series, we’ll examine the state of the golf industry as well as what recession-era trends reveal about the sport and consumer spending. We’ll also check-in with some industry experts about how amateur duffers like you and me can save not only strokes, but also money around the greens.
While golf is undoubtedly a leisure-time activity for the vast majority of people who play it, that’s not to say it’s all fun and games. Golf is actually big business, both on and off the course, with the industry now generating more than $70 billion in annual revenue thanks to increased global popularity.
Interestingly, golf industry economics can also give us valuable insights into the economy at large as well as consumer attitudes, trends in the business community, and useful savings opportunities – each of which we will discuss in further detail below.
As you might imagine given the game’s white collar, country club reputation, golf-related spending is highly correlated to the health of the economy, and the sport’s core support comes from affluent consumers.
The U.S. golf industry experienced negative growth from 2008 through early 2010, according to American Express Business Insights, headlined by an 18% decline in spending between Q2 2008 and Q2 2009. Affluent consumers – people in the top 10% of all spenders – cut their golfing budgets by 13% during that two-year period, while non-affluent consumers cut back even more – spending 18% less. As of 2011, 41% of golfers were classified as being affluent.
Businesses, both large and small, also bunkered down during the recession. Small business golf spending fell 25% between 2007 and 2011, while large companies cut back 35%. In Q2 2009 alone, small businesses spent 18% less on golf than the quarter before and big companies cut expenses in this category by 30%.
Outlook for the Future
These trends are slowly beginning to reverse themselves in accordance with the overall economic recovery. Projections from the National Golf Foundation indicate that roughly three million more people will play golf in 2020 than in 2010, and the number of rounds played will rise 15% during that 10-year period – an increase of approximately 73 million rounds.
That doesn’t mean everyone who is stepping onto the course can afford it, though. It just means that consumer optimism about the economy is growing. After all, economic uncertainty spurred us to actually pay down over $1 billion in credit card debt during 2009, yet we’ve followed that up by adding $7.5 billion to our tab in 2010, $46.7 billion in 2011, and a projected $43.5 billion in 2012 (final numbers are not yet in), according to Card Hub’s debt studies. In other words, we’ve seen folks basically revert back to pre-recession spending habits as faith in the conditions have improved, but we’re in an even worse position to afford them without the buoy previously provided by the housing bubble.
In light of that, our ultimate goals should be to pay off what we owe and consistently live within our means. Doing so obviously necessitates cutting back across the board, but especially in major spending categories. We’ve already examined how you can save on pet care, so let’s see what the experts have to say about cutting back around the greens.
You can click on each of the following experts’ names to see what types of spending tips they have to share or simply skip right to our Takeaways section for a brief synopsis of our findings.
Meet our experts
There are a number of ways in which golfers can save money on expenses ranging from greens fees to instruction:
- Play municipal courses: Local public courses tend to be the least expensive.
- Tee off later in the day: Twilight rates are significantly marked down from what you’d pay earlier in the day given that you’re racing against impending darkness.
- Use websites that offer discount greens fees: Courses use sites like GolfNow.com to unload unclaimed tee times, which you can often purchase at significant discounts.
- Buy used: Manufacturers release new generations of their products each year, and equipment is much more affordable when purchased a year or two after it’s introduced.
- Cater to your skill level: You don’t necessarily need all the absolute top-of-the line equipment if you’re a high handicapper. In fact, buying above your skill level can actually end up hurting your game because that equipment is designed for a different type of player.
- Take a group lesson: One-on-one instruction is inherently more costly than group lessons, and if you’re a beginning golfer you’ll be able to get what you need from the latter.
- Opt for an assistant pro: The head golf pro at any given course will charge more for lessons than his or her assistants. An assistant pro will be plenty knowledgeable and may even have more incentive to work hard and help you improve in order to make a name for him or herself.
- Greens Fees:
- The popularity of golf is highly correlated to the state of the economy and consumer affluence.
- The numbers of people who play golf and the rounds they play are expected to rise through 2020.
- The appeal of golf courses as a real estate amenity caused the number of courses in the U.S. to skyrocket in the 80’s and 90’s.
- The lengthening and increased difficulty of the golf courses that host professional tournaments – caused by advances in equipment technology – had a trickle-down effect on courses meant for amateurs. This in turn increased maintenance costs and turned many players off from the game.
- Moving forward, golf courses will emphasize sustainable maintenance and designs intended for amateur play.