Among the many by-products of the COVID induced surge in golf has been a dramatic increase in the cost of playing the game. Partially as a result of demand and partially as a result of inflation, the cost of golf has increased dramatically in the past 3 years after many years of competitive pricing in both the daily-fee and private golf segments. How much will the market accept? In many instances, golf was “sold” for less than it cost to produce resulting in the failure of many courses and market contraction prior to 2020. Given the now increased cost begs the question; Is golf a game for everyone or only those of elevated economic status?
There are now premiere daily-fee courses charging in excess of $500-$800 for a single round of golf. Private club entrance fees at some clubs have more than doubled and we’ve seen entrance fees in excess of a half million dollars and annual dues in excess of $30,000. I know of numerous clubs that increased dues between 15% and 20%, just in the past year – because they can. Is this sustainable? Will it discourage golf participation growth in the future?
Yes, golfers tend to be an affluent lot, but what percentage of them actually prioritize golf to the point where they’re willing to spend at these increasing levels? At many private clubs, the majority of members are less-frequent users willing to pay for the presumed access private clubs provide for those limited number of times that they may want to play or entertain clients or customers. As clubs have become more crowded, access has become limited and those less-frequent users are questioning the increasing cost. Do those members get to a point – after COVID – where, despite their financial capability that the value no longer equals the cost?
One of golf’s biggest challenges is attracting not only the next generation, but also those groups the game has historically left behind. Most agree that for the game to achieve sustainable growth we need to attract younger players, who seek a different atmosphere than days gone by and include constantly being “connected” as part of their lives. Telling a millennial they can’t use their cell phone on the golf course can be a deal breaker. Diversity, Equity & Inclusion (DEI) has become a key buzzword in many venues and golf is no different. Are the efforts for golf to diversify – and grow – nothing more than lip service or are those efforts real and sincerely designed to broaden the game’s appeal? Time will tell.
As many return to their pre-COVID activities and remote work declines as more workers return to the office, golf will have to make up the resulting potential losses to turn what many believe is a temporary surge into permanent gains in golf participation. A continually rising cost at rates exceeding even the recent high inflation would seem to conflict with efforts to grow the game.
It’s not only dues and green fees that have increased, but the cost of equipment, apparel, golf course maintenance, accessories and travel to golf destinations have gone up dramatically. A one hour golf lesson with a top instructor can cost $400 or more.
One area where I’ve observed a particular problem is in smaller markets, where price sensitivity is more acute than the more densely populated metro areas where many clubs are currently thriving. In many small markets private clubs find themselves competing with daily-fee courses for golfers in what becomes an analysis of the cost per round in determining where to play golf and whether or not to join the club. Many smaller market private clubs have opened their doors to daily-fee play and some have failed and either closed or been acquired by management companies or smaller groups of members seeking to save the club from extinction. The trickle-down impact on the daily-fee courses in those markets has caused some to close, if the clubs survive. Some markets still have an over-supply of golf.
Even municipal courses, historically a haven for affordable golf have been forced to choose between operating profitably, or providing a recreational amenity to the community due to rising costs. The politics of that is always most interesting.
Affordable golf, in all segments is necessary to grow the game in a sustainable manner. Combined with the environmental issues like water usage and more, golf, despite its recent success has challenges ahead to consider.
Last year (2022) rounds declined after 2 years of dramatic increases. Is that a sign of a decline in the COVID golf surge? Some say it’s weather. Time will tell, but as the cost increases, fewer will be able to play and the greatest impact is likely to be on those the game needs most to grow – The “3 M’s” (Millennials, Minorities & Moms). As we all know, eating too much, too fast, can often make one sick.