Vital Signs, october 2, 2015

     Economic contraction is putting the squeeze on China’s golf operations. The Globe & Mail, a Canadian newspaper, reports that the number of rounds played in the People’s Republic fell “for the first time” last year, by 2.1 percent. “The economic situation is not good,” a former official of the China Golf Association told the newspaper. “And when the economy is bad, the first thing people do is to cut luxury or unnecessary expenses.” The newspaper didn’t say it, but government antipathy may also be contributing to the downturn.

     It’s getting harder to characterize U.S. golf operations as a mom-and-pop industry. In the August issue of the Pellucid Perspective, Steven Ekovich of Marcus & Millichap reckons that at least 20 percent of our nation’s golf properties are now either owned or managed by “professionals,” a group that presumably consists of people who attended business school. Pellucid believes that the estimate “may be a trifle high when all golf facilities are included,” but it acknowledges that consolidation in the golf industry is likely at “an all-time high” and “almost certain to continue.”

     One of the nation’s best-known seniors-only communities may soon begin to phase out of the golf business. These days only one-quarter of the roughly 30,000 retirees who live in Sun City West play golf, and budget-minded officials have reportedly begun to worry that the majority of residents “could rise up and become resentful if they continue to subsidize something they aren’t using.” The community, in suburban Phoenix, Arizona, has seven 18-hole courses -- it “was built around the sport,” the Sun City West Independent notes -- but long-range planners are now contemplating a future with forms of recreation that would be more attractive to prospective home buyers.

     Although course operators continue to struggle in many of parts of our nation, golf’s prospects have brightened in Minnesota, where the industry is said to be headed toward “perhaps the fastest year-over-year rebound in the nation.” The Minneapolis Star Tribune has found evidence indicating that “a seeming decade-long death spiral is being reversed” and that both public and private venues are beginning “to punch their way out of the rough.” The newspaper credits this year’s increased play primarily to “sensational” weather, cheaper greens fees, and course closings that have eliminated competition. “It’s just a different world,” said Kevin Norby, a golf architect whose firm is apparently having “its best two years in a quarter-century.” Citing data provided by PGA PerformanceTrak, the newspaper reports that the number of rounds played per 18-hole course in Minnesota has increased by 16 percent since 2011, when they presumably bottomed out.

     It appears that course operators in British Columbia, Canada may also ring up significantly more sales in 2015. Full-season figures aren’t yet in, but this summer the Vancouver Sun reported that business at the province’s courses was “brisk,” with many properties posting double-digit increases in the number of rounds played. “There is something of a buzz in the air around golf,” said an official with the province’s largest golf operator. “I think people are gravitating toward playing a little bit more golf and getting out there and enjoying themselves.” The newspaper credits the uptick to “marvelous weather,” discounts on greens fees, and the popularity of Jordan Spieth, Rory McIlroy, and other young stars on the professional circuit.

     What’s the economic value of a country-club member in southwestern Ohio? About $38,000, according to the Miami Valley Golf Association. The association has determined that private golf clubs in its operating area -- Dayton and surrounding counties -- have since 2006 lost more than 3,600 members and $136 million. The math works out to $37,777 per departed member.