Vital Signs, june 17, 2016

     This year’s Golf Investor Sentiment Survey delivers a mixed message: Members of the investment community continue to view the golf industry favorably, it says, but they aren’t quite as confident about our economic prospects as they were last year.
     Such a conclusion begs an obvious question: Is this good news or bad news?
     Marcus & Millichap’s Leisure Investment Properties Group, the entity the conducted the survey, believes on the one hand that the data it’s collected reflects “a considerable drop in optimism.” The point is hard to dispute, for the group’s investment index, its annual rendering of investors’ feelings about our business, has fallen to 57.1, a 10 percent decline from the 63.4 recorded in 2015.
     On the other hand, though, any fair reading of the data suggests that investors are clearly positive about U.S. golf operations in 2016. Regarding daily-fee golf, more than half of the respondents (55 percent) believe that the number of rounds played at their facilities will increase, while only 11 percent expect a decrease. And regarding private clubs, there’s also considerable faith: 58 percent of the respondents expect membership numbers to increase, 48 percent expect annual dues to increase, and 36 percent expect initiation fees to increase.
     It’s also important to emphasize that the investment index for 2016 remains well above 50, which means that the survey’s participants are, by and large, giving golf the proverbial thumbs-up. No matter how you slice it, we’re in a far better place than we were in the beginning of this decade.

     You can count John McConnell among those who are expressing confidence in golf’s near-term future. “We see the light at the end of the tunnel, because the industry has turned around,” he recently told the Raleigh News & Observer. Some might disagree with McConnell’s analysis, but his ownership group appears to have found a winning formula for golf operations. Since 2003, McConnell Golf has reportedly invested $25 million in a dozen golf properties, 10 of which had been bleeding red ink. Today, according to the News & Observer, all but four are profitable. What’s more, the business as a whole is said to be in the black.