Florida might be ground-zero for the golf market right now. Like several other golf meccas around the nation, the state is overbuilt – particularly with daily fees designed to attract tourists and facilities directed at the burgeoning geezer population. Parts of the state are as economically depressed as any in the U.S. and the real estate downturn and related financial problems among big developers like WCI have hit golf hard.
Yet, as an article in yesterday’s Florida Today (http://www.floridatoday.com/article/20090308/NEWS01/903080318/1006 ) points out accurately, all is not gloom and doom for facilities in the bellwether Orlando market. Read the article for yourself, but here’s the quickie version:
- Play is relatively flat or even up compared to last year.
- Golfers have migrated to “value” courses that offer and promote packages or do selective discounting. Mike Hughes of the NGCOA is quoted in the story referring to this as the “Wal-Mart effect.”
- Courses are focusing on retaining customers as much as attracting new rounds.
- The weather will continue to be the biggest factor in how overall rounds and revenues stack up.
In short, the article captures what a lot of us have been saying for years: the game itself is relatively recession-resistant (certainly not recession-proof, as some have claimed) but Mother Nature is our version of the Dow Jones Index. That’s just the way it is.
Don’t get me wrong. Hundreds – if not a thousand or more – of facilities will cease to exist over the next three years or so. Thousands more will face serious financial problems or receivership. We may well see another situation like the Resolution Trust Corporation of the late ‘80s when the U.S. government briefly became the largest golf course owner in the country. Many – perhaps including a few of you reading this right now – will be forced to look for a new job at some point. The market needed to correct itself and this current crisis is simply accelerating a slow process that was already under way.
Yet, the fact that when, weather permitting, people still want to play the game means that our core business proposition is still sound. The facilities that are the most creative and manage most effectively will come through this storm positioned to be market leaders as the recession ends.
