Last Update :8/2/2018

July OtR abstract: Is Industry Course Correction Costing Us Golfers?


Volume 17 • Number 7

Is Industry Course Correction Costing Us Golfers?

Spoiler alert; the answer is "yes."  The more interesting questions are "How many?" and "Is that an acceptable trade-off for getting our supply/demand back to equilibrium?" Like many of my more provocative topics, musings and math, this one came from several recent conversations with industry colleagues around the topic of golf courses going under within their competitive set and them not seeing any appreciable increase in rounds (I initially asked them whether their customer base had expanded or they were getting higher frequency from their existing customers but then realized that they, like the majority of operators, didn't know how many unique customers they have or their frequency of trips or spending, oops).

I took in those anecdotal observations from several operators and then put that together with an observation from our '17 State of the Industry which was that the average annual rounds decline rate over the past decade and the annual net closure rate were running pretty similar.  That led me to the not uninteresting question of, "Did we artificially inflate the consumer base and rounds in the 1990s following the "Build it and they will come" model to now experience the "If you plow it they will leave" scenario?"  I'll bet you've never thought of it that way have you? (If you did, you should have written a newsletter on it just for bragging rights)  I'm not going to say that this is the most mathematically sound theory I've ever put out there but, over the course of this issue, I'm going to give you some support points to chew on and then you can decide:

  • Build it and they will come - If you obliterate the accessibility barrier (think Starbucks), yes you will likely increase the user base and/or frequency but whether you can increase it enough to support all those incremental locations is the grand experiment.  Ours failed.
  • If you take out a disproportionate number of the "bunny slopes" (9 hole facilities, more remote locations, modestly-priced), you will likely impact participants more than rounds (sound familiar, the golfer base is currently declining ~3% annually, rounds declining ~1% annually?).  The core customer base for these facilities is lower frequency golfers, less emotionally attached; if you remove their preferred venue they likely fall off the golf "wagon."
  • Can we quantify how much of the annual golfer base decline is "potentially" related to supply contraction and call that the "unmanaged scenario" of participant decline which is the necessary, but unintended, consequence of fixing the supply/demand equilibrium?

For our Executive Summary recipients, you can get the rest of the story one of three ways (all can be previewed and purchased at Pellucid's website (

  1. Subscribe to the Pellucid Publications Membership  for $495/yr.  Annual subscribers get access to all Pellucid publications (Outside the Ropes monthly digital newsletter, annual State of the Industry report portfolio (PowerPoint presentation, PDF commentary report, access to Orlando video of presentation), monthly Geographic Weather Impact Tracking (US, 45 regions, 61 markets), Top 25 US Golf Markets Ranking Scorecard (25+ dimensions and ranking for largest 25 markets) and the National Consumer Franchise Health Scorecard (expanded data and tables underlying the SoI's summary figures)
  2. Subscribe to OtR, 12 monthly issues for $130/yr with a money-back guarantee if you're not satisfied at any time during your subscription.  Subscribers also get access to the historical archive of past issues (50+) via the members-only section of the Pellucid website.
  3. Purchase single issues (including this one) for $14.95 per issue; click here to view available issues by title and select those of interest to purchase and download

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