For those that think the golf boom is over…

[Shilgy]

I just read that equipment sales in October 2023 were in fact down 1.2% from October 2022.  So you’re right!

 

However…..equipment sales in October 2023 are UP a whopping 43.8% from October 2019.

 

https://www.firstcallgolf.com/industry-news/release/2023-11-27/october-golf-retail-sales-on-par?utm_source=newsletter&utm_medium=email&utm_campaign=The+First+Call+11-28-23

[Mikey_HACKilroy]

In order to truly represent grown or decline, one has to move beyond just individual year over year or one month versus this month.

Since there is random chance involved with any pattern of sales, one has to take month after month of detail and compare it more than just this month this year versus this month in other years. Instead, one must view the industry year over year for the past 5+ years to truly understand and interpret any blips.

 

Given the pandemic blip, I would want to go back ten years and measure margins and profits to remove inflation from the equation (since that will impact profit results in COGS rather than after margins are accounted).

Though, you don't even need to get that detailed. You just have to see the growth trend over the past 5-10 years to see if the trend line points north, side to side, or south....... 43.8% growth is merely a result of when people decided to make the purchases through random chance.

[Shilgy]

28 minutes ago, Mikey_HACKilroy said:

In order to truly represent grown or decline, one has to move beyond just individual year over year or one month versus this month.

Since there is random chance involved with any pattern of sales, one has to take month after month of detail and compare it more than just this month this year versus this month in other years. Instead, one must view the industry year over year for the past 5+ years to truly understand and interpret any blips.

 

Given the pandemic blip, I would want to go back ten years and measure margins and profits to remove inflation from the equation (since that will impact profit results in COGS rather than after margins are accounted).

Though, you don't even need to get that detailed. You just have to see the growth trend over the past 5-10 years to see if the trend line points north, side to side, or south....... 43.8% growth is merely a result of when people decided to make the purchases through random chance.

Sure inflation….have prices gone up that much?  I’d don’t think so.

 

You may have missed this to reduce your “random chance” idea:

 

On-Off Course YTD ’23 vs ’19: Dollars +38.6%

[Mikey_HACKilroy]

28 minutes ago, Shilgy said:

Sure inflation….have prices gone up that much?  I’d don’t think so.

 

You may have missed this to reduce your “random chance” idea:

 

On-Off Course YTD ’23 vs ’19: Dollars +38.6%

 

I wasn't really suggesting anything about what you were saying with my inflation remarks. I was really pointing out whilst saying year over year and longer term trends are more important than individual months.

Gross Profits/Margins remove inflationary costs and are a better measure than overall sales revenues. That's all. You weren't really pointing that out, but I was pointing it out by extension.

Where I was suggesting a change of viewpoint was in the individual month to month. Random chance isn't saying people randomly purchase items. It is saying in a large sample of people, they decide to buy independently of each other. So by random chance, one particular October was much bigger. Yet, if I went back to 2019 for most items I'd say huge amounts of growth.

What you are essentially pointing out is how this year has shown substantial purchases in October relative to a month just before the pandemic. Though, I could find month to month comparisons no doubt where it is not so. So, relative to golf's decline or growth, I would take that with a grain of salt.

Though, nowhere did I suggest you were wrong about what you were posting; just what I view as a better indicator over time.

Personally, I don't think golf is declining at all. Though, I haven't looked at the industry over 5-10 years to see a trend. It seems plenty popular, though.

Edited November 28, 2023 by Mikey_HACKilroy

[coreyhr]

I rarely buy clubs new, so I can't really speak to that topic. But I can say with certainty that the used club market has cooled off considerably. Selling used clubs on here has become much more difficult and it's low ball offer after low ball offer. That wasn't the case at all 2 years ago. What that means for the game of golf, I have no idea. 

[puresurfr]

Greens fees are through the roof in the Bay Area ( CA ).  I hope the boom slows down a tiny bit, its getting very pricey to play the nicer courses !

[RoyalMustang]

No matter what, things won't likely get back to pre-COVID use patterns outside of a major recession or other event. 

 

Let's assume that interest in golf doubled immediately post-COVID. I could see this being accurate, as clubs went from having 15% open equity shares to a multi-year wating list.

 

If that's the case. if only 40% of COVID golfers stick with it, that's still a huge bump of 40% overall. If you assume that interest in golf increased by 50% and 40% of those stick around, we still see overall interest at 20%, which is, again, still huge.

 

In other words, we had 100 golfers pre-COVID and 200 golfers in August of 2020. Keep 40% of the newbies longe-term and we are still at 140 golfers; keep 20% and we are still at 120 golfers. Also, if these new golfers are younger professionals and middle class folk, they could precipitate future growth via their kids. Older folks may be less likely to introduce their grandkids to the sport, especially these days when most families aren't near their elders.  

Edited November 28, 2023 by RoyalMustang

[596]

16 minutes ago, puresurfr said:

Greens fees are through the roof in the Bay Area ( CA ).  I hope the boom slows down a tiny bit, its getting very pricey to play the nicer courses !

That also comes with supply and demand. Our local course increased rates partly due to the extreme number of rounds we saw 2 years ago, 77,000.  They raised rates, rounds dropped to 65,000,  but they made more money!!  

[Shilgy]

2 hours ago, Mikey_HACKilroy said:

 

I wasn't really suggesting anything about what you were saying with my inflation remarks. I was really pointing out whilst saying year over year and longer term trends are more important than individual months.

Gross Profits/Margins remove inflationary costs and are a better measure than overall sales revenues. That's all. You weren't really pointing that out, but I was pointing it out by extension.

Where I was suggesting a change of viewpoint was in the individual month to month. Random chance isn't saying people randomly purchase items. It is saying in a large sample of people, they decide to buy independently of each other. So by random chance, one particular October was much bigger. Yet, if I went back to 2019 for most items I'd say huge amounts of growth.

What you are essentially pointing out is how this year has shown substantial purchases in October relative to a month just before the pandemic. Though, I could find month to month comparisons no doubt where it is not so. So, relative to golf's decline or growth, I would take that with a grain of salt.

Though, nowhere did I suggest you were wrong about what you were posting; just what I view as a better indicator over time.

Personally, I don't think golf is declining at all. Though, I haven't looked at the industry over 5-10 years to see a trend. It seems plenty popular, though.

Based on the year over year of 2023 to 2019 I’d be hard pressed to think you’d find a month it wasn’t up substantially.

 

Ill this boom last?  Probably not.  But I would hazard a guess it will remain much higher than pre-pandemic.

 

@RoyalMustang I was just finishing this post and noticed your post stating the same much more eloquently.

[RoyalMustang]

46 minutes ago, 596 said:

That also comes with supply and demand. Our local course increased rates partly due to the extreme number of rounds we saw 2 years ago, 77,000.  They raised rates, rounds dropped to 65,000,  but they made more money!!  

Yes, not to mention lower maintenance costs. Less wear and tear on the course. Better user experience due to faster rounds. 

 

Many companies overestimate their customer's price sensitivity. McDonalds is going gangbusters due to more expensive items on the menu. People might go online and complain about inflation and their $16 meal in a TikTok video, but look at what they are ordering: it isn't the Big Mac, small fries, and coke that we got for $5 as a kid. People forget that the actual items ordered are the baseline, not a "McDonalds Meal" in general. 

 

I owned a business and when I raised my prices 20%, my turnover actually increased. What happened? I re-branded myself as a premium option and found that our local market had a large clientele demanding a premium option. Price is a default indicator of quality. It got me out of competing with all of the other middle-market clowns. It's always good to have that non-price sensitive customer. 

 

Nate Silver just had a great piece on this yesterday; it's highly relative to golf as well. 

https://www.natesilver.net/p/the-mcdonalds-theory-of-why-everyone/comments 

Edited November 28, 2023 by RoyalMustang

[elwhippy]

Golf is certainly trying to ruin the boom. Green fees have rocketed way beyond inflation. Subs are jumping and gear is getting expensive again. The Flash Harry's who came to golf after Covid have left and gone to show off somewhere else. 

[Pepperturbo]

The Golf boom being over has little to do with pricing or profit margins.  A Golf boom is more about overall growth of the industry, that can include all sorts of misc items, clothing, equipment, green fees and golf real estate development, pvt club memberships, etc.   From what I've seen and heard from colleagues in or tied to golf business, the boom is long passed.  Yes, numbers on the P&L have increased, but that means little when inflation increased as well, making margins less than impressive. 

 

End of 2022 I bought T100S 5-W set (7 clubs), cost was about $1500, and bought a "2022) T200 2i at $265 including no-upcharge stock shaft.  Last August 2023, I bought the new T100 3-PW, (8 clubs) cost was over 2k and a new T200 2i, no-upcharge shaft, $320.  Also renewed 2 upscale public course club memberships, each increased over $50.  Prime green fees at both courses increased; one from 90 to 120, the other 99 to 115.

Edited November 28, 2023 by Pepperturbo

[596]

21 minutes ago, RoyalMustang said:

Yes, not to mention lower maintenance costs. Less wear and tear on the course. Better user experience due to faster rounds. 

 

Many companies overestimate their customer's price sensitivity. McDonalds is going gangbusters due to more expensive items on the menu. People might go online and complain about inflation and their $16 meal in a TikTok video, but look at what they are ordering: it isn't the Big Mac, small fries, and coke that we got for $5 as a kid. People forget that the actual items ordered are the baseline, not a "McDonalds Meal" in general. 

 

I owned a business and when I raised my prices 20%, my turnover actually increased. What happened? I re-branded myself as a premium option and found that our local market had a large clientele demanding a premium option. Price is a default indicator of quality. It got me out of competing with all of the other middle-market clowns. It's always good to have that non-price sensitive customer. 

 

Nate Silver just had a great piece on this yesterday; it's highly relative to golf as well. 

https://www.natesilver.net/p/the-mcdonalds-theory-of-why-everyone/comments 

I did the same as a business owner.  If I ran more then 73% occupancy, my rates were too low and at the same time increased expenses.  So you raise rates, lower occupancy, lower expenses and make more money.  There's a fine line that has to be found and maintained. 

 

Our course found this out beginning of last year. We even raised rates near 15% to 30% this year and so far rounds are not down.  

[airjammer]

In Middle Tennessee and it seems that the coures are only slightly busier than pre covid during the times I play. If the boom is dying, I fear that the courses will just shutdown and sell the land for development instead of lowering prices and be happy with making the same amount of profit as pre covid. 

[Mikey_HACKilroy]

3 hours ago, Shilgy said:

Based on the year over year of 2023 to 2019 I’d be hard pressed to think you’d find a month it wasn’t up substantially.

 

Ill this boom last?  Probably not.  But I would hazard a guess it will remain much higher than pre-pandemic.

 

@RoyalMustang I was just finishing this post and noticed your post stating the same much more eloquently.

 

That is not uncommon for just about any company/industry out there that in 2023 revenues are substantially higher. I don't doubt that is because of increased popularity gained in 2020-2021 especially.

So most of the growth has already been seen and so some of that will relax.... But everything is cyclical so there will be another golf boom at some point in the future.

It's a fun game.... even if it is frustrating. LOL

If it wasn't.... I would have bent all the clubs in the bag by now and canceled my WRX account.... LOL

 

[jda]

Mid tier public courses and the high end wanna-be exclusive courses around me had empty peak times and had to lower their rates this summer and fall.  $285 rounds down to $160 later this summer for the wanna-be-exclusive.  No price increase for weekend play on the mid-tier in some cases.  Deeply discounted multi-play passes.  Golf club flippers are not getting even as much as they purchased their limited items for.  These are the signs that I see around me.  I don't expect that to be the same everywhere.

 

The cheap golf courses seem to have no impact nor have the private clubs yet.  ...although I have seen some offers for discounted or waived club initiation fees.

[Soloman1]

On 11/28/2023 at 8:52 AM, Mikey_HACKilroy said:

What you are essentially pointing out is how this year has shown substantial purchases in October relative to a month just before the pandemic.

 

 October, 2019 was six to seven months into hard lockdowns.

 

I mistakenly said this above. It’s a mistake. I made a mistake. See below. Please don’t tell me it’s a mistake again. It was a mistake.

 

Consumables (primarily golf balls) have increased in retail price by 20+% since 2019.

 

 

Edited November 29, 2023 by Soloman1

[No_Catchy_Nickname]

37 minutes ago, Soloman1 said:

 

 October, 2019 was six to seven months into hard lockdowns.

 

Consumables (primarily golf balls) have increased in retail price by 20+% since 2019.

 

 

 

I think you're mixing up October 2019 with October 2020.

 

The early reports about a mystery disease starting leaking out of Wuhan in late December 2019/early January 2020, and the WHO declared a pandemic in March 2020.

 

Covid-19 Timeline

 

Incidentally, what I found amazing looking at the timeline is that Moderna apparently began trials of a vaccine in March 2020 as well. 

[Soloman1]

3 hours ago, No_Catchy_Nickname said:

 

I think you're mixing up October 2019 with October 2020.

 

The early reports about a mystery disease starting leaking out of Wuhan in late December 2019/early January 2020, and the WHO declared a pandemic in March 2020.

 

Covid-19 Timeline

 

Incidentally, what I found amazing looking at the timeline is that Moderna apparently began trials of a vaccine in March 2020 as well. 

 

Thanks, yes I did.

 

I have no defense other than it was about 6AM.

[Llortamaisey]

With half the boomers in retirement and the other half going into retirement during the remainder of the decade, I would suspect that golf participation would remain steady for the short term, or at least until they die off. Likewise, the average age of a golfer will continue to increase. 

[Mikey_HACKilroy]

4 hours ago, Soloman1 said:

 

 October, 2019 was six to seven months into hard lockdowns.

 

Consumables (primarily golf balls) have increased in retail price by 20+% since 2019.

 

 

 

You may want to go back and check your calendar. China started reporting "a virus" in October of 2019 which is why it was called COVID-19; it was discovered, categorized and then named based on the year the first cases were discovered/showed up. The first measured cases of it in the US were not until January of 2020.

October 2020 was approximately 7 months into the hard lock-downs.

Edited November 29, 2023 by Mikey_HACKilroy

[Soloman1]

Please read the posts below that.

 

Thanks.

[phizzy30]

On 11/28/2023 at 10:14 AM, puresurfr said:

Greens fees are through the roof in the Bay Area ( CA ).  I hope the boom slows down a tiny bit, its getting very pricey to play the nicer courses !

My brother has said the same.  The green fees here in LA and OC have gone up considerably as well.  Courses are now charging 15-20 bucks more since covid happened.  I b**** about it constantly yet still go play twice a week.  Oh the irony........

[Phreddy]

I like to look at rounds played data, which can have weather variation, but when plotted over a longer term can give a trend line.  While it had a very steep slope during COVID, the slope has moderated though not declined.  At least the last time I looked.  I think greens fees, initiation fees at clubs are lagging indicators.  They reflect past demand and using that to price for expectations.  When you start seeing them discounted you will know demand has declined, but again, as a lagging indicator.

 

I have no way of measuring the following conjecture, but as pure speculation, if 10 people took up the game during the pandemic:

 

3 dropped it as too time consuming, too hard, too expensive

3 are "recreational" players.  Getting out of the house 2-3 times a month, hanging with the crew, drinking a few beers..

2 took some lessons, bought some gear, enjoy the game and play as time permits

2 were smitten.  Lessons, started reading WRX, found a group of regulars/joined a league/joined a club and will be in the game for several years to come.

[puresurfr]

1 hour ago, phizzy30 said:

My brother has said the same.  The green fees here in LA and OC have gone up considerably as well.  Courses are now charging 15-20 bucks more since covid happened.  I b**** about it constantly yet still go play twice a week.  Oh the irony........

 yep I could stomach the 15-20, we have 50-75 increases and that adds quickly

[Chunkitgood]

We are in the manic stage before the final collapse.

[bcjim]

5 hours ago, Chunkitgood said:

We are in the manic stage before the final collapse.

One can only hope. 

 

 I played last Sunday about noon, it was cold, course was crowded. Pre pandemic, I'd have been playing solo and maybe not seeing anyone else.

 

 

[OnTheBag]

As @Phreddy stated, the real measure is round count when compared to the same 3 month period viewed in a 3-5 year cycle.  Most course managers and superintendents that i talk to saw a 6-8% drop in total rounds for the year and expect a steeper decline in bad weather months once those numbers are available.  Courses around Central Alabama are using 2019-2023 cycles for comparison.  

 

The key is to try and analyze how much is price driven, how much is loss of interest, and how much is affected by changes in the local economy.

 

I suspect that while the boom may have ended, we are entering a state of stabilization, rather than a steep decline.  

 

Either way, I would hope that most of the "dude bro" golfers have moved on to their next hobby and we get back to some civility on the course.  I realize that I'm a boomer but loud music and drinking games belong at the backyard BBQ, not the 6th fairway.

[TallGuy90]

The GM of the local course I play league play in said there down about 22% since 2020 Aug-Sep Vs Aug - Sep 2023. The course has been listed for sale since the beginning of 2022.

[larrybud]

On 11/28/2023 at 8:01 PM, jda said:

Mid tier public courses and the high end wanna-be exclusive courses around me had empty peak times and had to lower their rates this summer and fall.  $285 rounds down to $160 later this summer for the wanna-be-exclusive

Are you saying Mid-tier in your area is $160?