New Industry Research Presented at NGF’s Annual Golf Business Symposium
The NGF recently held its 9th annual Golf Business Symposium, the definitive gathering of golf business leaders in America. As part of its mission to serve and inform every segment of the golf marketplace, the NGF holds this annual invitation-only assembly to offer an assessment of the current state of the industry and provide decision-makers from companies and associations across the game research about the economic, sociological, and demographic trends affecting it.
More than 120 executives—half at the C-suite level—gathered at the Union League Club in Chicago, a few blocks from where the Foundation was established 80 years ago. The attendees represented the major golf associations, manufacturers, clubs and resorts, media, consultancies, software providers, retailers, and other companies. (Click here for the full attendee list.) Along with reports on current market data, they heard presentations that analyzed two consumer groups critical to the golf market—affluents and “Centennials”—and were provided with key findings on how to reach and hold members of both segments.
State of the Industry
Stating that the goal of the Symposium was to provide “insight and honest dialogue,” NGF President Dr. Joe Beditz opened the session by assaying the State of the Industry, noting that the golf market continues to search for equilibrium between supply and demand.
On the one hand, NGF data show a slight year-over-year decline in golf participation—from 24.7 to 24.1 million participants (those who played at least one round of golf in the survey year) from 2014 to 2015. But Beditz also cited positive signs of the strong demand for golf: These included a large number of beginning golfers—2.2 million in 2015, nearly reaching the historic peak of 2.4 million during the “Tiger boom” of the early 2000s—and a surge among non-golfers interested in playing the game (latent demand): That number is at an all-time measured high of 37 million.
Among other trends were gaps in youth participation, particularly among teenage boys, but offset by participation growth among younger, school-age children. Beditz also talked about the continuing natural market correction in course supply, including a slight net decline of 1 percent in 2015.He was careful to remind the audience that this followed 44 percent growth in facilities since the mid-1980s. Research points to course supply stabilizing within 7 to 10 years, with an anticipated overall drop of 10 percent from the high water mark of 2005.
The NGF also reported the results of its first Executive Sentiment study, which asked C-level industry executives how they feel about the future. Overall perceptions were positive to strongly positive, with most respondents believing that the next 3 to 5 years will see growth in the number of golfers and rounds played, as well as growth in their individual businesses.
The positive outlook was reinforced by a panel discussion among four top executives. Panelists Chip Brewer (President & CEO, Callaway Golf), Bill Brown (Group Vice President, The TORO Company), Peter Hill (Chairman & CEO, Billy Casper Golf), and Dick Sullivan (President & CEO, PGA TOUR Superstore)—all members of the NGF’s Board of Directors—spoke on a range of issues affecting the industry. The general feeling from the panel, in speaking about efforts to grow the game and reach new markets, was summed up by Dick Sullivan, who said, “We have to focus on the experience, not on how good someone is. We must make our venues serve all levels of golfers.”
Centennials and Affluents
Two guest speakers presented their companies’ research on market segments that are, and will continue to be, key to the golf business. Erik Medina of The Futures Company introduced the audience to “Centennials,” the generation born since 1997, which is growing up in very difficult times. Being born into an era of slow-growth economics, polarized politics, and global terror appears to be creating a consumer class that values openness regarding issues such as multi-culturalism, internationalism, and equality; personal resilience; individuality; and authenticity. These traits are already obvious in how these young people interact, shop, and relax (think online and social media). According to the Futures Company, many of their traits—such as individuality and resilience—would seem to make them good golf prospects, but only if companies and facilities conduct business in a way that mirrors their very open worldview.
Chandler Mount of YouGov talked about “Affluents,” the very richest Americans, whose ranks are changing as more wealth is handed down and more money is put into savings. When they do spend, it is on experiences rather than goods, but this group seems more wary than the general public of the possibility of another recession, and they have taken precautions by lowering their debt and increasing their savings. Mount also talked about how “luxury” is changing from a goal to a “path,” and how “brand loyalty” is being replaced by “advocacy,” where fewer but more reliable and passionate advocates prove more valuable to a brand’s success. This has significant implications to companies selling to an upscale audience whether online or in person,including the need to establish “personal goodwill” through exemplary customer service and customized shopping experiences.
“… in the last 5 years, more than 10 million people tried golf…”
Wrapping up the Symposium, Dr. Beditz challenged attendees to “change the numbers game” of retaining golfers. He made the point that NGF data show that in the last 5 years, more than 10 million people tried golf for the first time, while 12 million said they were “very interested” in playing and another 25 million were “somewhat interested.”
As Beditz put it, “This is as good as it gets—and yet we’re not growing.” There is great interest in playing golf, said Beditz: “The challenge isn’t attracting people to the game, it’s turning them into long-term customers.” With that, he proposed that golf seriously invest in “incubation”—nurturing beginners by providing the optimal conditions for their growth and development.
Noting that retention follows from “practice, instruction, and play,” Beditz’s suggestions included clubs hiring a salaried professional specifically to give complimentary lessons and tips to golfers on driving ranges; finding ways to make practice more fun (taking a page from the TopGolf manual); creating a database of beginning golfers and staying in touch with them; “coopetition” among courses, pooling their resources to attract and incubate new golfers; and “radical hospitality,” which means going above and beyond in welcoming new golfers to the fold and “building our congregation” of true believers.
The meeting ended with the announcement of next year’s Symposium, which will be May 9-10, 2017, at World Golf Village, in St. Augustine, Florida, in conjunction with the World Golf Hall of Fame induction and THE PLAYERS Championship.