Robust recovery predicted for golf

While golf courses have taken a big financial hit the last few months, experts predict a robust recovery for the industry that will start in June.

“I expect a V-shaped recovery,” said Steve Ekovich, National Managing Director of the Leisure Investment Properties Group and Vice President of Investments for Marcus & Millichap. ”There really is hope at the end of the tunnel and it will not be as bad as people think.”

Ekovich made the comment at Golf Inc. Innovation Day on April 20. The virtual event featured 22 of the industry’s leaders in six sessions, talking about the COVID-19 pandemic and its impact on golf courses and sharing innovative ideas to reboot the golf business. 

Ekovich compared the pandemic to other cataclysmic events, including September 11, 2001, the Great Recession in 2009, and the 1973 OPEC oil crisis. In each case, the stock market tanked, but rebounded the next year.

Alan Nevin, an economist and real estate expert with Xpera Group, said the underlying financials of the current economy are in much better shape than prior crises, including the stock market crash in 1929. 

He said the economy is different from 1929 and that the price of money is effectively zero, with low interest rates.

“The banks are absolutely flush with money and they got to get it out,” he said. “And that means that when we come back, we will come back with a boom.”

Nevin predicted that the housing construction industry will lead the resurgence, which would start around June 1. 

“The recovery will be V-shaped,” he said, referring to quick recovery. “The natives are restless, and they want to get back and spend money and play golf ...” 

He also predicted that tourism will be back in the summer. But other experts warned that travel will be more limited. 

Jon Last, President of Sports & Leisure Research Group, shared data from a survey that shows that the percent of golfers who are open to travel has dropped with only 31% planning to take as many trips as the prior year. 

But overall, he said the data is not as bad for golf as for other leisure activities. 

“Golf is not as jarred as the rest of the leisure market,” he said. 

Golf’s confidence level is at 31%, which is in the top five of all activities, and higher than football, baseball and basketball. 

Further, he said there is pent up demand for golf. 

Ekovich predicts that 25% of public courses and private clubs will be in major distress, with those that do not get government funding being forced to sell or go into bankruptcy. 

“I would expect that the number of courses that will close to be 15 to 30% higher depending on how many months we are closed,” he said. There industry has averaged around 200 closures a year. 

Ekovich said healthy courses will adapt with greater sanitation, more take out sales, more tee times booked online among other changes. 

Golf Inc. Innovation Strategy Conference had been planned as a live event, but was moved to a virtual event due to the pandemic. More than 600 people attended at least one of the six sessions. Session recordings are available here.

To view all of the educational sessions from Innovation Strategy Conference, click here.

 

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