Editor’s Note: Golf Inc. reached out to four of the most powerful people in golf, including Jay Karen, CEO of the National Golf Course Owners Association. Here are his thoughts on the future of the business.
What do you believe are the biggest challenges facing the golf industry in the year ahead?
If the economy in America worsens in 2023, it will result in a challenging situation for golf courses. Costs of doing business will continue to rise, and tee time pricing will be looked at once again as a lever to pull in the name of keeping customers. But lowering price does not increase demand or engagement in golf. The fallacy is a dangerous and seductive one, but it only hurts the operation. Also, land-rich businesses like golf will have bigger targets on our backs for increased government intervention in areas like water access, environment, taxation and more. The industry needs to stay alert and connected to all levels of government, so that when the day of adverse legislation comes, we have the data, narrative and relationships to properly defend golf.
While golf is enjoying a tremendous popularity surge, how much of that popularity do you think will be long term?
Crystal-balling is a dangerous business, but I am optimistic about the long-term retention prospect of the increase in demand we have seen the past three years. If we compare the stimulus behind what drove the last surge in demand 25 years ago to the stimuli underpinning the recent surge, we can clearly see they are apples and oranges.
The star power of Tiger Woods drew millions of new people to our game, but most of those tire-kickers did not stick around. Why? Watching Tiger do his thing at the Masters, while it sowed seeds of elite aspiration and fandom, does not translate very well — from a sustainability standpoint — into what it means to play golf at your local daily fee facility, or to jump into a private club membership investment.
I idolized Pete Rose as a kid, but it didn’t mean I enjoyed my one-year Little League baseball career. Fast forward to COVID, and people flocked to golf because it offered a salve and a refuge for some fundamental needs. Golf was the perfect answer for the need to get outside, to engage in something active or athletic and to satisfy our most human need to be with friends and family. These are the same reasons people stay with the game for their entire lives.
When product meets motivation at the right time and place, engagement and retention stand a better chance of long-term success. In short, people caught the Tiger Bug 25 years ago, whereas people caught the Golf Bug this time around. That’s more promising.
What do you believe are the most important fundamentals required to underpin, nurture, and maintain the interest and loyalty of this surge of new golfers?
To turn the surge into a new floor of performance for the industry, I think a few things must take place. First and foremost, we need to get the tire-kickers and newbies to experience and repeat “shot euphoria” as soon as possible. I love this term, I believe coined by my friend Dr. Joe Beditz, because every golfer knows about what I speak.
[It’s] that indescribable feeling of satisfaction when the club connects with the ball the way you want it to. The more that shot euphoria is part of your golfing experience, the more you want to come back and play again. If your game is absent of shot euphoria, you are not even going to stick around for all the other reasons that make this game so great (being outdoors, social, active, etc).
The frustration of not advancing the ball trumps everything else. Therefore, it’s key for courses to get their new golfers deeply engaged in programming and lessons to reach that level of competency that creates golfers. We have to go way beyond offering lessons for $100 per hour as our solution to helping new golfers, especially adults. New golfers simply don’t feel the value in spending a lot of money yet, not until they are bitten hard by the bug. We have junior programs galore in our industry. If as much energy was put towards adult engagement, we would see a monumental and immediate return.
Technology is seeing a major increase in the industry. What technological developments do you see as being essential, or even longer term?
On the operations side, I’m very bullish on software systems that analyze large amounts of information to give operators tools to yield more revenue out of their operations. Dynamic pricing, remarketing, subscription systems, etc. We know it works, and we will start to see more ubiquitous participation over the coming years.
I believe over the longer term, more operators will use technology that allows golfers to self-check-in. It will free up labor costs and allow more golf professionals to be out and among the golfers instead of checking people in. The same goes for self-check-out or vending options that allow golfers to get the essentials, so staff doesn’t have to manage the experience. The most exciting technological development, though, is the growth of golf entertainment at green grass courses. Enhancing the driving range with technology, or installing a simulator business, provides a new six-figure income stream that’s not always possible to harvest out of the tee sheet.
Any final thoughts on trends or changes the golf industry will face in the coming year?
It’s the unknown that concerns golf course owners, and by extension their trade association. If the pandemic taught us anything, it’s the strength and resilience of small business owners. I’ve never met a group of men and women, as scrappy and nimble and smart as golf, course owners and operators. But for too long we have been driven by negative circumstances in our industry, and we have had a taste of success and confidence lately. We need to hold onto this confidence as we go into the next couple of years.
Editor’s Note: In the following posts, you’ll hear from Steve Skinner, CEO of KemperSports and Joe Beditz, CEO of the National Golf Foundation. Click here to read the thoughts from Greg Norman, CEO of Greg Norman Co. & LIV Golf Investments.