The world of golf is made up of two planets: Planet Hollywood and Planet Humility.
Jay Karen, CEO of the National Golf Course Owners Association, once used that analogy at an industry conference and it’s apropos.
Planet Hollywood is everything we see on TV. It is Tiger Woods and major championships and sponsorship logos and $15 million bonus checks. It is The Match II, which attracted oodles of eyeballs to the sport on Sunday.
“We need that planet to be healthy because it provides a source of energy to our planet, which is aspiration and enthusiasm,” Karen says. “Our planet is 10 times as big as that planet when you add up the economic impact and dollars passing through 15,000+ courses.”
And so while matches with Tiger and Phil and Rory and Rickie grabbed headlines and the re-start of the PGA Tour, LPGA and European Tour seasons can’t come soon enough, it is Planet Humility – those people that make up the backbone of our game – that golfers should really be concerned about.
These are strange times living through a global pandemic. Suddenly, golf courses are packed in a way the industry hasn’t experienced since Tiger Woods was revolutionizing the game in the late 1990s and former PGA Tour Commissioner Tim Finchem was predicting 50 million golfers by 2020.
Well, that didn’t happen, but golf has been given this new-found seal of approval highlighting its healthy aspects and its ability to provide safe recreation. As courses across the country re-open there is pent up demand among golfers to get out and play. Tee sheets are mostly filled and former golfers and those trying out the sport for the first time are emerging out of the woodwork desperate to be in the sunshine and doing something, anything that has been deemed “COVID OK.” There is renewed belief that golf can grab a bigger piece of the pie among recreational and entertainment options.
“This uptick in demand could have a more sustainable life than those that kicked the tires because Tiger’s a rock-star athlete,” Karen said. “People are coming to the game for the reasons that they end up staying for the longterm: to be outside, to recreate with friends, for enjoyment while social distancing. We want people to come to the reasons to keep playing into their 90s.”
But the golf industry can’t ignore the long road it has ahead of it. The pandemic simply exacerbates the existing battle for survival for many golf courses in a land rich, cash poor business.
“When cash flow gets turned off for a few months that is a serious existential concern for some businesses,” Karen said.
When asked in an April survey by Golf Now how long their course could go without green-fee revenue during golf season before their business “suffers irreparable damage,” 27% of 1,300 respondents said less than one month, 50% said from one to three months and the remaining 22% said they could go three months or longer.
The fear is that this unprecedented disruption of their day-to-day business due to state and city mandates arising from the coronavirus pandemic will accelerate the failure of businesses that had been fighting the good fight and hanging on by their fingernails. So far, we’re only seeing isolated cases of closings, but the City of Dayton’s decision to close 90 of its 108 municipal golf holes in the municipality’s portfolio, which according to the Dayton Daily News required a subsidy of an average of nearly $500,000 per year for the last four years, is disconcerting and could be indicative of a larger trend. After all, Industry analyst Jim Koppenhaver, president of research firm Pellucid Corp., concluded the city made the right call.
“Not the right call for golf, justice, and the American way but the right financial call for a city of their size, with budget issues and with COVID still the big unknown in operations, rounds, revenues and costs for ’20 and beyond,” he wrote in The Pellucid Perspective’s May issue.
Everyone mourns the loss of a golf course, but it has become an all too familiar story due to oversupply — Finchem’s 50 million golfers by the end of 2020 likely will be half that. According to the National Golf Foundation, golf course closings have outnumbered openings by a wide margin every year since 2006. With the loss of high-margin food and beverage sales, restrictions on cart use and membership rolls likely to take a hit with soaring unemployment rates, golf course operators can use all the rounds they can get; otherwise the figure for closings is likely to get worse.
“It’s a tightrope walk to keep the business alive, keep your people employed and keep the golf business from going into a depression and the other side of the rope is keeping your customers who need air, sunshine and want to be in an open space as safe as possible,” Karen said.
The golf industry rarely elicits sympathy and empathy from the rest of the world. This is the first piece of disaster-relief legislation since Hurricane Katrina that didn’t specifically exclude golf from qualifying for the disaster relief.
“That was a big step forward,” Karen said. “When the legislation is drafted, winners and losers are chosen and golf has for the last 15 years been in the ‘who doesn’t’ category. Federal support through PPP (Paycheck Protection Program) could be a lifeline for many courses.”
It was refreshing to see Planet Hollywood and Planet Humility join forces to triage the emergency and to sing the virtues of golf from the same songbook. That included issuing “Back2Golf,” a compilation of best practices into one set of guidelines.
The industry has rallied – and will need to continue to rally – to help its own. The PGA of America established the Golf Emergency Relief Fund to provide short-term financial assistance to industry workers facing financial hardships. The R&A announced a COVID-19 Support Fund, with a focus on helping “national associations and other affiliated bodies in Great Britain and Ireland.”
“The R&A Covid-19 Support Fund will enable national associations and other key bodies to provide support to some of their members,” Martin Slumbers, chief executive of the R&A, said. “We know that many challenges lie ahead but club golf is the bedrock of our sport and hopefully this fund will help to begin the process of recovery.”
The reality of Karen’s planet analogy is that both planets rely on each other for survival. Planet Hollywood needs the 24 million customers to keep playing golf to feed the lifelong nature of the fandom.
For the first time in a long time it feels as if the two planets in the golf universe are pulling together and orbiting in the same universe. It only took a global pandemic to do so.
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