Case Study: Golf in the US

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Golf undeniably is big business in the United States. But an industry consortium, united through the World Golf Foundation and its GOLF 20/20 strategic initiative, wanted to know just how much it had grown in the five years since it commissioned an initial impact study.

So a second comprehensive study was commissioned for 2005 to understand golfs economic impact through its myriad of businesses and consumer touchpoints. Conducted by SRI International and released in January 2008, the 2005 Golf Economy Report reflected a telling story of continued growth and relevance in the US, including a total economic impact of $195bn and the creation of 2m jobs with wage income of $61m. Other highlights from the study included:• A direct economic impact of $76bn, reflecting a $14bn increase over 2000 (an annual growth rate of 4. 1%); this total was larger than the motion picture and video industries. • Golf facility operations accounted for $28bn and golf course capital investment totaled $3. 6bn. • Golfer supplies accounted for $6. 1bn in sales. • Tournaments, golf associations and endorsements were valued at $1. 7bn. • Golf generated $3. 5bn for charities. • Golf had a significant impact on enabled industries such as hospitality/tourism ($18bn) and real estate ($15bn). Again, that was 2005. Golf as a whole continued to grow – or at least hold steady – in key areas over the next year or two. But the health of the US golf industry is no less dictated by the whims of the national economy than other recreational/participatory endeavors that require a financial investment. Golf already had experienced a decrease in rounds and participation following the dotcom bust of 2000 and the economic fallout following 9/11/2001. So, understandably, the trending took another hit in and around the Great Recession, which has had a lingering effect as the economy as a whole continues its recovery. And it hasnt simply been a matter of declining rounds and participants. The National Golf Foundation has noted the number of golf courses has declined between fewer openings and more closures. Following a net loss of 26. 5 in 2006 in 18–hole equivalents, there were net losses of 8. 5 in 2007, 34 in 2008 and 90 in 2009, with a projection of around 60 losses for 2010. The NGF estimates that the number of golfers for 2010 will likely stay around the 27m reported for 2009, while the number of rounds will show a decrease of 2 to 4%. As the economy continues to rebound, consumer confidence and spending should begin having a positive impact on the golf industry. The industry will continue to initiate and support efforts to help the growth and health of the game. A number of viable programmes are in place to attract new and former players of all ages to the game. The World Golf Foundation, a non–profit entity supported by the major golf organisations, focuses on a variety of initiatives to grow and celebrate the game of golf. Key among these is The First Tee, established in 1997 with a goal to provide golf learning facilities and the experience to enable kids from every walk of life to play a game that teaches values for life and can be played for a lifetime. The First Tee successfully completed its Phase III, five–year business objectives (2006–2010), which were to:• Introduce golf and The First Tee Nine Core Values to 3. 5m young people (outcome = reached 4. 7m). • Deliver a consistent Life Skills Experience at each facility. • Grow The First Tee National School Programme to 140 communities across the country (outcome = reached 512 communities and 4, 000 schools). • Establish a Chapter in each of the 50 United States and have operations in 75% of the top 100 markets (outcome = all States and achieved 88%). The First Tee National School Programme now includes more than 3, 400 elementary schools where kids are introduced to the game through physical education programs. The First Tee also is reaching out to the children of military personnel by establishing programmes at 50 installations throughout the United States. The World Golf Foundations GOLF 20/20 initiative pursues programmes to ensure golfs continued growth and vitality. It has introduced Get Golf Ready, aimed at bringing thousands of adults into the game each year in a fast, fun, affordable way. It exceeded its target goal of 700 host facilities for 2009 by certifying more than 1, 150 facilities. The PGA of America, meanwhile, launched its Play Golf America initiative in 2004, and it continues to help the industry in terms of participation among new and existing golfers and bringing former golfers back to the game. The comprehensive industry–wide marketing campaign directs consumers to use PlayGolfAmerica. com, where golfers are linked with PGA and LPGA professionals to find fun and affordable programmes in their area. Over the past six years, Play Golf America has grown significantly in terms of programmes, resources and participation among host facilities and consumers. Millions of Americans continue to take advantage of free and low–cost Play Golf America programmes as they gain greater appreciation for golf as a fun sport to play with friends and the entire family. In 2009, participation rates remained strong and facilities continued to generate increased business and greater player retention by hosting programmes. In 2009, a record 7, 415 golf facilities played host to at least one Play Golf America programme. There were 648, 000 golfers who took part in group instruction taught by PGA and LPGA professionals, and 6. 7m golfers participated in leagues and outings. Additionally, 260, 000 consumers took part in Play Golf America national promotions and more than 100, 000 people were treated to complimentary golf experiences through consumer promotions. Continued interest in golf in the US also is evident through total viewership. The PGA TOUR draws with a cumulative audience second only to the National Football League. The return of Tiger Woods to a full schedule on the PGA TOUR should have a positive impact on total television viewership, as should the continued presence and success of established stars such as Phil Mickelson, Jim Furyk, Steve Stricker, Ernie Els, Retief Goosen and Luke Donald. Add to the mix an exciting crop of dynamic young players who have emerged like Dustin Johnson, Graeme McDowell, Rickie Fowler, Matt Kuchar, Hunter Mahan, Anthony Kim, Paul Casey, Bubba Watson and more, and the scene is set for some interesting rivalries between the new breed and establishment. The LPGA and Nationwide Tour also continue to make strides in introducing fresh young talent, including a pipeline to an ever–growing number of collegiate stars. The Champions Tour, meanwhile, continues to show the competitiveness of the games great players age 50 and over. And there are more developments that should bode well for the state of the game in coming years. One is the return of golf to the Olympic Games after an absence of more than 100 years. Golf will debut in Rio in 2016, and while the most significant impact is expected to be on countries where golf is a developing game, it nonetheless should have a positive effect as a whole in the US. So while the US slowly pulls itself from the extended impact of the Great Recession, and golf does the same, the future bodes well for the industry.

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