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Rough Economic Times for Golf


The playing skills of Hall of Fame golfer Tom Kite can solve many a challenge on the golf course.

But he wonders if his sport's current financial challenges could be the courses themselves. Basically, in an economic era where pinching pennies is in -- golf has an expense problem. The game's equipment and fees are not cheap and simple fixes aren't on the horizon. 

According to the National Golf Foundation, 2012 started with 15,753 courses in the U.S -- down 299 from 2005. NGF estimates that 25.7 million Americans were considered golfers last year -- down 4.3 million from 2005. NGF says 463 million rounds were played last year -- that's down from 500 million in 2005 and 518 million in 2000.

By some measures, golf's popularity is still high. But where it really counts for the long run -- the number of everyday players, especially new and younger ones -- the picture is bleak.

"It's a little perplexing," Kite said recently at the Toshiba Classic, a stop on the professional Champions Tour in Newport Beach. "It's been difficult to build a base."

Kite wonders if one cure could be shrinking the size of the courses. He says golf could still be entertaining and challenging for everyday players on smaller, shorter courses that are not built to a pro golfer's specs.

Shaving, say, 1,000 yards in length of a course -- perhaps down to around 6,500 yards -- should suffice for most amateur golfers, Kite says. By Kite's math, that could save a course builder maybe 100 acres in land needed to build -- a hefty savings of both initial expenses of construction as well as long-term maintenance.

"I'm not sure it would sell," says Kite of his idea, noting many everyday players' desire to pound a ball far like a pro. "I don't have all the answers for sure."


Golf's overall demographics look like a bad shot into the rough -- and that's meant that golf as a real estate play is diminished nationwide.

According to the National Golf Foundation, 2012 started with 15,753 courses in the U.S -- down 299 from 2005. (By the way, California is the nation's No.2 golfing state with 921 courses, trailing only Florida at 1,051.) In 2011 alone, the roster of American courses shrunk by 157.

Why? Look at who's staying at home.

NGF estimates that 25.7 million Americans were considered golfers last year -- that's aged 6 and older. That's down 4.3 million from 2005.

And the amount of golf played -- think, greens fees -- is off, too. NGF says 463 million rounds were played last year -- that's down from 500 million in 2005 and 518 million in 2000.

Once, new homes were at the course. Now, new homes may be built on the old course.

Real estate consultant Mark Boud from Irvine points at on often-heard problem when it comes to golf: costs.

"Golf was so dramatically overbuilt in the 1970s, 1980s and 1990s that I believe we'll continue to see a conversion of older public courses to residential," Boud says.

NGF stats show that 3,206 golf courses were added nationwide to the game between 1990 and 2005 – that's 25 percent growth. Often in that boom, a nearby golf course was a critical sales tool for homebuilders. Today, golf is largely out as a housing theme because developers have learned that golf courses are an expensive and narrow way to keep a new housing community green.

"Lakes, walking paths and central amenities are used by all residents, as opposed to only about 15 percent to 20 percent of residents" for golfing, Boud says.

While builders could sell golf-course view homes at a steep premium, Boud says that "when costs are considered, open spaces and trails often overtake golf in terms of benefiting the master plan, and a lake -- which is relatively cheap and easy to maintain -- beats golf in view premiums. Though obviously, fewer homes tend to benefit from the view because a lake is generally much smaller than a course."


One group thinking that real estate isn't the game's biggest challenge is equipment makers such as Greg Hopkins from Newport Beach.

The CEO of Cleveland Golf and Srixon thinks the golf's purists -- namely, the United States Golf Association, the game's defacto rules and equipment regulator -- are being too strict about the game's gear.

Golf club technology -- in particular, improvements in the 1990s -- changed the game both for all players in terms of driving power and accuracy. The ability for hackers to hit balls more like the pros helped drive the game's popularity surge height a decade or more ago.

Now, Hopkins thinks golf's rule makers have become too conservative -- at the absolutely wrong time.

To Hopkins, the game's playing popularity suffers because of what he sees as misplaced fears that further advancements in equipment will allow professional players to unfairly rewrite the record books. While a noble concept for the professional game, Hopkins argues that such design limits on equipment advances keep the already challenging sport too difficult for many novice players.

And Hopkins admits equipment isn't the sport's only challenge.

This isn't a cheap hobby -- both the cost of equipment plus the daily greens fee a player may incur. That was a bad formula for the prolonged economic downturn. And when families are struggling to meet bills, Hopkins admits "It's hard for a player to tell the spouse they need to buy a brand-new $300 driver."

So Cleveland/Srixon's sales have suffered, forcing job cuts at the company. Hopkins speculates golfers are simply holding on to equipment longer to stretch their golfing budgets.

Most worrisome is a drop in sales in the mid-priced equipment. That's the gear primarily used by a key demographic for the sport's future -- the golfer who's raised his interest level toward becoming a frequent player.

"The game is at a crossroads," Hopkins says. "We need to get a consensus of what's the best way to grow the number of golfers."


Golf's slump -- like many trends in this curious economy -- has its hot and cold spots, says Steve Friedlander, manager of real estate giant Irvine Co.'s golf operations.

He oversees two upper-scale courses -- Oak Creek in Irvine (where greens fees runs $165) and Pelican Hills in Newport Coast ($280 a round) -- that are not private clubs, rather open to the public.

"Some pockets are thriving, others are not doing so well," says Friedlander, who'd put his courses -- and Orange County overall -- in the thriving category. (Note: It probably doesn't hurt that Pelican Hill was recently named world's top golf course by Conde Nast magazine.)

While Friedlander wouldn't give any fiscal details of the Irvine Co. golf endeavors, he did acknowledge golf's rocky ride in the recession did hit locally. To his eye, golf peaked in the mid-1990s, and then had another resurgence that didn't have the energy outrun the last decade's economic downturn.

"Even the wealthy started holding back and were not playing," Friedlander says.

But now, Friedlander says, the Irvine Co. courses are performing "back at pre-recession levels" -- and not just in terms of greens fees but with rising dining revenues and pro shop gear and apparel sales, too.

Still, Friedlander knows the game overall needs firmer footing. The golf-course building boom that ran well past the game's pinnacle of playing popularity only "diluted the product." He says the closing of courses in certain markets is probably best in the long haul for the sport.

"We need ways to get people to the golf course, have more fun and enjoy the game," he says. "Hopefully, then, we get them hooked for life."

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