Golf Business Trends 2012 and The Opportunity for Growth Presented to: Golf Summit of Washington
Feb 01, 2016
Golf Business Trends 2012and
The Opportunity for Growth
Presented to:
Golf Summit of Washington
2
• NGF: Then and Now
• Golf Business Trends 2012
• Opportunity for Growth
NGF: Then and Now
4
NGF at 77
Herb and Joe Graffis
Golfdom – Est. 1927
Golfing – Est. 1933
Founding Members:• Wilson• Spalding• MacGregor• H&B• Worthington Ball• U.S. Rubber
NGF Publication – Feb. 1955
5
NGF Today
3,500 Members•Daily Fee & Municipal Golf Courses•Private Clubs•Management companies•Golf businesses (equipment manufacturers, turf products, associations, etc.) NGF Board of Directors
6
Contributing to the Growth of Golf
Industry Research & Strategic
Perspective
Conferences & Education
Support for Golf’s Major Initiatives &
Associations
GOLF 2.0
7
NGF Facility Membership
Only $225/year
We want YOU!
Golf Business Trends 2012
9
Rounds Played
10
Rounds Played – 2012 YTD (Up 5.7% Nationally)
+2.0% or higher+1.9% to -1.9%-2.0% or lower
(% Change from previous year through December)
New England (+3.2%)
Mid Atlantic(+10.1%)
South Atlantic(+2.4%)
South Central(+5.0%)
Pacific(+1.6%)
Mountain(+7.0%)
West N Central(+7.6%)
East N Central
(+10.8%)
Source: Golf Datatech National Rounds Played Report in cooperation with PGA Performance Trak and the NGF.Based on a sample of approximately 4,000 reporting facilities
11
Rounds Played – 2012 YTD
(Public Facility Concentration 2012 U.S.)
Mid Atlantic(+10.1%)
West N Central(+7.6%) East N
Central(+10.8%)
Source: Golf Datatech National Rounds Played Report and NGF golf facility database.
(The highlighted area represents 47% of the
nation’s public golf facilities. Rounds are up 9% in this
part of the country.
12
Factors Underlying Jump in Rounds
• Weather! PGA Performance Trak reports playable
days up over 6.5% nationally
• Consumer Confidence and Spending Consumer confidence & spending have
been gradually rising as the recession driven “hunker down” mentality starts to fade
13
Rounds Volume
Source: Golf Datatech National Rounds Played Report
% Change Year Over Year
5.7%
14
Golf Participation
15
Short Term Participant Trend
Participants (MM)
Core Occasional TOTAL1-yr Change -2.7% 0.0% -1.5%5-yr Change -17.7% -8.1% -13.8%30.0 29.8 29.5 28.6
27.126.1 25.7
44%
56%
Source: NGF golf participation study
16
Golf Course Development
17
Number of facilities
Source: NGF
Growth of Golf Facilities
Private
Daily Fee
Municipal
18
Net Change in Supply
Net Change = new course openings minus permanent closures (18HEQ), not factoring in courses closing for, or reopening from, renovations
Source: NGF Facility Tracking
International Golf Course Supply
199 Golfing Countries
North America 18,41054%
TOTAL 33,331
South America 6032%
Oceania 2,0146%
Asia 4,42513%
Europe 7,01421%
Africa 8653%
20
Looking Ahead
21
Consumer Confidence Index
Source: The Conference Board
through January 2013Index currently stands at 58.6
90 = Normal
22Source: S&P 500 / Case-Shiller
Recessionary Impact on Net Worth
S&P 500 and Case-Shiller Home Value Indices
S&P 500 Index (year 2000 as 100)
Case-Shiller Home Value Index (year 2000 as 100)
23Source: Bureau of Economic Analysis – Updated as of Dec. 2012
Consumer Spending Improving
Real Personal Consumption Expenditure Index
[Index numbers, 2005=100] Seasonally
adjusted
The Opportunity For Growth
- Latent Demand
- Retention
- Building Commitment
25
Definition: People who express an interest in playing golf, but have not yet started.
Latent Demand
Source: NGF/Synovate
HOW INTERESTED: Very 6 MMSomewhat 19 MMA Little 47 MM
Percent of non-golfing population over age 6
Q: How interested are you in playing golf now?
26
Latent Demand Segments
Source: NGF/Synovate
Beginners (Never Played)
Those With Some Experience (Never Committed)1
Former Committed Golfers2
(1) Classified themselves as “Not” or “OK” (2) Classified themselves as “Fun”, “Hooked” or “Nut”
12
9
4
25
LatentVery/
Somewhat Interested
47%
37%
16%
100%
Percent
OfLatent
27
Demographics of Latent Demand
Source: NGF/Synovate
Golf’s latent demand skews:
• Female (48% versus 19% of all golfers)
• Average Income <$50K (44% versus 23% of all golfers)
• Younger – Under 30(43% versus 28% of all golfers)
28
What’s Stopping Them from Playing
Source: NGF/Synovate
Main reasons they haven’t started playing golf yet/again
*NOTE: Asked only of those who have never played golf
I’m concerned about the cost
Not enough time – I’m pretty busy right now
Not really sure how to get started*
There’s nothing stopping me – haven’t gotten around to it
I don’t have anyone to play with
Nobody has suggested it or invited me
29
Lapsed Participants
Source: NGF/Synovate
Definition: People age 18-69 who have not played in the past two years, but played at some point in the past
Lapsed Participants 21.5
Million
Lifetime golf experience of Nots and OKs:
Played 1-2: 31%Played 3-9: 42%Played 10+: 27%
30
Demographics of Lapsed Participants
Source: NGF/Synovate
Lapsed participants skew:
• Female (41% versus 19% of all golfers)
• Average Income <$50K (38% versus 23% of all golfers)
31
What drove them away?
Source: NGF/Synovate
• Difficulty
• Embarrassment
• Stuffiness
• Intimidation
• Slow play
• Rude golfers
Aside from “time” and “money” (both of which continue to be cited as the first and second reason respectively), here are the main issues that drive participants away:
Understanding Commitment to Golf
From the “Nuts” to the “Nots”
33
*Average among those who keep score (79% of occasional; 95% of core)
Source: NGF/Synovate
25.7 MillionGolfers
14.4 MCORE
(8+ Rounds)
11.3 MOCCASIONAL(1-7 Rounds)
• 6% of Rounds
• 7% of Spend
• 94% of Rounds
• 93% of Spend
Traditional View
34
I’m a “golf nut,” I love the game and it’s my favorite activity
I’m “hooked,” it’s one of my favorite things to do
I’m a “casual” golfer – it’s one of several ways I like to spend my recreational time
Golf is OK, but I most often choose to do something else with my recreational time
I don’t really consider myself a golfer, I play rarely and usually only at the urging of others
Commitment Levels
NUTS
HOOKED
CASUAL
FRINGE
NOTS
35Source: NGF/Synovate
25.7 MillionGolfers
Impact of Commitment
NOTS FRINGECASUA
LHOOKED NUTS
Golfers (MM)
2.3 3.3 11.3 6.2 2.6
Rounds 2% 4% 29% 41% 24%
Spend 3% 3% 32% 40% 22%
Rounds/Year 3 5 11 29 41
Avg Score 107 107 103 95 94
RetentionLikelihood*
38% 73% 93% 98% 97%
* Percent who say they will be playing in 2 years (Top 2 Box) unless physically unable
36Source: NGF/Synovate
Frequency vs. Commitment Segments
Commitment Category
CORE(8+ Rounds)
OCCASIONAL(1-7 Rounds)
Commitment Category
CasualCasual
Fringe
Fringe
37
Attraction to the Game
Source: NGF/Synovate
% mentioned as “one of the main reasons I like golf”
Reasons golfers like golf:
Nuts Hooked Casual Fringe NotsThe opportunity to spend time outdoors (nature, fresh air, etc) 59% 64% 54% 40% 47% 54%The social aspect – spending time with friends & family doing something we enjoy 55% 52% 46% 30% 37% 46%Ball striking – the feeling you get when you hit a great shot 60% 58% 40% 28% 15% 43%The challenge of the game – striving to improve – it’s never-ending 77% 62% 36% 17% 19% 42%The exercise – getting out for a good walk – staying active 44% 49% 44% 31% 33% 42%Stress relief – getting away from my every day pressures – an escape 47% 42% 36% 18% 20% 34%Golf courses – the variety of designs, scenery, landscape, etc. 54% 51% 28% 19% 21% 34%The values of the game (honesty, integrity, sportsmanship, etc.) 55% 33% 23% 7% 12% 25%The mental game – thinking my way around the course 52% 34% 23% 11% 8% 25%The competition – competing – the winning and losing 53% 26% 13% 6% 5% 18%Keeping score – measuring my performance against the course/previous rounds 47% 30% 10% 7% 5% 17%The game’s history & tradition - it’s one of the oldest sports in the world 42% 21% 9% 7% 5% 14%Practicing – spending time on the range or practice facility working on my game 35% 22% 9% 5% 6% 14%Opportunity to spend time with business clients/colleagues away from the offi ce 23% 11% 12% 10% 10% 12%
38
Demographics
Source: NGF/Synovate
Not Fringe Casual Hooked Nuts
Male 7% 11% 43% 28% 11% 100%
Female 17% 20% 44% 13% 6% 100%
Average Age 39 37 44 50 46
HH Income (000) $73 $92 $86 $84 $88
College graduate 64% 68% 61% 65% 64%
Married/ living with partner 73% 74% 69% 72% 67%
Have Kids at home 37% 35% 34% 26% 25%
39
Completely Agree
The Underpinnings of Commitment
Source: NGF/Synovate
Correlation (r)(with
Commitment)
.46
.42
.42
.42
(5 on a 5 point scale)
Hooked
Casual
Fringe
COMPETENCE
COMFORT
40
41
Competence & Comfort Lead to Retention
“Comfort” Index by Retention Likelihood*
* Likelihood to be playing 2 years from now
Competence/Comfort factors scored and indexed to Hooked Golfers (100)
Source: NGF/Synovate
42
Could cause them to “walk”
from your COURSE
• Embarrassment
• Intimidation
• Stuffiness
• Rude golfers
What Drives People Away?
• Slow play
• Rude golfers
• Impolite staff
• Stuffiness
• Slow play
• Rude golfers
• Embarrassment
• Stuffiness
Could cause them to “walk” from
the GAME
Source: NGF/Synovate
NOT & FRINGE
CASUALHOOKED &
NUTS
Probablyreducing
frequency
43
It Comes Down to Having Fun
Q. All things considered, how much FUN is golf for you? (0-10 Scale; 10 = Really Fun)
FU
N
COMMITMENT
% Top 3 Box (8-10)
Source: NGF/Synovate
44
… and Perceiving Value
Fun Rating
Valu
e R
ati
ng
Source: NGF/Synovate
45
The Equation
IF F = C
AND C = PV
THEN F = PV
ERGO F x PV = C2
F = FunC = CommitmentPV = Perceived Value
46
Commitment = Prioritization
COMMITMENT
AVERAGE
Avg. Income $73K $92K $86K $84K $88KSource: NGF/Synovate
47
Key Findings
• More committed golfers than implied by core and occasional golfer segmentation
• Plenty of latent demand
• Deepen engagement by: Increasing competence and managing expectations
Increasing comfort around the course and other golfers
• More FUN, leads to deeper commitment, increased retention, higher perceived value, rounds and spending
• Time and money are not the problem!