3Long-term Participation Trend Participants (MM)Since peaking in 2003, the total number of golf participants has declined by 4.8MM, or about 16%.Almost all of that loss has been from the “Core” golfer group which is down almost 24%, from 19MM to 14MM.Note: Studies since 2007 based on sample of n=40,000; prior to then samples were n=20,000. Sampling error: +/- 800KSource: NGF golf participation study is a calculated average of 1989 and 199133
4Participant Gains v. Losses Recessionary effectParticipants (MM)Losses have been driven more by diminished retention than the reduced attraction of new participants.Participant gains each year include new golfers who have never played (around 40%), as well as people who are returning to the game or giving it another try.Source: NGF golf participation study44
5Rounds played – 2012 (up 5.7% nationally) (% Change from previous year)New England(+3.2%)Mountain+7.0%W. N Central+7.6%E. N. Central+10.8%Pacific(+1.6%)Mid Atlantic(+10.1%)Extraordinary weather in 2012 drove rounds up by the largest increase since the turn of the century (5.7% nationally). Playable days were up 6.5% according to the PGA of America (data from PGA Performance Trak). An improving national economy almost certainly contributed to the increase in play.Only Louisiana and Mississippi saw rounds drop by more than 2% (-2.1% and -2.8%, respectively).There were particularly impressive gains (on average around 8% to 10%) in the north central and mid-Atlantic regions which helped lift the national numbers.(As a reminder, these results are from a rounds played research coalition led by Golf Datatech and supported by the PGA of America, the NGF and the NGCOA. Findings are based on rounds played reporting from over 4,000 golf facilities, most of which are contributing their data through the PGA’s Performance Trak reporting system.)So. Atlantic(+2.4%)+2.0% or higher+1.9% to -1.9%-2.0% or lowerSo. Central(+5.0%)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
6Rounds played – 2012(Public Facility Concentration 2012 U.S.)West N Central(+7.6%)East N Central(+10.8%)Highlighted area contains almost half (47%) of the nation’s public golf facilities.Mid Atlantic(+10.1%)The north central and mid-Atlantic regions of the country drove much of last year’s increase. This is because this area is home to 44% of all U.S. golf courses, and 47% of all public golf courses.Source: Golf Datatech National Rounds Played Report and NGF golf facility database.
7Rounds volumeTo put this increase in perspective, the rise represents about 27 million rounds and more than $.5 billion in additional revenue for the nation’s golf course operators.However, keep in mind that rounds played fell 11%, or about 55 million rounds, over the last ten years. So we recovered only about half of our losses; a move in the direction, but with a long way still to go.Rounds played for the first two months of 2013 are off about 6% compared to However, if we compare the first two months of 2013 to 2011, it shows we are UP by almost 7%. This illustrates what an extraordinary year 2012 was for favorable weather.
10Course openings 18-hole equivalents With only 14 openings recorded (18HEQ), 2012 replaces 2011 as the low point since accurate measurement began in 1985.Source: NGF Facility Tracking1010
11Course closures 18-hole equivalents 2012 Closures: PUBLIC: 139.0 (90%) Daily Fee: (84%)Municipal: 8.5 (6%)PRIVATE: 15.5 (10%)REAL ESTATE: 34.5 (22%, incl. both public and private)154.5 (18HEQ) closures in 2012.Source: NGF Facility Tracking1111
12Net change in supply 18-hole equivalents Net Change = openings minus closures (in 18-hole equivalents)The net change to supply in 2012 was -141 (18HEQs) or just under 1% of supply.Since 2006, there has been a cumulative supply reduction of 500 facilities (18HEQs).For perspective: during 20-year period prior to the correction, supply grew by 4,567 (18HEQs) or 44% of supply.Source: NGF Facility Tracking1212
14Rounds & golf course supply % Change in rounds (from previous year)(-3.0%)(-1.5%)(0.9%)(0.0%)(0.3%)(-0.6%)(-1.8%)(-0.6%)(-2.3%)(-2.5%)(5.7%)Rounds Per 18 hole equiv.Decade-12.1%Course Supply (18 hole equiv.)Prior to 2012, there was a steady dilution of demand at the facility level. For perspective, in there were 40,000 rounds per 18 HEQ.2012 saw a jump in rounds per 18HEQ, owing to a continued reduction in supply and a substantial hike in total rounds played.Decade +1.7%Source: NGF/Golf Datatech1414
16Continued contraction in range supply 2012We have seen very little change in the range size proportions since 2000:There was a net reduction of 32 stand-alone ranges in 2012, or roughly 3% of supply. Unlike golf courses, range supply has dropped by 36% since 2000.16
17Retail supply 5-year trend There was a net increase of 11 golf specialty stores in 2012 – approximately 1% of supply.Total square footage is estimated to have increased by 3.6% (from 8.2 to 8.5 million square feet) owing to the replacement of smaller stores by larger ones.17
18Retail – 2012 snapshot 1,078 Doors 8.5 mm Sq. Ft. National chains accounted for 41% of doors, but over 64% of space in 2012.Independents still comprise 45% of doors, but only 20% of retail space.18
20Domestic – club shipments Golf equipment sales continued to recover in 2012 from their trough in 2009.Wholesale shipments – in both units and dollars – were up.NGF Indices rose from 95 to 102, returning sales back to 2002 levels when the index was started, but still below the peaks of 2007.Year-to-date (thru March 2013) club units are up 1% and dollars are up 9%.20
21Domestic – ball shipments Premium ball market has been holding relatively steady over the past few years – off its peak in 2006.The failure of the indices to rise in 2012, despite the sharp rise in rounds played, is thought to be due to two factors:Growth in the purchase of non-premium balls not covered in the reportIncrease in purchases of re-conditioned ballsYear-to-date (thru March 2013) ball units are down 6% and dollars are down 2%.21
22Facility maintenance budget index Higher-end facility maintenance budgets have been less affected by recession and industry contraction than average and lower-end facilities.Higher-end facilities continued to slowly add to their budgets in 2012, while mid- and lower-end facilities continued with their belts tight.(1) Excluding capital expenditures and water22
23Turf maintenance equipment Purchase intent index tracks superintendent plans to purchase various types of maintenance equipment over next 12-month period.Index has dropped significantly over the past 6 years, bottoming out at 52 in early 2011.Mid and late-season 2012 measures showed a modest improvement to 64.The Index value of 100 is based on average intent to purchase 15 different types of maintenance equipment in 2005.YE = Year EndMY = Mid Year23
25Consumer Confidence Index 90 = normalIndex currently stands at 76.2Despite the aura of uncertainty, consumer confidence is very slowly coming back.The Consumer Confidence Index (Conference Board) currently stands at (May 2013).“A big drop from December 2012 was blamed in part on the increase in Social Security taxes that took effect on Jan. 1. The increase will mean a household earning $50,000 a year will pay about $1,000 more this year in taxes.”The index bottomed out in early 2009 at 25 and has since increased; however, an index value of 90 is considered normal for non-recessionary periods.Through May 2013Source: The Conference Board25
26Consumer spending May -13 $92 Consumer spending, which fuels about two-thirds of the nation’s gross domestic output, has been on the rise of late.According to Gallup:Gallup tracks daily the average dollar amount Americans report spending or charging on a daily basis, not counting the purchase of a home, motor vehicle, or normal household bills. Results are based on telephone interviews with approximately 1,500 national adults; Margin of error is ±3 percentage points.Source: Gallup
27[Index numbers, 2005=100] Seasonally adjusted Consumer Spending ImprovingReal Personal Consumption Expenditure Index[Index numbers, 2005=100] Seasonally adjustedAnother measure of consumer spending comes from the Bureau of Economic Analysis.Source: Bureau of Economic Analysis27
28Case-Shiller Home Value Index (year 2000 as 100) Recessionary Impact on Net WorthS&P 500 and Case-Shiller Home Value IndicesS&P 500 IndexCase-Shiller Home Value Index (year 2000 as 100)Like most Americans, golfers were hit with a “double whammy” in 2007 and Personal net worth took the biggest hit in generations with the onset of the Great Recession and huge drops in the stock market and home values.Since then, investors who stayed put have recouped their stock market losses, and the major stock indices continue to set new highs in 2013.Home values are also rising, although remain well shy of where they were before the real estate bubble burst.Source: S&P 500 / Case Shiller28
29Overall takeawaysGolf continues to slowly recover from the effects of the Great RecessionOutlook for 2013 is modestly – and cautiously– optimisticGolf’s economic recovery remains dependent on the recovery of the overall economy and continued increases in consumer confidence and spendingGolf continues to slowly recover from the recession of 2008/ The recovery has been very modest to date.The outlook for 2013 is for modest sales growth in golf consumer products and services, and golf course equipment and supplies. Rounds played are most likely to drop somewhat from 2012 levels, as the number of play days are unlikely to match those of last year, but overall course revenues should not be as affected. Course closures will continue to significantly outpace openings, resulting in another year of supply correction with negative net growth.Continued economic uncertainty and anemic U.S. economic growth will continue to provide a headwind against rising consumer confidence and spending. However, both are likely to continue to slowly rise provided there are no major disruptive events.