Thanks to recent modernisations of the sport’s image, golf courses are coming back into popularity; for play, for investment and for sale.
Efforts to move away from the antiquated, boys club style approach to golfing has opened up new opportunities for growth and diversification, and encouraged many back into the game.
Recent data from Sports research company SMS INC has shown that after a positive end to 2016, the average number of rounds played increased by 9 per cent in the first quarter 2017 when compared to the same period in 2016. Overall, the average number of rounds played for this period was at its highest since 2012, according to SMS.
A positive sign in the reversal of golf’s fortunes, but only a very recent one.
Research from SMS also revealed that the sport had lost more than 10 million players worldwide since 2008, with the years between 2012 and 2016 being particularly critical.
Last year, the so-called "most beautiful golf course in the world", North Wales' Dolgellau Golf Club, was put up for sale at the shockingly low price of just under £790,000 after struggling to find a buyer. The club was only one of many who have seen their doors close in recent years, amid a dramatic drop in the number of rounds of golf being played and a failure for the sport to engage a new demographic.
Just a few years ago, Dolgellau golf club had the highest percentage of single figure golfers than most other clubs, but declining membership rates marked the beginning of the end for the venue.
Despite a popular ladies and senior section who played regularly, they struggled to bring in enough new members to turn a profit; meaning when older customers were no longer physically able to keep playing, there was no one new to replace them.
A similar story was seen at the 18-hole municipal North Inch in Scotland, thought by some to be the world's oldest golf venue, which was threatened with closure due to heavy costs and a lack of new players.
This club, and many others, found to their detriment that the market was changing while they were not.
In response to this, many clubs have begun to diversify; opening restaurants, making the venues more family friendly and changing their social media strategies to appeal to younger generations.
Strict dress codes, technology bans and gender restrictions have long been keeping golf clubs stuck in the past, but consultants hired by the sport's many bodies are now encouraging a change in approach in order to safeguard their futures.
Steve Mona, chief executive of the World Golf Foundation, said clubs have to urgently adapt to the demands of younger people to ensure the longevity of the sport, as decisions by the world’s two biggest sports brands – Nike and Adidas – to pull out of golf equipment raised fears about the game's long-term future.
Mona said that although traditionalists may prickle at the idea of "selfies and beers on the green", it's necessary to appeal to young people and minorities who are the consumers that are currently being alienated by stuffy codes and outdated ideals.
“It’s a tricky problem. Someone like me wouldn’t think of engaging in social media on the course, I’d only be thinking of the next shot. But young people want to be on Facebook and Instagram between shots.”
Golf, first played in the 15th century, certainly isn't known for being 'trendy'. Scotland’s famous Royal and Ancient Golf Club of St Andrews only admitted its first female members last year. But by embracing millennials, golf courses are finally finding their salvation.
And many already have. Mona insists that the headlines of 'golf in crisis' are overblown, and that courses are beginning to see substantial profits from welcoming this new segment of clientele.
In fact, golf's inclusion in the Rio 2016 Olympics (for the first time since St Louis 1904) helped to spark a renewed interest in the game among younger viewers, and overall, the sport remains highly profitable.
According to an independent report published by Sheffield Hallam University’s Sport Industry Research Centre, UK golfers spend around £4 billion per year, accounting for 14 per cent of all consumer spending on sport. And more than half of consumer spending on golf, £2.2 billion, was channeled through the UK’s near 3,000 golf clubs.
In total, after accounting for indirect and induced economic impact affects, the turnover of the UK golf industry was estimated at £10.3 billion for 2014.
So how can someone looking to buy a business benefit from this?
When looking to purchase a golf course, the first point of any developer or purchaser of a golf course is to get clear on the objective.
For example, will the golf course be profitable enough to function as a standalone purchase, or will it have to be supported by a hotel or housing development?
Golf courses come in an array of variations and can be designed, built and operated quite differently. Some require more maintenance than others, whilst there are regional variances depending on grass types and climate for items like seed, chemicals and fertilisers. Many courses are the main attraction, while others rely on the financial support of spas or hotels to bolster their revenues.
The most important thing to understand for any would-be buyer is where the value is lost and gained, and then to maximise the gain areas while minimising the losses.
Only when a buyer has the answers to these questions, an idea of which areas need to modernised, and completed a rigorous due diligence exercise should he or she consider a deal.
The golf industry is at a turning point, and now is the perfect time to get ahead of the game and drive the competition off the green.
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