- April 15, 2024
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When the price of golf rises by $1, the average golfer plays 1.8% fewer rounds, according to a 2001 study by published by Sportometrics, a golf data aggregator.
This means golfers are sensitive to price changes, and as huge capital and land investments, golf courses can get pummeled during recessions.
So large golf course holding companies are buying up distressed golf courses to take advantage of depressed prices. And by entering more markets, they take advantage of economies of scale and geographical diversity.
Companies like ClubLink Enterprises Limited, a Canadian golf course operator with $171.16 million (U.S.) in revenues for the first three quarters of 2011, began buying Florida courses in mid-2010.
Bill Place, president and owner of Tampa Bay's Ace Golf, oversees three golf courses and two driving ranges in the Bay area. He tells Coffee Talk there's still a niche in the market for the local entrepreneur. “We're still going to see some consolidation as more courses fail,” he says. “But the downward trend in rounds played doesn't look like the hockey stick they predicted it would.”
Place's strategy to buffer business comes from Ireland, the neighbor of golf's birth country. He has spent $2 million on renovations to his newly acquired courses, which include an Irish pub converted from a card room. “It's hard to make money on golf alone,” he explains. “And who plays cards anymore?”
After building cash reserves since he began running driving ranges in 1993, Place says he can acquire a golf course and renovate it with little debt.
Place is also trying to attract younger players, which he says has been more difficult lately. “It's a sport that takes skill and time and people want things quick and easy,” he tells Coffee Talk.
