(Following is a report of an article I wrote for the IBGS site)
Unless you have been stuck on the back nine since last November, you are aware of the economy here in the states taking a nose dive. And if you really were stuck out on the course and have not been inside to catch any of the recent new…you are a very lucky person, or maybe not.
Yes, things are not looking good for the economy and it figures that what will have to take place to settle things down is businesses are going to HAVE to pull back on soft costs of operations if they plan on surviving…like executive salaries, stock dividends, and other very unpopular changes
This includes the golf industry. There is some room for adjustment in the golf industry that maybe some of the non-golf companies may want to consider making also.
The changes that have to be made in Golf are not going to be popular. Just writing about what changes will have to be made is not very popular. I expect many of the companies that are going to read this are going to not want to make the changes and debunk everything said so to substantiate that there is no need for a change.
On the most part, golf has gotten overly expensive. As a result, the majority of the golf population is going to evaluate golf’s value. And yes, the golf industry is not going to like what golfers decide to do…which is to not play golf.
Since I am in the golf marketing field I can tell you golf is going to be tough to market….not impossible, just very tough.
Prices for golf equipment, green fees and other items and services essential to playing a basic round of golf have all gone up. Sure the cost of manufacturing, operating and ensuring everything in golf is what caused the increase…so what else is new? The question becomes…
What does golf have to do to survive?
I have been pondering this question because nearly everyone who services the golf industry is going to be affected. And the answer is…golf is going to have to make some changes…mainly in reducing the prices that affect playing golf.
Yes, I know, if you are a golf facility you did not want to hear this and probably have a library of binders substantiating the costs and the pricing. But pricing golf out of the golf market is not going to get golfers to play golf no matter how much money they make. People playing golf is what makes the Golf Industry and golf economy keep moving.
Everything in the mainstream of the golf industry..club manufactures, country clubs, golf clubs, golf retail, golf wholesale, golf resorts…..all are going to have to reduce their pricing for products and services.
No longer will foreign manufacturers be able to mandate MSRP on their products…if they do, they probably will not enter the American market because nobody is going to buy it at that price…and no longer will wholesalers be able to go on a cost plus high percent. If the cost of wholesale is already too high before the markup it will not go to market. Golfers are just not going to spend money on things they absolutely do not need or want.
Yes, I know. That is a huge change in the golf industry but that is how much things have to change if golf is going to survive.
The good old boys of golf who have been heard saying in the back rooms of the top private golf clubs in this country that the price of golf at their facilities will remain high to keep out the people who cannot afford to play at their facilities will probably not change. That is they will probably not change, but there is a chance they will be pressured to change from the economy within the club. They will wish they had changed when after a few long hard months that extra cash flow coming from the golfer who would splurge to pay theirs over the top green fees all dry’s up after they evaluate the value of that experience. The same for the golf resorts and golf travel industry…all of them are going to have to drop their prices. It is just as simple as that.
Sure, there are going to be golf businesses go under…mostly those who are sitting on a highly mortgaged real estate. However, there will still be many mainstream golf businesses, who will be on the verge of collapse, that will still refuse to make the changes necessary to survive.
I really hate to say it but change is what the golf industry really needs to make to keep the golf industry going into the next generation.
The golf industry has got to keep golf affordable…not much else is going to matter until brighter days come again.