Public Golf Courses

SIC 7992

Companies in this industry

Industry report:

This industry includes establishments primarily engaged in the operation of golf courses open to the general public on a contract or fee basis, commonly called a greens fee. Membership golf and country clubs are classified in SIC 7997: Membership Sports and Recreation Clubs. Miniature golf courses and golf driving ranges are classified in SIC 7999: Amusement and Recreation Services, Not Elsewhere Classified.

By definition, public golf courses are open to the public on a contract or fee basis, a pay-to-play format commonly called a greens fee. There were over 11,000 golf courses in the United States in the early 2010s. About half were public courses, generated revenues in excess of $4 billion. Generally, green fees at a public course are less expensive than private country clubs, which often offer additional amenities. However, many public courses rank at the top in their local area, region, state, and nationally. In particular, the Professional Golf Association's U.S. Open has been held at four public courses: Torrey Pines South and Pebble Beach Golf Links, both in California; Pinehurst No. 2, in North Carolina; and Bethpage Black, in New York.

Golf experienced a boom during the second half of the 1990s, due in large part to a surging economy. Golf equipment typically costs several hundred dollars (most of which is an investment in golf clubs that can be used for several years). In 2008 golfers spent $3.5 billion on equipment. The group of golfers aged 18 and older who played at least eight times per year was estimated at 12.5 million adults and were responsible for 91 percent of rounds played and 87 percent of golf-related spending. About 10.2 million of them were male and 2.3 million female. Adults playing fewer than eight times per year were estimated to be 15.5 million. The rise to popularity and prominence of golfer Tiger Woods, who turned professional in 1996 and won his first professional major golf championship in April 1997, also contributed to the boom in golf in the 1990s (although Woods's popularity later fell along with his reputation in the personal scandal he faced in the 2000s). Michigan had the most public golf courses in 2008 with 603, followed by California with 526, Ohio with 482, and Florida with 436.

The boom in golf in the 1990s slowed at the beginning of the twenty-first century. The number of new public and private courses had swelled to over 300 annually from 1995 to 2000. After peaking at 398 in 2000, the number of new courses fell to 284 in 2001 and 171 in 2003. In 2004 there were 150.5 course openings and 62.5 verified closures (in 18-hole equivalents), for a net gain of 88 courses, or a net increase of approximately 0.5 percent. A leveling off of golfers in the first decade of the 2000s and the abundance of courses left course owners competing rather than enjoying overflows of players. In 1970 most estimates placed the number of golfers in the United States at approximately 11 million, and by 1980 that number had increased to more than 15 million. During the 1990s, annual estimates ranged from 25 to nearly 28 million golfers. By contrast, fewer rounds of golf were played each year from 2000 to 2004. About 55 percent of the 25 to 28 million golfers at mid-decade played occasionally, or fewer than eight times per year.

During the first decade of the 2000s, the golf industry reached record highs in terms of prize money for professional events, equipment sales, and rounds played. However, in the wake of the recession at the end of the first decade of the 2000s, the golfing industry stagnated somewhat. Rounds of golf either plateaued or declined, as did television viewing. The Sporting Goods Association's 2008 survey reported the number of golfers dropped more than 7 percent between 2003 and 2007. In 2008 the numbers rebounded slightly to 25.6 million Americans who played at least one round of golf during the year. In 2010 that figure dropped another 2 percent from the previous year to 21.9 million. Although enthusiasm for golf remained high, lack of players and a difficult credit environment led to course closures around the country. Particularly hard hit were resort destinations, such as Myrtle Beach, South Carolina, as more consumers cut back and stayed closer to home for vacations. Public courses, which often run on narrow margins, also felt the pressure to keep their courses running.

According to a study commissioned by Golf Digest and BusinessWeek, although greens fees for peak playing times had risen with the price of inflation, special rated times, such as weekday and twilight hours when the majority of golf is played, rose 33 percent during the middle of the first decade of the 2000s. Therefore, the price increased rapidly in the face of stagnant demand. For their part, courses were faced with skyrocketing rising fuel and fertilizer costs. In the second half of the first decade of the 2000s, the number of public courses fell 2.5 percent due primarily to economic pressures.

As the economy began to recover from the economic recession that began at the end of the first decade of the 2000s, business at public golf courses picked up again, and the industry outlook was positive. According to a 2012 IBISWorld report, "As more baby boomers reach retirement and demand for golfing increases, the industry will experience modest growth." Competition from other operators and other outdoor sports, however, were expected to have significant effects. In addition, the price of golfing, even at public courses, continued to rise, although this varied across the country and across courses. For example, among Golf Digest's 100 best public courses in 2011, the lowest peak season weekend green fee was $62 and the highest was $500. The average for the top 100 public courses was $193.

The top five public golf courses in 2011 as ranked by Golf Digest were Pebble Beach (California), Pacific Dunes (Oregon), Whistling Straits (Wisconsin), The Ocean Course (South Carolina), and Bandon Dunes (Oregon). Although several courses in the top 100 were located in other parts of the country, the 25% of golf courses in the United States were in the Southeast and about 21 percent were in the Great Lakes region.

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