Golf Business Update 2012
and
The Opportunity for Growth
Rounds Played
2
Rounds Played – 2012 YTD (Up 5.7% Nationally)
(% Change from previous year through December)
Mountain
(+7.0%)
Pacific
(+1.6%)
West N Central
(+7.6%)
New England
(+3.2%)
East N Central
(+10.8%)
Mid Atlantic
(+10.1%)
South Atlantic
(+2.4%)
+2.0% or higher
+1.9% to -1.9%
-2.0% or lower
South 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
3
Factors Underlying Jump in Rounds
• Weather!
 PGA Performance Trak reports playable days up
over 6.5% nationally
• Consumer Confidence and Spending
 Consumer confidence & spending have been
gradually rising as the recession driven “hunker
down” mentality starts to fade
4
Rounds Volume
% Change Year Over Year
5.7%
Source: Golf Datatech National Rounds Played Report
5
Golf Participation
6
Golf Participation in Canada
17
16
16
15
15
16
15
15.9
15.3
15
15.3
14.4
14
13.3
13
13.4
13
13
13.3
12
11.3
11
10
9
8
7
2004
2005
2006
2007
BC
Canada
2008
2009
2010
2011
Linear (BC)
7
Short Term Participant Trend
Participants (MM)
29.8
29.5
28.6
1-yr Change
5-yr Change
27.1
26.1
Occasional
0.0%
-8.1%
TOTAL
-1.5%
-13.8%
25.7
56%
44%
30.0
Core
-2.7%
-17.7%
Source: NGF golf participation study
8
Core Golfers in Canada
4.9
5.2
5.5
4.4
10+ times
5.3
3 - 9 times
3.8
6.3
6.6
Ontario
Alberta
3.6
3.6
5.3
5.3
BC
Canada
1 -2 times
9
Golf Course Development
10
Growth of Golf Facilities
Number of
facilities
Private
Daily Fee
Municipal
Source: NGF
11
Net Change in Supply
Net Change = new course
openings minus permanent
closures (18HEQ), not factoring in
courses closing for, or reopening
from, renovations
Source: NGF Facility Tracking
12
International Golf Course Supply
Europe
7,014
21%
North
America
18,410
54%
South America
603
2%
Asia
4,425
13%
Africa
865
3%
TOTAL 33,331
199 Golfing
Countries
Oceania
2,014
6%
Looking Ahead
14
Consumer Confidence Index
90 = Normal
Index currently stands at 58.6
through January 2013
Source: The Conference Board
15
Consumer Spending Improving
Real Personal Consumption Expenditure Index
[Index numbers, 2005=100]
Seasonally adjusted
Source: Bureau of Economic Analysis - Last Revised on: October 26, 2012
16
The Opportunity For Growth
Latent Demand
Definition: People who express an interest in playing golf, but
have not yet started.
HOW INTERESTED:
Very
6 MM
Somewhat
19 MM
A Little
47 MM
Q: How interested are you in playing golf now?
Percent of non-golfing population over age 6
Source: NGF/Synovate
18
Latent Demand Segments
Very/Somewhat
Interested
Percent
Of
Latent
Beginners (Never Played)
12
47%
Those With Some Experience
(Never Committed)1
9
37%
Former Committed Golfers2
4
16%
25
100%
Latent
(1) Classified themselves as “Not” or “OK” (2) Classified themselves as “Fun”, “Hooked” or “Nut”
Source: NGF/Synovate
19
Demographics of Latent Demand
Golf’s latent demand skews:
• Female
(48% versus 19% of all golfers)
• Average Income <$50K
(44% versus 23% of all golfers)
• Younger – Under 30
(43% versus 28% of all golfers)
Source: NGF/Synovate
20
Lapsed Participants
Definition: People age 18-69 who have not played in the past two years,
but played at some point in the past
Lapsed Participants
21.5 Million
Lifetime golf
experience of
Nots and OKs:
Played 1-2: 31%
Played 3-9: 42%
Played 10+: 27%
Source: NGF/Synovate
21
Demographics of Lapsed Participants
Lapsed participants skew:
• Female
(41% versus 19% of all golfers)
• Average Income <$50K
(38% versus 23% of all golfers)
Source: NGF/Synovate
22
Understanding Commitment to Golf
From the “Nuts” to the “Nots”
Traditional View
25.7 Million
Golfers
11.3 M
OCCASIONAL
14.4 M
CORE
(1-7 Rounds)
(8+ Rounds)
• 6% of Rounds
• 94% of Rounds
• 7% of Spend
• 93% of Spend
*Average among those who keep score (79% of occasional; 95% of core)
Source: NGF/Synovate
24
Commitment Levels
NUTS
I’m a “golf nut,” I love the game and it’s my
favorite activity
HOOKED
I’m “hooked,” it’s one of my favorite things
to do
CASUAL
I’m a “casual” golfer – it’s one of several
ways I like to spend my recreational time
FRINGE
Golf is OK, but I most often choose to do
something else with my recreational time
NOTS
I don’t really consider myself a golfer, I play
rarely and usually only at the urging of others
25
Impact of Commitment
25.7 Million
Golfers
NOTS
FRINGE
CASUAL
HOOKED
NUTS
Golfers (MM)
2.3
3.3
11.3
6.2
2.6
Rounds
2%
4%
29%
41%
24%
Spend
3%
3%
32%
40%
22%
3
5
11
29
41
Avg Score
107
107
103
95
94
Retention
Likelihood*
38%
73%
93%
98%
97%
Rounds/Year
* Percent who say they will be playing in 2 years (Top 2 Box) unless physically unable
Source: NGF/Synovate
26
Frequency vs. Commitment Segments
OCCASIONAL
CORE
(1-7 Rounds)
(8+ Rounds)
Commitment
Category
Commitment
Category
Fringe
Fringe
Casual
Casual
Source: NGF/Synovate
27
Attraction to the Game
Reasons golfers like golf:
The opportunity to spend time outdoors (nature, fresh air, etc)
The social aspect – spending time with friends & family doing something we enjoy
Ball striking – the feeling you get when you hit a great shot
The challenge of the game – striving to improve – it’s never-ending
The exercise – getting out for a good walk – staying active
Stress relief – getting away from my every day pressures – an escape
Golf courses – the variety of designs, scenery, landscape, etc.
The values of the game (honesty, integrity, sportsmanship, etc.)
The mental game – thinking my way around the course
The competition – competing – the winning and losing
Keeping score – measuring my performance against the course/previous rounds
The game’s history & tradition - it’s one of the oldest sports in the world
Practicing – spending time on the range or practice facility working on my game
Opportunity to spend time with business clients/colleagues away from the office
Nuts
59%
55%
60%
77%
44%
47%
54%
55%
52%
53%
47%
42%
35%
23%
Hooked Casual
64%
54%
52%
46%
58%
40%
62%
36%
49%
44%
42%
36%
51%
28%
33%
23%
34%
23%
26%
13%
30%
10%
21%
9%
22%
9%
11%
12%
Fringe
40%
30%
28%
17%
31%
18%
19%
7%
11%
6%
7%
7%
5%
10%
Nots
47%
37%
15%
19%
33%
20%
21%
12%
8%
5%
5%
5%
6%
10%
% mentioned as “one of the main reasons I like golf”
Source: NGF/Synovate
28
Demographics
Not
Fringe
Casual
Hooked
Nuts
7%
11%
43%
28%
11%
100%
17%
20%
44%
13%
6%
100%
Average Age
39
37
44
50
46
HH Income (000)
$73
$92
$86
$84
$88
College graduate
64%
68%
61%
65%
64%
Married/living with partner
73%
74%
69%
72%
67%
Have Kids at home
37%
35%
34%
26%
25%
Male
Female
Source: NGF/Synovate
29
The Underpinnings of Commitment
Completely Agree
(5 on a 5 point scale)
COMPETENCE
Correlation (r)
(with Commitment)
.46
.42
Hooked
COMFORT
Casual
.42
Fringe
.42
Source: NGF/Synovate
30
Competence & Comfort Lead to Retention
“Comfort” Index by Retention Likelihood*
* Likelihood to be playing 2 years from now
Competence/Comfort factors scored and indexed to Hooked Golfers (100)
Source: NGF/Synovate
31
It Comes Down to Having Fun
FUN
% Top 3 Box (8-10)
COMMITMENT
Q. All things considered, how much FUN is golf for you? (0-10 Scale; 10 = Really Fun)
Source: NGF/Synovate
32
Value Rating
… and Perceiving Value
Source: NGF/Synovate
Fun Rating
33
Commitment = Prioritization
AVERAGE
COMMITMENT
Avg. Income
$73K
Source: NGF/Synovate
$92K
$86K
$84K
$88K
34
Implications for Growing the Game