Supply side economics favor the golfer

     In a recent presentation at the PGA Merchandise Show, Jim Koppenhaver of Pellucid Corp. gave his analysis of the golf business. Each year his presentations are sold out because so many in the golf industry value his opinions.

    There is a wealth of data which he bases his findings on, but the message his simple and to the point: There continues to be too many golf courses and not enough golfers to fill them. According to Koppenhaver there were 518 million rounds played in 2000 compared to 451 million rounds played in 2014. That is a 13 percent decrease. The total number of golfers is currently around 23 million compared to nearly 30 million in 2000. That is a 24 percent decrease.

    On the supply side the number of courses has dropped each year since 2006. Since 2011 an average of 137 courses have closed each year. That number may sound considerable, but Koppenhaver says another 700 courses need to close to reach a state of equilibrium on the supply/demand graph.

    This is bad news for the supply side: course owners and operators continue to struggle to capture a piece of the declining playing population. However, this is good news for the demand side: golfers looking for a good deal. Golf rates probably haven't been this low since the 1990's at public and semi-private courses. Many private clubs have waived initiation fees in order to attract new members.

      These low rates should continue for at least the next five years until the gap between the number of courses and players to fill them closes. If you are a golf enthusiast I would say now is the time to take advantage of the low rates and great deals. Or as Old Tom Morrison says. "Go Play!"