The Sub-Prime Mortgage Crisis Spells Sub-Par Future for Golf Industry
After years of watching it unfold, it has come to light: the golf industry was way ahead of the curve when it came to fiscal irresponsibility. Years of fat cats boasting of great golf in the form of ridiculously high green fees have finally caught up with the erosion of the game of golf. The problem, they say, is slow play. “With so many options available to people today, no one has the time to spend a whole day at the golf course. Time is the main reason why golf is on the decline.” Please, give me a break. I guess that means that golf isn’t worth spending the time anymore. If that is the case, then time is the least of our problems. Now, I will admit that time constraints are more than they were twenty years ago. But the number one reason for slow play is over design (a subject for another day).
No. The problem is not slow play. It never was. Ironically, the same exact problem our economy is now facing – how to deal with the sub-prime mortgage debacle – has a direct link to the overabundance of overpriced golf courses throughout the United States. The problem was too much wasteful spending in order to justify home sales. Those home sales were needed to back up questionable development deals secured by banks big and small. The result was an overabundance of golf courses that never fit the model for golf. They may have fit the model for residential development, but not golf. Not only are there too many golf courses in the wrong markets, few of them are playable and even fewer are affordable. They never were.
The challenge of placing the newest destination on the cover of a magazine was the number one marketing tool for the golf industry the past few decades and it has caused a major bleed. That business plan costs much more money than the same sensible design our architectural forefathers pursued. Unfortunately it became the modus operandi for those looking to make a splash in the industry. Just as our society has become one of instant gratification, so has the golf industry when it came to delivering new venues for golf. But the inevitability is “here today – forgotten tomorrow.” The lack of fundamental design qualities leads directly to “forgotten tomorrow.”
Whereas only 22% of all golf courses in the United States have a residential component to them, more than 70% of golf courses built in the recent real estate boom are real estate oriented. Seemingly to provide green space backyards for all those cookie-cutter homesteads, fly by night residential golf developers seemed to know what it took to sell real estate – a big name architect and a large contingency fund to cover overruns - leading to the newest entry into the Top 100 and instant home sales. They were out of touch with the golfer. What is now left in the wake of loan recalls are a bunch of golf courses left on the doorsteps of the very people who sought refuge among these fairways. And they are clueless as to how to care for these hungry babies when some of them are struggling to feed their own real-live babies.
What is the real shame of all this? It’s been happening in the golf business for a very long time. The newest economic plunge centering on the sub-prime mortgage crisis is just the nail in the coffin of the golf course development boom. I am not surprised by the seemingly obvious connection. For years as a golf course architect, I have seen oodles and oodles of cash go into construction of a golf course for the sole purpose of selling real estate. No one ever heeded the warnings that we as an industry were spending way too much to build golf courses that few people would find enjoyment in. As recently as a few weeks ago, many of us huddled together at yet another golf conference again declaring that we need to not only talk the talk, but walk the walk. Yet there were very few answers to the golf development woes we are experiencing. Instead, it was carping on time being the sole factor why golf participation has flat lined, followed by “fresh, new ideas” on how to market your facility in these difficult times. The problem with these facilities is there is zero cash for marketing at this point because they are so damn expensive to maintain (At least tennis courts are relatively maintenance-free and we know what happened to that industry).
Green fees are too high to attract even those who aren’t affected by the economy and choose to still play the game. The bottom line is that golf is too expensive now and it was too expensive yesterday, last week, and last decade as well. The only difference between today and yesterday is that the crazy spending has been halted. I look forward to this market correction, although it will be a long one.
I’ve touched on many fundamental concerns about the golf industry while discussing this current economic climate – golf built strictly for residential sales, slow play, escalating construction costs, high green fees, and what to do with all those facilities that cannot make the numbers work (they never really worked) – and plan to address these specific concerns in the weeks ahead in my blog. Right now, I want to hear your perspective on the golf situation. You don’t need to be an industry insider to have an opinion. You, the golfer, the gal and guy who pull your clubs out of your trunk on occasion to play the game you love, are the people I want to hear from. Hopefully, the industry will get back to designing and providing playing fields for you and not a homebuilder or marketing expert.
About Richard: Richard Mandell is a Golf Course Architect in Pinehurst, North Carolina. Educated as a Landscape Architect at the University of Georgia (he is licensed in both North and South Carolina), Richard has close to two decades’ experience in designing new golf courses and renovating existing ones. Richard may also be the only golf architect in the world who is a certified arborist. He co-hosts a weekly golf radio talk show in Pinehurst and continues to teach a class on Golf Architecture at North Carolina State University which he started in 1997. Mr. Mandell also wrote the award-winning book, Pinehurst ~ Home of
American Golf - The Evolution of a Legend (International Network of Golf Book of the Year – 2007).
Richard Mandell has been a Golf Content Creator for the Washington Times Communities since October 20, 2008