Transcript Slide 1

Golf Business Trends 2012
and
The Opportunity for Growth
Presented to:
Golf Summit of Washington
• NGF: Then and Now
• Golf Business Trends 2012
• Opportunity for Growth
2
NGF: Then and Now
NGF at 77
Founding Members:
• Wilson
• Spalding
• MacGregor
• H&B
• Worthington Ball
• U.S. Rubber
Herb and Joe Graffis
Golfdom – Est. 1927
Golfing – Est. 1933
NGF Publication – Feb. 1955
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NGF Today
3,500 Members
• Daily Fee & Municipal Golf Courses
• Private Clubs
• Management companies
• Golf businesses (equipment manufacturers,
turf products, associations, etc.)
NGF Board of Directors
5
Contributing to the Growth of Golf
Industry Research &
Strategic Perspective
Conferences &
Education
Support for Golf’s
Major Initiatives &
Associations
GOLF 2.0
6
NGF Facility Membership
Only $225/year
We
want
YOU!
7
Golf Business Trends 2012
Rounds Played
9
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
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Rounds Played – 2012 YTD
(Public Facility Concentration 2012 U.S.)
(The highlighted area
represents 47% of the nation’s
public golf facilities. Rounds
are up 9% in this part of the
country.
West N Central
(+7.6%)
East N Central
(+10.8%)
Mid Atlantic
(+10.1%)
Source: Golf Datatech National Rounds Played Report and NGF golf facility database.
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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
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Rounds Volume
% Change Year Over Year
5.7%
Source: Golf Datatech National Rounds Played Report
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Golf Participation
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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
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Golf Course Development
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Growth of Golf Facilities
Number of
facilities
Private
Daily Fee
Municipal
Source: NGF
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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
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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
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Consumer Confidence Index
90 = Normal
Index currently stands at 58.6
through January 2013
Source: The Conference Board
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Recessionary Impact on Net Worth
S&P 500 and Case-Shiller Home Value Indices
S&P 500 Index
(year 2000 as 100)
Case-Shiller Home Value Index
(year 2000 as 100)
Source: S&P 500 / Case-Shiller
22
Consumer Spending Improving
Real Personal Consumption Expenditure Index
[Index numbers, 2005=100]
Seasonally adjusted
Source: Bureau of Economic Analysis – Updated as of Dec. 2012
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The Opportunity For Growth
- Latent Demand
- Retention
- Building Commitment
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
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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
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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
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What’s Stopping Them from Playing
Main reasons they haven’t started playing golf yet/again
I’m concerned about the cost
24%
Not enough time – I’m pretty busy right now
Not really sure how to get started*
41%
34%
Never
Lapsed
22%
24%
There’s nothing stopping me – haven’t gotten around to it
22%
19%
I don’t have anyone to play with
Nobody has suggested it or invited me
50%
35%
9%
19%
*NOTE: Asked only of those who have never played golf
Source: NGF/Synovate
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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
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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
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What drove them away?
Aside from “time” and “money” (both of which continue to be cited as the first
and second reason respectively), here are the main issues that drive
participants away:
Source: NGF/Synovate
• Difficulty
• Intimidation
• Embarrassment
• Slow play
• Stuffiness
• Rude golfers
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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
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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
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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
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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
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Frequency vs. Commitment Segments
OCCASIONAL
CORE
(1-7 Rounds)
(8+ Rounds)
Commitment
Category
Commitment
Category
Fringe
Fringe
Casual
Casual
Source: NGF/Synovate
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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
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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
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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
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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
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What Drives People Away?
NOT &
FRINGE
CASUAL
HOOKED &
NUTS
• Embarrassment
• Slow play
• Slow play
• Intimidation
• Rude golfers
• Rude golfers
• Stuffiness
• Embarrassment
• Impolite staff
• Rude golfers
• Stuffiness
• Stuffiness
Could cause them
to “walk” from the
GAME
Source: NGF/Synovate
Probably
reducing
frequency
Could cause them
to “walk” from your
COURSE
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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
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Value Rating
… and Perceiving Value
Source: NGF/Synovate
Fun Rating
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The Equation
F = Fun
C = Commitment
PV = Perceived Value
IF
F=C
AND
C = PV
THEN
F = PV
ERGO
F x PV = C2
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Commitment = Prioritization
AVERAGE
COMMITMENT
Avg. Income
$73K
Source: NGF/Synovate
$92K
$86K
$84K
$88K
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Key Findings
• More committed golfers than implied by core and
occasional golfer segmentation
• Plenty of latent demand
• Deepen engagement by:
 Increasing competence and managing expectations
 Increasing comfort around the course and other golfers
• More FUN, leads to deeper commitment, increased
retention, higher perceived value, rounds and
spending
• Time and money are not the problem!
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