Based on the number of renovation and restoration projects we are hearing about, it appears there is more good news than bad out there.
Kids are back in school, Labor Day is behind us, football weekends are upon us and some of the absolute best golf weather on the planet is at hand for the next eight weeks here in the Midwest (which is well-deserved and needed, following an abnormally wet spring). That’s enough good news to make me forget (almost) about the economy, the gyrations of the stock market and the endless gridlock in Washington D.C.
I suppose the dysfunctional nature of today’s politics is the root cause of the unsettled state of our economy—and of our country. There is nothing to suggest any of this will change between now and next year’s elections, so we can expect a lot more of the same between now and then.
Other things on my mind….
The “Quiet” Recovery
My conversations with owners and GMs from around the country this summer revealed an interesting common thread. What I usually heard went something like this: “We are having a pretty good year, hitting our numbers, and doing better than last year—BUT, it’s still a tough market, and I’m not so sure that other clubs are doing as well this year.” In other words, we’re doing fine, but there is no need to crow about it in deference to others who may not be doing so well.
Based on the number of renovation and/or restoration projects we are hearing about that are either already taking place this year. or are in the planning stages, it appears there is more good news than bad out there. Good for the club and resort market, for its members and guests, for suppliers, and for the many employees who rely on our market for their livelihood.
Hopefully, you are experiencing a quiet recovery of your own this year.
The aforementioned renovation/restoration projects cost money. And banks are reluctant lenders for a lot of clubs. There is always money available for good ideas, though. I recently learned about a club that secured bank financing, in part, by leveraging a $1.0 million loan commitment from members. Here’s how it worked: 40 members signed on for a $25,000 loan commitment to the club, with a three-year call provision. If the club made the call for the cash in that three-year window, the members lent the money and earned interest at prime plus one over a three-year term from the time of the call.
The commitment from members influenced the bank’s decision to finance the project. And it turned out the club never had to make the call to the members. This may be a variation on an idea you may have used or come across in the past, but it bears repeating.
NGF Confirms It…
The National Golf Foundation (NGF) continues to produce an endless stream of research and data about the golf market that I find fascinating. Two of its most recent offerings are titled Generational Risk in Golf and The Geography of Golf. Both are worth the read, but it’s the latter that caught my attention.
The Geography of Golf looks at state participation rates and trends in golf, including the number of golfers by region, the make-up of golf facilities in each state, the cost of golf, and the rounds per golfer. All good stuff.
What really caught my eye, however, was NGF’s selection of the “golfiest” state in America. The scoring process for this “award” included the following criteria: Participation Rate, Affordable Public Golf, Crowdedness, High Passion, Ranges, Playable Months, 9-Holers, High Interest, and Rounds per Golfer.
The Top Ten finalists for the title were North Carolina, South Carolina, Florida, Nebraska, Kansas, Iowa, Illinois, Indiana, Ohio and North Dakota. By my count, 40% of these are in the Midwest (although I didn’t see Great Fall Weather as part of the criteria).
And the winner is…well, you can go to the NGF website (www.NGF.org) to get that answer. I suggest you purchase both reports. Good reading.
The “golfiest” state in America. Their term, not mine. Interesting.
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