With May showing a quick bounceback from the losses incurred during the shutdowns of March and April, golf is now having a “renaissance moment” that has even caught the eyes of investors. Weather permitting, there is still a possibility that the impact of the coronavirus outbreak could be minimized or even wiped out entirely for the year as a whole.
The U.S. golf industry lost as many as 20 million rounds in March and April due to course closures and coronavirus-induced anxiety, according to the most recent estimates released by the National Golf Foundation (NGF).
But play started to bounce back quickly in May, Bloomberg reported, with the number of scores posted to the Golf Handicap Information Network of the United States Golf Association (USGA) rising 22% compared to the same month in 2019.
Additionally, rounds played at courses in San Francisco, Phoenix and Orlando, Fla. jumped more than 20% from mid-May to the first week in June, Bloomberg reported, compared with average traffic in previous years, according to NGF data.
“It’s a boom right now,” Mike Davis, the USGA’s Chief Executive Officer, told Bloomberg. “We’re hearing about courses where you can’t get a tee time.”
Golf, in fact, is now having a “renaissance moment” in an era when outdoor activities are at a premium, Bloomberg reported. And the trend has caught the eye of investors, with the surge in participation proving to be a boon for golf equipment manufacturers.
Shares of Acushnet Holdings Corp., owner of the Titleist and FootJoy brands, have rallied to a record as investors look past supply-chain disruptions and retail-store closures and bet that sales will surge in coming months, Bloomberg reported. As of June 11, the company’s stock had gained 67% from a March 23 low.
“We expect that golf’s appeal will continue to be robust given its outdoor field of play and embedded ease of social distancing,” CEO David Maher said on Acushnet’s earnings call in May, Bloomberg reported. “The game is well-positioned for the post-pandemic world, and this bodes well for our business in the long term.”
Callaway Golf Co.has seen a slower rebound in its stock price, Bloomberg reported, but all 10 analysts covering the company have buy ratings.
The resurgence in participation has also raised hope that a new wave of converts will take up the centuries-old game, Bloomberg reported.
The USGA’s Davis said he’s been hearing lots of stories about new golfers learning the game in recent months, and dormant players returning, Bloomberg reported.
That’s been the experience of Scott Seymour, Managing Director of Golf at Octagon, a sports marketing firm, Bloomberg reported. Seymour’s college-age daughter, who was always a good ball striker but hadn’t been a big fan of playing a round, has reconnected with the game since the pandemic began, he said.
“She’s totally got the bug and loving every minute,” said Seymour. “I think we all were tired of going for a walk around the block.”
Barbara Trammell, who heads the course operated by the Oregon Golf Association in Woodburn, Ore., told Bloomberg that more than 800 rounds were played at the course over Memorial Day weekend—nearly twice as many as in previous years.
That kind of traffic is “unheard of for us,” Trammell said, adding that other golf professionals she’s spoken with are seeing similar levels of participation.
The desire for more physical activity and to get out of the house prompted Calin Thomas of Menlo Park, Calif., to start playing more golf, Bloomberg reported. Since courses in his area reopened in early April, he’s been averaging about four 18-hole rounds a month, up from two before the pandemic.
The 41-year-old has noticed that his rounds are quicker, a development he chalks up to streamlined processes like paying ahead of time and a lack of frills like an obligation to have drinks afterward with friends, Bloomberg reported.
“I get to the course now 10 or 15 minutes before I’m supposed to tee off,” he said. “I’ve been playing more because it’s a way to get out and it’s not the time commitment that it was.”
The latest NGF rounds report showed that after double-digit growth in rounds played in January and February, rounds were up 15% for the year entering March. But then, due to the outbreak of the virus and associated shutdowns, year-over-year drops of 9% in March and 42% in April left the industry down 16%.
More than half of golf courses closed nationwide for most of April and the drop in rounds volume alone accounted for a loss of about $1 billion in golf course revenues, without factoring in related losses in food-and-beverage or retail sales or event revenues, the NGF reported. (This doesn’t include related losses in F&B, retail sales, events, etc.)
The months of January through April account for a third of the calendar but only a quarter of annual rounds of golf, the NGF noted. So while rounds played were down 16% for those four months, if the balance of the year is flat, the industry would end up down only 4% versus 2019. And a participation surge in May through August, when nearly half of annual rounds are played, could help the industry offset the spring impact of the coronavirus.
“There is evidence both anecdotal and scientific that rounds in May might be up significantly over last year, as a result of a surge in demand, not only from core golfers, but from beginners and lapsed players, too,” said NGF President and CEO Joe Beditz. “If this surge proves true and if it persists even partially into the summer months, then we could recoup the rounds and revenue lost in March and April.
“Put another way, we’ll break even with last year if rounds are up 5% for the period May through December,” Beditz said.
Rounds have increased by 5% over an entire year only twice in the past two decades, the NGF noted, and over that same period, a 5% loss has only been recorded twice as well. With the past two each ranking among the top four wettest years on record in the U.S., the ultimate determining factor may prove to be the prevailing weather patterns across the country.