Travel & Recreation Solutions | Intelligent Horizons, Inc.

[July 4, 2005] "Keep your eye on the ball!" How often have you heard that? Now, new evidence in golf seems to paint a different story. Based on Japanese research published in the August 2004 issue of Perceptual and Motor Skills, expert golfers putt much better because they don't follow the ball; they keep their head still and focus on the visual image of the "line of the putt".

Today's golfers are fixated on any performance advantage they can pick up. Back in the 1990s when Tiger Woods arrived, the number of adult golfers in the United States rose 15% to 26.2 million in 1997, before peaking at 30.4 million in 2000, and falling to 27.2 million in 2004, according to the National Golf Foundation (NGF).

Perhaps the industry growth attributed to the "Tiger effect" grew too fast. In 2003, golfers spent $3 billion in the U.S. on golf equipment, but that was 7% less than 2002. Off-course retailers now account for 80% of the dollars spent among golfers playing eight or more rounds of golf per year. That group of frequent golfers represents 47 % of the total, but account for 87 percent of golf-related spending.

According to the National Sporting Goods Association, golf is the second largest sales category in sporting goods. Home exercise equipment is first. That being said, evidence seems to support the conclusion that the golf industry has chilled in the last four years and beginning to stabilize. Some point to the economy and the stock market decline since 2000, and the slowdown in travel since 9/11; other contributions to the slow down include changes in the tax laws affecting business entertainment, and the reduction in the available free time and money to play golf.

Whatever the reasons, the overall number of rounds of golf played has decreased stead idly from 2000 by 4%. Nearly 400 18-hole equivalent course opened in 2000; 150 course opened in 2004 but 62 closed, leaving a net of 88 18-hole equivalents opened in 2004. In 2004 there were 14,988 18-hole equivalent courses in operation. Real estate has driven 40 to 60 percent of new course development. On Wall Street, shares of stock such as Callaway Golf, Adams Golf, Achushnet, TaylorMade, Golf Trust of America, and others have seen their share prices fall.

Many industry watchers do see a light on the horizon:

• The number of junior golfers ages 12-17 has increased from 2.5 million in 2003 to 2.9 million in 2004

• 75 million baby boomers are nearing retirement over the next few decades

• Worldwide, there are over 61 million golfers

• The number of female golfers has grown 11% in the last 13 years

• The number of Hispanic, African-American, and Asian/Pacific Islander golfers are increasing

• 50% of people that watch golf on television don't play the game, but 40% express an interest in starting

• The U.S. median price for a round of golf with a cart was $34 in 2004

• 15% of all golf rounds represent "travel rounds". Golfers spend about $24 billion a year on golf travel, with 75% of that going to hotel, transportation, and food and beverage industries

• Distance loving golfers look forward to equipment innovations and lessons from golf professionals

• As the industry consolidates, small, innovative start-ups are making in-roads

• Charity golf events continue to be popular at the national and individual community level