The classic golfer was the father of the family, playing golf at least once a week, but the new golfers enjoy a variety of leisure activities, of which golf is only one. They have very busy lives and they hardly have time to play golf, they have careers and families to look after, and so the number of golfers is growing but they don't play as often and they don't buy memberships. They don't see the added value of a membership or the added value of the golf club's social network. That is a big change.
Golf courses have to change because the clients are changing. We still have a lot of the classic, member golfers but there is little growth in that area, and golf is becoming more of a casual leisure activity rather than a dedicated sporting activity.
We have to find ways to persuade the floating golfers to play more golf, and that is a challenge to golf course owners. We need to think about retention marketing, which is totally normal in the fitness industry for example. It is typical in the fitness industry that people stay at a club for a few months and then they quit. The fitness industry is very good at getting people to come back to their facilities. In golf we have to learn to sell our products and to be more service-minded, and to place ourselves into the skin of this new generation of clients.
To be honest, the golf course business is arrogant. Somewhere in the back of our minds we still have the members-only feeling - and that is arrogant. Golf is a growing sport, yes, but at the end of the day, growth in our industry is measured by the number of rounds played.
We don't have figures to show how much the floating golfers spend at golf clubs in total, but we do know that the revenue per round for the green-fee player is much more than it is for the club member. We have statistics from some of our countries that show the floating players paying double what the members pay per round on average. They play fewer rounds but pay twice as much, which is another reason to encourage them to play more rounds.
The future is bright but it is not an easy market, and we need learn from the past. We have seen in France, in the UK and also in the Unites States an over-supply of golf courses. In France they thought they had a perfect solution for all those families living in Paris without enough money to maintain their chateaus in the countryside, so they thought, ‘Okay, let's build a golf course and then we have an income stream and the chateau can be used as a nice clubhouse'. But they forgot one thing: they had no market, and there still is no market for all these golf courses in the rural areas of France. Hardly anyone lives there, and the people who do live there don't play golf. From the tourists that visit, only a low percentage of them play a few rounds of golf.
In England, there was a situation about 15-20 years ago when too many golf courses were being built, because there was some research done about waiting lists [the R&A's infamous ‘The Demand for Golf' report] but the expectations were much too high and people started building golf courses anywhere. They were totally wrong. Too many golf courses were built in the wrong locations, and that is something we have to look out for today. A lot of golf course investors love the game, they want the status and owning a course appeals to their ego, but at the end of the day the rational figures are the most important factor. Clubs obviously need to be sustainable.
That is another challenge we face: to educate investors to make rational decisions.
Nevertheless, the future does look good because the baby boom generation is starting to take their pensions, with their numbers increasing in the coming years, and they have a lot of free time and a lot of money to spend. Research in Sweden has shown you can extend your life by five years if you play golf twice a week, so that must be good news!
The Big Change, the European Golf Business Conference, takes place in Berlin, on November 5-7, 2008 - www.egcoa.eu/conference2008
