Flaw in Donald Trump's "aspirational" theory for golf.

[newtogolf]

Trump is talking about making golf sustainable again.  Tiger created a "golf bubble" where a lot of people that wouldn't have typically been interested in golf became interested.  As a result, golf courses and golf communities were built everywhere, golf manufacturers changed their business plans and product life cycles and the PGA, LPGA changed the way they approached their business.  

Everyone tried to capitalize on Tigers popularity and golf attracted a lot of people who weren't golfing for the love of the sport but because it was the "in" thing to do because of Tiger.  Tigers struggles on the course have since caused ripples throughout the industry, golf courses are shutting down, golf manufacturers are having difficulty maintaining revenue and profits year over year and many dedicated golfers complain their sport now takes too long to play.  

Everything is cyclical and the golf industry may eventually return back to the days before the Tiger bubble.  Everyone will see that as a negative because overall less people will be playing golf, there will be less golf courses and golf manufacturers revenues won't be as high as they were but that doesn't mean golf will be dead.  

If or when that happens, golf returns back to something that people "aspire" to play because it is a great sport and an ideal way to socialize and conduct business not because it's the current fad.   As a businessman Trump is a very smart man and I agree 100% with his take on it from a business perspective.  The Old Course, Pebble Beach, Augusta National  and some of Trumps courses will withstand the test of time because they are outstanding courses with great business models.  

[Lihu]

1 hour ago, newtogolf said:

Trump is talking about making golf sustainable again.  Tiger created a "golf bubble" where a lot of people that wouldn't have typically been interested in golf became interested.  As a result, golf courses and golf communities were built everywhere, golf manufacturers changed their business plans and product life cycles and the PGA, LPGA changed the way they approached their business.  

Everyone tried to capitalize on Tigers popularity and golf attracted a lot of people who weren't golfing for the love of the sport but because it was the "in" thing to do because of Tiger.  Tigers struggles on the course have since caused ripples throughout the industry, golf courses are shutting down, golf manufacturers are having difficulty maintaining revenue and profits year over year and many dedicated golfers complain their sport now takes too long to play.  

Everything is cyclical and the golf industry may eventually return back to the days before the Tiger bubble.  Everyone will see that as a negative because overall less people will be playing golf, there will be less golf courses and golf manufacturers revenues won't be as high as they were but that doesn't mean golf will be dead.  

If or when that happens, golf returns back to something that people "aspire" to play because it is a great sport and an ideal way to socialize and conduct business not because it's the current fad.   As a businessman Trump is a very smart man and I agree 100% with his take on it from a business perspective.  The Old Course, Pebble Beach, Augusta National  and some of Trumps courses will withstand the test of time because they are outstanding courses with great business models.  

One flaw in Donald's statement is that Tiger was born in 1975. I'm guessing that is was Arnold Palmer that made golf popular enough for the masses could play. Many of the courses sprouted up during that era, where more blue collar workers could also play golf. Most of these more affordable courses I've played were started in the early 50s and 60s, and even my home course was founded 75 years ago. So, I know of at least 50 courses that I've played the last 5 years or so which are not "Tiger" bubble courses and are affordable to most people who want to play.

Another thing is that the super exclusive country clubs in my area have cut their fees and opened membership. One of them now has a reachable $500 per month fee with a $500 initiation, and the really expensive and exclusive one only around $1000 per month. There is a third one that is extremely private and seems to have opened up their doors, so I know a few wealthy Chinese businessmen that were able to obtain memberships there where previously it was all white. Considering that they were courses that only wealthy white people could play on in the past, it is now open to all upper middle class people.

So, the main flaw I see in Donald's theory is that many of us would not be playing at all and a few of us would only play 2-3 times a year if we had to pay $475/round to play one of his or any courses of similar price range.

If golf becomes exclusive again with $60,000+ initiation fees and $3500+ per month fees, it will die out. No one will be able to play it and the PGA tour at the current level of athleticism would disintegrate, or could even disappear altogether.

Exclusivity will only kill this sport.

He's right that I do aspire to play his courses maybe once a year, but I'll train and play at my home course in a less expensive venue to hone my skills to be able to play his courses. OTOH, I'm just as happy playing goat tracks or links courses.

[newtogolf]

1 hour ago, Lihu said:

One flaw in Donald's statement is that Tiger was born in 1975. I'm guessing that is was Arnold Palmer that made golf popular enough for the masses could play. Many of the courses sprouted up during that era, where more blue collar workers could also play golf. Most of these more affordable courses I've played were started in the early 50s and 60s, and even my home course was founded 75 years ago. So, I know of at least 50 courses that I've played the last 5 years or so which are not "Tiger" bubble courses and are affordable to most people who want to play.

Another thing is that the super exclusive country clubs in my area have cut their fees and opened membership. One of them now has a reachable $500 per month fee with a $500 initiation, and the really expensive and exclusive one only around $1000 per month. There is a third one that is extremely private and seems to have opened up their doors, so I know a few wealthy Chinese businessmen that were able to obtain memberships there where previously it was all white. Considering that they were courses that only wealthy white people could play on in the past, it is now open to all upper middle class people.

So, the main flaw I see in Donald's theory is that many of us would not be playing at all and a few of us would only play 2-3 times a year if we had to pay $475/round to play one of his or any courses of similar price range.

If golf becomes exclusive again with $60,000+ initiation fees and $3500+ per month fees, it will die out. No one will be able to play it and the PGA tour at the current level of athleticism would disintegrate, or could even disappear altogether.

Exclusivity will only kill this sport.

He's right that I do aspire to play his courses maybe once a year, but I'll train and play at my home course in a less expensive venue to hone my skills to be able to play his courses. OTOH, I'm just as happy playing goat tracks or links courses.

You're confusing his use of the word "aspire" with "exclusivity".   Golf isn't the only sport to have a bubble.  I remember when racquetball took off in the 90's and everyone was running at lunchtime to play racquetball.  Tennis had a bubble when Connors and McEnroe were battling out and all the girls thought Andre Agassi was cute.  Then it bubbled again when the Williams sisters dominated and tennis courts were popping up everywhere.   Everyone wore a Bulls 23 jersey when Jordan was popular.

What Trump is saying is bubbles don't last forever and eventually after the bubble bursts, the industry goes back to it's roots and core supporters and those are the people the industry has to remain loyal to.  The courses and golf course communities that are struggling today are doing so because they were built when participation was at its peak.  As we see interest fall off due to greater demand for our time, economic or other issues the net result will be that we'll still likely have more courses than we started with pre Tiger bubble.  People outside the sport will get involved with the sport because they aspire to play rather than just because they are following some short term fad or trend.  

[Lihu]

5 minutes ago, newtogolf said:

You're confusing his use of the word "aspire" with "exclusivity".   Golf isn't the only sport to have a bubble.  I remember when racquetball took off in the 90's and everyone was running at lunchtime to play racquetball.  Tennis had a bubble when Connors and McEnroe were battling out and all the girls thought Andre Agassi was cute.  Then it bubbled again when the Williams sisters dominated and tennis courts were popping up everywhere.   Everyone wore a Bulls 23 jersey when Jordan was popular.

What Trump is saying is bubbles don't last forever and eventually after the bubble bursts, the industry goes back to it's roots and core supporters and those are the people the industry has to remain loyal to.  The courses and golf course communities that are struggling today are doing so because they were built when participation was at its peak.  As we see interest fall off regardless of greater demand for our time, economic or other issues the net result will be that we'll still likely have more courses than we started with pre Tiger bubble.  People outside the sport will get involved with the sport because they aspire to play rather than just because they are following some short term fad or trend.  

I admit that I probably am getting these definitions mixed up. My language skills are not the best.

Yes, I can see that aspire is more or less what I feel about playing the more expensive courses. It's a goal and not an expectation. However, I do expect to be able to play at my home courses and associated courses without paying a huge premium for it. If what he means is that golf should be a sport that one aspires to play at the best courses, but at the same time is accessible to a reasonable number of participants then that makes sense to me.

[natureboy]

2 hours ago, newtogolf said:

Trump is talking about making golf sustainable again. As a result, golf courses and golf communities were built everywhere, golf manufacturers changed their business plans and product life cycles and the PGA, LPGA changed the way they approached their business.

Sustainable for whom? Owners of exclusive, high-end golf clubs and housing developments? IMO, the 'golf industry' is much wider and deeper than that. I have no problem with him targeting a certain demographic, but am glad he's not in charge of any official public golf body.

Golf manufacturers and broadcasters (and their sponsors) likely do better with more mass participation in the game. Golf manufacturers sort of shot themselves in the foot when they pressured the USGA to go light on equipment regulation. What they got was an all out technology arms race and more rapid product cycles trying to capture more market share at rapidly increasing development cost. When the recessions hit in the 2000's and people scaled back on golf spending their margins were too tight.

Quote

Everyone tried to capitalize on Tigers popularity and golf attracted a lot of people who weren't golfing for the love of the sport but because it was the "in" thing to do because of Tiger.  Tigers struggles on the course have since caused ripples throughout the industry, golf courses are shutting down

I think the 'Tiger effect' was real but overblown. He was great for television ratings, with a slight bump to participation. What killed golf participation rates was the financial crisis. A lot of folks who thought they could retire on their 401K ended up needing to work or scale back.

Also a great deal of those course closings were high end housing developments / retirement communities that speculated that a high percentage of Baby Boomers would take up golf in retirement years as earlier generations did. That hasn't panned out quite as much as expected. Those developments tended to go after the highest spending demographic / segment of the potential golf market and they glutted it with product in a '4 pharmacies at the same intersection' effect Then there was a huge recession. Casualties were inevitable.

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Everything is cyclical and the golf industry may eventually return back to the days before the Tiger bubble.

Yup. U.S. golf has had phases of popularity spurred by players like Hagen, Jones, Nelson/Hogan, Palmer, Nicklaus, Tiger. They all contributed to the popularity of the game.

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As a businessman Trump is a very smart man and I agree 100% with his take on it from a business perspective.  The Old Course, Pebble Beach, Augusta National  and some of Trumps courses will withstand the test of time because they are outstanding courses with great business models.  

Trump is quite savvy, but he's made his business blunders too. I agree a long-term investment in a high-quality / unique product, commodity, or location can be a good business play. Mercedes Benz has been around for a long time.

1 hour ago, Lihu said:

One flaw in Donald's statement is that Tiger was born in 1975. I'm guessing that is was Arnold Palmer that made golf popular enough for the masses could play. Many of the courses sprouted up during that era, where more blue collar workers could also play golf.

That's a good point. Arnie contributed a lot in mass appeal, but so did all the great players over time. It's been a slow build. In the 'home of golf', participation rates seem to have plateaued around 13% of the general population. the U.S. isn't too far from that so there may not be a lot of natural growth left in the U.S. population unless golf is perceived differently relative to other more accessible sports like basketball, football, or soccer ('touch' version).

The blue-collar observation is a good one. People who do shift work have greater time access to golf during weekdays than most lower level white-collar workers. That's a potentially important golf rounds and equipment segment to take proper account of. There used to be more industrial shift workers in the U.S. though, and that could be why some of the smaller courses are struggling more than they used to.

One reason golf is quite popular in Australia and New Zealand is that they have a lot of smaller relatively 'bare bones' golf clubs (and public courses) that are affordable to less than upper middle class individuals. They do seem to produce more than their share of great golfers than you'd expect from just their population size.

 

As far as playing on 'goat tracks' how about a sheep pasture and a Caman?

Edited May 12, 2016 by natureboy

[newtogolf]

4 minutes ago, Lihu said:

I admit that I probably am getting these definitions mixed up. My language skills are not the best.

Yes, I can see that aspire is more or less what I feel about playing the more expensive courses. It's a goal and not an expectation. However, I do expect to be able to play at my home courses and associated courses without paying a huge premium for it. If what he means is that golf should be a sport that one aspires to play at the best courses, but at the same time is accessible to a reasonable number of participants then that makes sense to me.

Yes, the way i read it, he wants golfers to play golf because they have a love for the game, not because it's the current fad.  Trump caters to a very small segment of golfers, his focus, like Augusta National and Pebble Beach are exclusive experiences but his goal isn't to eliminate the other courses that charge less.  

This past year we had two fairly nice courses close down on Long Island.  Key demographics for golf are leaving our area due to high income and property taxes, as a result courses are struggling to stay open but eventually equilibrium will be reached.  

[natureboy]

33 minutes ago, natureboy said:

In the 'home of golf', participation rates seem to have plateaued around 13% of the general population. the U.S. isn't too far from that so there may not be a lot of natural growth left in the U.S. population unless golf is perceived differently relative to other more accessible sports like basketball, football soccer, or soccer football ('touch' version).

whoops word order error.