U.S. golf course construction slows
By Steve Cameron
Monday, February 14 2005
Monday, February 14 2005
Published on AllBusiness.com
A report delivered by the National Golf Foundation indicates that the number of golf course openings in the United States decreased in 2004, and that the overall slowing of construction will continue this year.
The NGF information was released at the just-concluded Golf Industry Show in Orlando.
According to the NGF, the number of new courses being built has decreased every year since 2000. In 2004, there were 150 course openings and 62 verified closures (in 18-hole equivalents), for a gain of 88 courses -- a net increase of less than 1%.
The 2005 forecast is for 150 to 160 additional 18-hole equivalents. In contrast, there were nearly 400 18-hole equivalent course openings in 2000.
"To many golf course owners and operators, the slowdown is a welcome relief because it indicates that golf course development has adjusted to the lack of growth in demand," NGF president Joe Beditz said. "However, the decrease in new courses does not come as good news for the golf course design and construction business."
On the demand side, Beditz referred to studies that show that the number of rounds played in 2004 was almost exactly the same as 2003 and that those figures have remained basically flat for the past few years.
Including the last year's course openings, the total number of U.S. golf facilities stands at 16,057, breaking the 16,000 mark for the first time. Adjusting for 9-hole and 18-hole-plus facilities, there were 14,988 18-hole equivalents at year's end.
Of the new courses, 102 are open to the public and 48 are private. Real estate-related courses accounted for 59% of new development in 2004. Real estate has consistently driven 40% to 60% of new course development and that trend is expected to continue.
However, the overall number of new real estate-related courses is lower than in the 1990s.
"While many industry observers are expecting the real estate market to cool down due to rising interest rates and extraordinary price increases over the past several years, new real estate developments will continue to be built and some developers will continue to add golf as an amenity," Beditz says.
The NGF also tracks the development pipeline of courses that are in planning or under construction. As of Dec. 31 last year, there were 320 18-hole equivalents under construction, 410 in the planning phase and another 261 proposed.
The NGF information was released at the just-concluded Golf Industry Show in Orlando.
According to the NGF, the number of new courses being built has decreased every year since 2000. In 2004, there were 150 course openings and 62 verified closures (in 18-hole equivalents), for a gain of 88 courses -- a net increase of less than 1%.
The 2005 forecast is for 150 to 160 additional 18-hole equivalents. In contrast, there were nearly 400 18-hole equivalent course openings in 2000.
"To many golf course owners and operators, the slowdown is a welcome relief because it indicates that golf course development has adjusted to the lack of growth in demand," NGF president Joe Beditz said. "However, the decrease in new courses does not come as good news for the golf course design and construction business."
On the demand side, Beditz referred to studies that show that the number of rounds played in 2004 was almost exactly the same as 2003 and that those figures have remained basically flat for the past few years.
Including the last year's course openings, the total number of U.S. golf facilities stands at 16,057, breaking the 16,000 mark for the first time. Adjusting for 9-hole and 18-hole-plus facilities, there were 14,988 18-hole equivalents at year's end.
Of the new courses, 102 are open to the public and 48 are private. Real estate-related courses accounted for 59% of new development in 2004. Real estate has consistently driven 40% to 60% of new course development and that trend is expected to continue.
However, the overall number of new real estate-related courses is lower than in the 1990s.
"While many industry observers are expecting the real estate market to cool down due to rising interest rates and extraordinary price increases over the past several years, new real estate developments will continue to be built and some developers will continue to add golf as an amenity," Beditz says.
The NGF also tracks the development pipeline of courses that are in planning or under construction. As of Dec. 31 last year, there were 320 18-hole equivalents under construction, 410 in the planning phase and another 261 proposed.