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Golf Business Trends 2012 and The Opportunity for Growth. Presented to:. Golf Summit of Washington. NGF: Then and Now Golf Business Trends 2012 Opportunity for Growth. NGF: Then and Now. NGF at 77. Founding Members: Wilson Spalding MacGregor H&B Worthington Ball

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Golf Business Trends 2012

and

The Opportunity for Growth

Presented to:

Golf Summit of Washington




NGF at 77

  • Founding Members:

    • Wilson

    • Spalding

    • MacGregor

    • H&B

    • Worthington Ball

    • U.S. Rubber

Herb and Joe Graffis

Golfdom – Est. 1927

Golfing – Est. 1933

NGF Publication – Feb. 1955


NGF Today

  • 3,500 Members

  • Daily Fee & Municipal Golf Courses

  • Private Clubs

  • Management companies

  • Golf businesses (equipment manufacturers, turf products, associations, etc.)

NGF Board of Directors


Contributing to the Growth of Golf

Industry Research & Strategic Perspective

Conferences & Education

Support for Golf’s Major Initiatives & Associations

GOLF2.0


NGF Facility Membership

Only $225/year

We want YOU!




Rounds Played – 2012 YTD (Up 5.7% Nationally)

(% Change from previous year through December)

Mountain

(+7.0%)

West N Central

(+7.6%)

New England

(+3.2%)

East N Central

(+10.8%)

Pacific

(+1.6%)

Mid Atlantic

(+10.1%)

South Atlantic

(+2.4%)

+2.0% or higher

+1.9% to -1.9%

-2.0% or lower

South Central

(+5.0%)

Source: Golf Datatech National Rounds Played Report in cooperation with PGA Performance Trak and the NGF.Based on a sample of approximately 4,000 reporting facilities


Rounds Played – 2012 YTD

(Public Facility Concentration 2012 U.S.)

(The highlighted area represents 47% of the nation’s public golf facilities. Rounds are up 9% in this part of the country.

West N Central

(+7.6%)

East N Central

(+10.8%)

Mid Atlantic

(+10.1%)

Source: Golf Datatech National Rounds Played Report and NGF golf facility database.


Factors Underlying Jump in Rounds

  • Weather!

    • PGA Performance Trak reports playable days up over 6.5% nationally

  • Consumer Confidence and Spending

    • Consumer confidence & spending have been gradually rising as the recession driven “hunker down” mentality starts to fade


Rounds Volume

% Change Year Over Year

5.7%

Source: Golf Datatech National Rounds Played Report



Short Term Participant Trend

Participants (MM)

30.0

29.8

29.5

28.6

27.1

26.1

25.7

44%

56%

Source: NGF golf participation study



Growth of Golf Facilities

Number of facilities

Private

Daily Fee

Municipal

Source: NGF


Net Change in Supply

Net Change = new course openings minus permanent closures (18HEQ), not factoring in courses closing for, or reopening from, renovations

Source: NGF Facility Tracking


International golf course supply

Europe

7,014

21%

International Golf Course Supply

North America 18,410

54%

Asia

4,425

13%

Africa

865

3%

South America 603

2%

Oceania

2,014

6%

TOTAL 33,331

199 Golfing Countries



Consumer Confidence Index

90 = Normal

Index currently stands at 58.6

through January 2013

Source: The Conference Board


Recessionary Impact on Net Worth

S&P 500 and Case-Shiller Home Value Indices

S&P 500 Index (year 2000 as 100)

Case-Shiller Home Value Index (year 2000 as 100)

Source: S&P 500 / Case-Shiller


Consumer Spending Improving

Real Personal Consumption Expenditure Index

[Index numbers, 2005=100] Seasonally adjusted

Source: Bureau of Economic Analysis – Updated as of Dec. 2012



Latent Demand

Definition: People who express an interest in playing golf, but have not yet started.

HOW INTERESTED:

Very 6 MM

Somewhat 19 MM

A Little 47 MM

Q: How interested are you in playing golf now?

Percent of non-golfing population over age 6

Source: NGF/Synovate


Latent Demand Segments

Percent

Of

Latent

Latent

Very/Somewhat Interested

Beginners (Never Played)

Those With Some Experience

(Never Committed)1

Former Committed Golfers2

12

47%

9

37%

4

16%

25

100%

(1) Classified themselves as “Not” or “OK” (2) Classified themselves as “Fun”, “Hooked” or “Nut”

Source: NGF/Synovate


Demographics of Latent Demand

  • Golf’s latent demand skews:

    • Female (48% versus 19% of all golfers)

    • Average Income <$50K (44% versus 23% of all golfers)

    • Younger – Under 30(43% versus 28% of all golfers)

Source: NGF/Synovate


What’s Stopping Them from Playing

Main reasons they haven’t started playing golf yet/again

I’m concerned about the cost

Not enough time – I’m pretty busy right now

Not really sure how to get started*

There’s nothing stopping me – haven’t gotten around to it

I don’t have anyone to play with

Nobody has suggested it or invited me

*NOTE: Asked only of those who have never played golf

Source: NGF/Synovate


Lapsed Participants

Definition: People age 18-69 who have not played in the past two years,

but played at some point in the past

Lapsed Participants 21.5 Million

Lifetime golf experience of

Nots and OKs:

Played 1-2: 31%

Played 3-9: 42%

Played 10+: 27%

Source: NGF/Synovate


Demographics of Lapsed Participants

  • Lapsed participants skew:

    • Female (41% versus 19% of all golfers)

    • Average Income <$50K (38% versus 23% of all golfers)

Source: NGF/Synovate


What drove them away?

Aside from “time” and “money” (both of which continue to be cited as the first and second reason respectively), here are the main issues that drive participants away:

  • Difficulty

  • Embarrassment

  • Stuffiness

  • Intimidation

  • Slow play

  • Rude golfers

Source: NGF/Synovate


Understanding Commitment to GolfFrom the “Nuts” to the “Nots”


Traditional View

25.7 Million

Golfers

11.3 M

OCCASIONAL

(1-7 Rounds)

14.4 M

CORE

(8+ Rounds)

  • 6% of Rounds

  • 7% of Spend

  • 94% of Rounds

  • 93% of Spend

*Average among those who keep score (79% of occasional; 95% of core)

Source: NGF/Synovate


Commitment Levels

NUTS

HOOKED

CASUAL

FRINGE

NOTS

I’m a “golf nut,” I love the game and it’s my favorite activity

I’m “hooked,” it’s one of my favorite things to do

I’m a “casual” golfer – it’s one of several ways I like to spend my recreational time

Golf is OK, but I most often choose to do something else with my recreational time

I don’t really consider myself a golfer, I play rarely and usually only at the urging of others


Impact of Commitment

25.7 Million

Golfers

* Percent who say they will be playing in 2 years (Top 2 Box) unless physically unable

Source: NGF/Synovate


Frequency vs. Commitment Segments

OCCASIONAL

(1-7 Rounds)

CORE

(8+ Rounds)

Commitment Category

Commitment Category

Fringe

Fringe

Casual

Casual

Source: NGF/Synovate


Attraction to the Game

Reasons golfers like golf:

% mentioned as “one of the main reasons I like golf”

Source: NGF/Synovate


Demographics

Source: NGF/Synovate


The Underpinnings of Commitment

Correlation (r)

(with Commitment)

Completely Agree

(5 on a 5 point scale)

COMPETENCE

.46

.42

Hooked

Casual

Fringe

COMFORT

.42

.42

Source: NGF/Synovate


Competence & Comfort Lead to Retention

“Comfort” Index by Retention Likelihood*

* Likelihood to be playing 2 years from now

Competence/Comfort factors scored and indexed to Hooked Golfers (100)

Source: NGF/Synovate


What Drives People Away?

HOOKED & NUTS

NOT & FRINGE

CASUAL

  • Embarrassment

  • Intimidation

  • Stuffiness

  • Rude golfers

  • Slow play

  • Rude golfers

  • Embarrassment

  • Stuffiness

  • Slow play

  • Rude golfers

  • Impolite staff

  • Stuffiness

Could cause them to “walk” from the GAME

Probably

reducing

frequency

Could cause them to “walk” from your COURSE

Source: NGF/Synovate


It Comes Down to Having Fun

% Top 3 Box (8-10)

FUN

COMMITMENT

Q. All things considered, how much FUN is golf for you? (0-10 Scale; 10 = Really Fun)

Source: NGF/Synovate


… and Perceiving Value

Value Rating

Fun Rating

Source: NGF/Synovate


The Equation

F = Fun

C = Commitment

PV = Perceived Value


Commitment = Prioritization

AVERAGE

COMMITMENT

$86K

$84K

$88K

$73K

$92K

Avg. Income

Source: NGF/Synovate


Key Findings

  • More committed golfers than implied by core and occasional golfer segmentation

  • Plenty of latent demand

  • Deepen engagement by:

    • Increasing competence and managing expectations

    • Increasing comfort around the course and other golfers

  • More FUN, leads to deeper commitment, increased retention, higher perceived value, rounds and spending

  • Time and money are not the problem!


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