February 7, 2015

Pine Hills Country Club RetreatState of the Industry

“If you build it – they will come” A golf course a day Go – Go 90’s Tiger Phenomena Strong economic times Anticipation of baby boomers retiring

Closings exceed openings Since 2006, course closings have outnumbered openings

after more than 4,500 courses had opened over the previous 15 years.

Golf club memberships and rounds played also declined during the recession.

Closings exceed openings Of the closings in 2013, 66 percent charged less than $40

for greens fees during peak times.

Public courses made up 97 percent (151.5) of the closures, with private courses accounting for 3 percent (6).

Bloomberg Business January 2014

Impact of recession has been significant, but it was an accelerant, not a stimulus. Club industry challenged for 20 years Tax law changes. Country clubs hit by overbuilding, high-end daily fee

competition Lifestyle changes Economic pressure on the middle class

Help People Connect

“‘Programming’ will rise even higher in importance for success in private clubs. Members will be drawn to clubs that provide personal fulfillment.

Connection to others will remain the mainstay of club life and those joining are seeking new ‘friends and a true sense of belonging…”

Further Stratification

“The top country clubs will thrive. The middle and lower tier will continue to be challenged

Those that cut service and value will lose their members to top players who add value instead.

Top 10% will be fine and live long and prosper.

The total number of clubs across all segments will decrease.”

Industry Leaders Predict – National Club Association

Game of golf is losing golfers Need to “grow” more golfers

Retain serious or core golfers Convert casual golfers into serious golfers Involve more women into golf – particular challenge PHCC Increase participation in Junior Golf Make golf more fun or fit

Oversize cups Kick golf Fat tire golf Speed golf

Macro Factors

Economy is improving nationwide and locally Local

More jobs than workers More workers than apartments New growth in insurance, healthcare and hospitality Strong manufacturing base and strong middle class wages

Macro and Micro Factors

High Tech  Diverse/Female/Family  Perceived Value  Year-Round Fun  Casual  Drop-In Place  24/7 Lifestyle  People Want What They Want 

Society

Traditional  Exclusive/Male  Symbol of Affluence  Seasonal  Reserved  Formal  Special Occasions  Leisure  Dictate Standards 

Clubs

How to evolve?

What can we learn from Industry Trends? In some ways our market is unique but our market is not

immune to broader trends and influences. One of the reasons some people belong to a private club

is tradition and the absence of change Change will happen it is how we manage that change An evolution not a revolution