Boomers might renew market for golf industry

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They just don't build 'em like they used to.

Not since the 1940s have golf course closings surpassed new golf course openings, according to golf industry officials.

"There's probably a net closing of 20 to 30 each year for the last two years," said Mike Hughes, CEO of the National Golf Course Owners Association.

Mr. Hughes said the course closings are the result of the current state of the real estate industry and a crowded golf market. There are about 16,000 golf courses in the United States, he said.

In the Augusta area, one closed at Brushy Creek Country Club in Wrens in 2007, said Jim Kass, a research director at the National Golf Foundation.

Many golf courses were built as part of master planned communities, and as the housing market slowed, golf course construction soon followed, Mr. Hughes said.

"Essentially, golf is finding its economic equilibrium again. The demand for golf and the supply are coming back into balance," he explained.

However, all is not lost for golf course owners. Some have been able to sell their courses to residential and commercial real estate developers because their courses sit on prime land.

Similarly in the 1940s, the land used for golf courses was more valuable for other purposes, such as farms or wartime uses, he said.

Ruffin Beckwith, the executive director of Golf 20/20, a program launched by the World Golf Foundation Inc. to grow the game, said that he's not worried about golf's fate.

The golf industry is worth $76 billion, according to a study using 2005 data, the latest information that is available, Mr. Beckwith said.

"The economic impact in the United States was $195 billion in 2005, which we thought was impressive." The golf industry has created 2 million jobs in the United States and has contributed $3.5 billion per year to charities, he said.

"I don't think there's another sport or activity that can come close to that," he said. In 2000, the golf industry was worth only $62 billion, which shows its significant growth.

The slow down in golf course growth is a market correction and was expected to happen, Mr. Beckwith said. This is portrayed as negative, but it's actually positive for the industry.

"We overbuilt golf courses badly in the late '80s, the '90s and the early part of this decade. We opened more than 400 golf courses in one year (in 2000), which is more than one per day, and we didn't have the demand."

The overpopulation of golf courses increased competition among golf course owners, but the closures could restore the market to a profitable business, he said.

The industry also suffered because golf courses in areas hit by Hurricane Katrina were not granted tax relief to rebuild, along with massage parlors, tattoo parlors and liquor stores.

Augusta's golf car manufacturers have also experienced a slowdown as a result of the golf course market.

Kevin Holleran, the president of E-Z-GO, said the golf and utility vehicle manufacturer must focus on other markets to stay on top.

Mr. Holleran said that E-Z-GO is focused on the hunting and fishing industries, homeowners in gated or planned communities and the growing international golf course market.

"There is an international development -- Spain, Portugal, parts of the Caribbean and eastern Europe are still growing at a pretty good rate. We'll continue to look to those opportunities to bolster our revenue growth," Mr. Holleran said.

Mr. Beckwith said he believes the U.S. golf course market will bounce back, but hopes that people are "more sensible" on where to build golf courses and how to build them. Golf courses must be more affordable and less expensive to maintain, he said.

Mr. Hughes said he expects the golf course market to rebound after another two to three years -- as many baby boomers retire and have more time to play.

"We're well on our way to recovery. It's a great game. It's been around for hundreds of years and it's not going anywhere."

Reach LaTina Emerson at (706) 823-3227 or latina.emerson@augustachronicle.com.

BY THE NUMBERS


Golf course closures in the last eight years


GEORGIA: 30


SOUTH CAROLINA: 37

Source: Jim Kass, research director at the National Golf Foundation


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