The Pellucid Perspective - June 2018 - 2

GOLF COURSE
OPERATIONS

Course closures - some perspective
from Pellucid
"It's better to burn out than to fade away," Neil Young

"Old soldiers never die, they just fade away", Douglas MacArthur
"There are three sides to every story - yours, mine and the cold, hard truth," Don Henley
By Stuart Lindsay

e did a pretty deep dive on course closure data for our
annual State of the Industry Report in January. Part of
that research was prompted by two Municipal projects
we were working on. Since then, we have looked at several more
situations involving decisions to close or shrink golf operations.
In addition, for the last 5 years we have been assisting a profitable, family-owned golf course transition to a "higher and better
non-golf use."
We looked at 2006 - 2016 because 2006 marked the year that
we started seeing closures exceed openings for the first time since
the Great Depression. The numbers are interesting - 80% (about
1,800) of the approximately 2,200 golf course closures in US history pre-1900 to present have occurred since 2006. To further the
"burn out" side of the story, the median age of all golf courses in
the US is 48 and the median age of those closures was 26. It appears that it is not just the "old soldiers" fading away.
In all, the overall closure rate is just over 10% since 2006. It's instructive to look at the types of courses being closed. For example,
Pellucid's access to the IGDB Consortium database allows us to
sort "Member Equity" Private Clubs (23%) from privately owned
Private Clubs. We also sorted using the common industry metrics
which differentiate "Municipal"(11%) and "Military"(under 1%)

In all, the overall
closure rate is just over
19% since 2006.

2 The Pellucid PersPecTive

ownership. This means that about 65% of the golf courses in the
US are under private sector ownership.
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The closure rate for "Member Equity" Private Clubs is
very low at 2%
"Municipal" closure rate is 7% - 30% below the national
average
Private sector owned course closure is 14% - 40% above
the national average
Only the statistically insignificant "Military" segment
had a higher closure rate of 17%. It should be noted that
the "Military" Naval Course that Jim Koppenhaver managed in Hawaii as a Marine Corp Captain is still open.

The relatively low "Municipal" closure rate is really not surprising considering the experiences we have when we are called in
to public meetings to present our findings and answer questions.
We also pay attention to multiple sources that track golf industry
topics and golf course activity.
While each situation has its individual nuances, there are several common issues. The most important is that when the meeting
has a published subject of potential course closure, the majority
of the attendees are "golfers." The other main constituency is generally people who own real estate on or near
the course. There are often other "green space" advocates
who are willing to forget their usual objections (usually
un-informed) to excessive chemical usage and mower
emissions. Non-golfers don't generally show up because
they either don't care or support the idea and don't want
their golfer neighbors to know how they really feel.
At one recent hearing, we had several league members express their objections to closing a 9 hole course
sitting on property so valuable it could have ensured the
operation of the city's three other facilities for probably
the next generation and beyond. That was followed by
the sister of a PGA Tour player making a good case for
not shrinking one of the other facilities as an alternative. Of course, then there was the obligatory plea of a
resident worried about habitat for orphan baby owls. If
you guess that no decisions have been made, you would
be right.
In another situation, a major metropolitan park district had to terminate its contracted manager, but electJune 2018

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