The Pellucid Perspective - June 2015 - (Page 9)

Golf participation Golf participation in 2020: Two "educated guesses," you pick By Jim Koppenhaver i n the words of the inimitable Yogi Berra, "Predictions are hard, especially about the future." Pellucid just completed and published our 2014 Consumer Franchise Health findings, so it's topical to gaze into our crystal ball and try to predict what participation will look like at the milestone year of 2020. As most of you are aware, the industry associations have their view of both the 2014 consumer base figures and change as well as their prognostication regarding the participation path from here to 2020. In this article I'll (attempt to) briefly provide our point of view and compare that to the "party line." I've been watching with interest the various "messaging" that's coming from the industry regarding participation and I'll say one thing, it's consistent if nothing else. The current message goes something like this: * We've "stabilized" somewhere around 25M participants over the last couple of years. * The reported declines in the participant base for each of those years are "within sampling error range" so we're actually stable vs. declining. * Any year now, we'll see participation return to growth due to either a) all the programs underway (followed by the obligatory list of any 3-4) and b) latent demand of xM non-golfers either "somewhat" or "very" interested in taking up the game (recently NGF added Millennial latent demand to the conversation to prove that Millennials "really do like us" (channeling Sally Fields). To that I offer the chart below as Exhibit A showing how well the associations' crystal ball worked the last time they attempted to quantify how this turnaround was supposed to play out: three Different Visions: the Golfer Base in 2020 ____________________________________________ ____________________________________________ 2020 2019 2018 2017 2016 ____________________________________________ 2015 15.0 ____________________________________________ 2014 20.0 ____________________________________________ 2013 25.0 Actual/Pell.Proj. 2012 30.0 NGF (2010) 2011 Golfers (Ms) 35.0 Pellucid (2010) ____________________________________________ 2010 40.0 Golf 2.0 (2010) I'll get to addressing all the lines, but initially let's look at the green and blue lines which were the PGA of America and NGF's predictions respectively, back in 2010 when they were offering similar messages of hope and encouragement on this topic. The optimists' club award goes to the PGA who, with independent consulting help, came up with the opinion that we would start to see traction on the various, well-intentioned but thus far not scalable programs they've fielded from 2010-2016 and then momentum would take over and carry us to 40M golfers by 2020. The blue line represents the NGF's opinion that population growth, muted by increasing diversity, would give us an annual 1% gain from the 2010 nadir and vault us over 30M by the magic 2020 year. As an intermediate milestone, the 2014 participant projections were 30M (PGA of America) and 28M (NGF). Drum roll please...Pellucid's just-released 2014 Consumer Franchise Health report puts the 2014 participant base (1+ rds/ yr, age 7+) at 22M. Wow! Can I get a reality check on Aisle 3? In all fairness, in the graph below, Pellucid's call was a shallow annual decline to 25M in 2015 but even we missed it at the '14 milestone by 3M so we were the "best of the bad guesses." That raises the interesting question, "Knowing what we know now, would we have invaded Iraq back in the Bush era?" Oops, sorry, wrong topic, let me rephrase. "Do we want to revise our estimate now for 2020 given what we know about the previous 5 years' trendline and the fact that neither our grow-the-game initiatives nor latent demand is coming to our rescue in the near future?" Within the 2014 Golf Consumer Franchise Health report data and findings, there are some reasons for hope and realism (I refrained from saying "despair;" it's not that bad as Arnold Palmer, Jack Nicklaus, Tim Finchem, Joe Beditz and others have repeatedly reminded us in the media): * Realism - The younger generation (Gen X and Millennials) is not participating or playing at the same level as the aging cohorts they're replacing. * Hope - The Silent Generation and Baby Boomers are holding up their end of the bargain, they're not participating at a higher rate but we're retaining them at higher levels and they're maintaining or increasing their commitment (rounds) to the game. * Realism - The anticipated rise of the woman golfer isn't happening in either participation or rounds (the good news is they're holding their own at current level so we're not alienating them at a higher rate at least). * Hope - Average frequency is holding steady, meaning that rounds declines aren't following the participation decline linearly (i.e. ~1%/yr vs. ~4%/yr). * Realism - We're becoming less relevant as our participation declines in the face of continued population growth. The Pellucid PersPecTive 9

Table of Contents for the Digital Edition of The Pellucid Perspective - June 2015

PGA Tour/EZLinks-backed site challenges GolfNow
Municipal golf property tax exemption affirmed by Ohio Supreme Court
California course owners adapt to new water cutbacks
Reinventing vs. Reinvesting
Golf participation in 2020: Two “educated guesses,” you pick
What’s right with golf?
May golf weather impact: Starting the full season in “neutral”
Dallas: Room for improvement in Big D P&L
NGCOA facing a critical leadership decision

The Pellucid Perspective - June 2015