In the rough – that describes the state of the golf course industry to a tee.
For a long form version of how the golf industry got to where it is today this dissertation form Clemson University by David Hueber will give you all the information you need http://www.clemson.edu/centers-institutes/pennell/PDFs-2012/David-Hueber-Dissertation-7-17-12.pdf.
The short term version of it is that the golf industry in conjunction with residential home builders and municipalities went crazy with new course construction in the 1990’s. Everyone thought that as baby boomers aged they would retire and play golf. Unfortunately, things changed, boomers didn’t retire, they aren’t playing as much golf as everyone thought and the generations behind them have not fallen in love with the game to the same degree as their fathers. So now we have too many courses, many that are not economically feasible and not enough golfers to fill their tee sheets and locker rooms. The Great Recession of 2007 further exaserbated the problems facing the industry as people had less disposable income to use to spend on golf. Rounds and revenues have dropped and the industry is in a crisis. Many courses have gone through bankruptcy and foreclosure and most others are struggling just to pay the mortgage.
In order to rebound golf needs to fix both its demand and supply problem. The supply problem is simply that there are too many courses, the first fix here is for development to stop, which except for a few rare instances has mostly happened. It is pretty hard to get financing for a new golf course development when most course that are selling today are selling for 25 cents on the dollar. The second thing that needs to happen on the supply side is that existing courses need to be plowed under for new development. Which is easier said than done. Most of the courses that were built in the boom were part of a residential community and it is very hard to redevelop those into another use. Many of these were built with restrictive covenants limiting future development and the uproar from neighbors with golf course views would make any development difficult to sell. The courses most likely to be redeveloped are those that are older, shorter and are not part of a residential development. The problem with shutting these down is that many of these are perfect courses for new golfers to learn the game on. Which means that you may be able to solve your supply problem but in doing so you might be negatively impacting your demand problem.
The demand problem is well above my pay grade. I have attended many conferences, all of which discuss how to get more people to try to play the game. The list of industry initiatives started to attract women, children and minorities to the game is too long to mention here. In short, golf is a game dominated by high net worth, middle aged white guys and in order to survive in the future the industry is going to have to attract new golfers to the game that are not from its core constituency. How to do that is the challenge, but in order to remain relevant and move forward the industry must adapt.