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05 Dec 2016

Business Bogeys: The Golf Industry—Vital to the Local Economy—is Facing Tough Times, but One Expert Remains Encouraged

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Sunset at Indian Springs Golf Club. Sunset at Indian Springs Golf Club. Kevin Fitzgerald

If you’re a casual golfer like me, you have undoubtedly seen signals that seem to portend an uncertain future for public golf courses, private golf clubs and golf retail outlets here in Coachella Valley.

When booking a tee time online, you may see more available slots—and cheaper rates—than there used to be. You may hear conversations about a certain club that’s eliminating all ladies’ golf events this season because of the dearth of female members. Then you hear about another club where revenue has fallen so low that the owners are poised to close it down and sell to real estate developers.

In La Quinta, the citizens and their City Council are struggling to create a viable community development to support the beautiful SilverRock golf course. Earlier this year, Lumpy’s, which had been serving the local golfing community for some 30 years, closed both its outlets in Rancho Mirage and La Quinta.

Meanwhile, golf remains a vital part of our local economy. Organizations such as the Greater Palm Springs Convention and Visitors Bureau and the Coachella Valley Economic Partnership point out frequently that the golf industry’s impact on the local economic balance sheet is sizable and therefore critical to our valley’s economic stability.

In an effort to find out what’s going on, the Independent recently sat down with Craig Kessler, the director of governmental affairs for the Southern California Golf Association; he’s the organization’s resident expert on all aspects of the golf industry’s longtime presence in our valley. We asked Kessler to evaluate the health of the golf industry in Coachella Valley.

“The golf industry is enormous in this valley,” Kessler said. “This is the greatest concentration of golf courses in the United States. The direct economic impact (of golf on local annual revenue) is over $1 billion. So for a population as small as this, that’s fairly substantial.”

A study using data collected in 2014 titled “The Economic Impact of the Coachella Valley Golf Industry,” completed by Tourism Economics, stated: “In 2014, the golf industry generated the following total economic impacts in the Coachella Valley region: a) Nearly $1.1 billion in total business sales; b) $413.3 million in labor income; c) More than 14,000 jobs. These regional economic impacts also generated significant fiscal (tax) impacts at the local, state and federal levels. In 2014, the Coachella Valley golf industry directly and indirectly generated approximately $83.3 million in local and state taxes and $90.5 million in federal taxes.”

Clearly, the game is integral to the area’s economy. Can the local population continue to count on it?

“I’ll say that we’re actually pleasantly surprised by the way our industry has withstood the recent challenges here in the valley—but also we’re watching it very carefully,” Kessler said. “Almost 27 percent of Southern California’s and about 14 percent of the whole state’s golf courses are right here in this desert. For example, the city of Los Angeles, with 4 million people, has 35 golf courses within its city limits, while you have 121 here. So the role that golf plays in the local economy here is phenomenal. I think it was Sonny Bono who said, ‘No golf. No Palm Springs.’ While that may not be quite true, certainly if you take out golf and agriculture, you don’t have much to drive revenue here.”

Kessler admitted the golf industry has seen some rough times in the last decade or so—rough times that he said need to be put in historical context.

“From 1946 to 2004, the game grew every year,” he said. “That spanned wars in Korea and Vietnam, urban riots, gas lines (due to shortages), recessions, double-dip recessions, etc. Some of those years were better than others, but even in the worst economic years, golf never suffered any declines. It continued to grow for 60 years. By 2004-2005, what I just described resulted in an industry ripe for an overdue correction—and that’s what hit the industry nationally, and here in California.”

Can the golf industry address the challenges it is facing?

“Over the last 10 years or so, the golf industry has learned that it can’t just sit and hope that (the players) will come,” Kessler said. “We have to become marketers, just like every other business in the United States. But I want to emphasize that when I read stories that talk about this game being passé, that it takes too long to play or is too difficult, and that people are no longer interested in it, I disagree. The facts that the base community of players has less money than they used to have, and the game has become more expensive than it used to be, are (the factors) driving the lack of participation. All the studies done about (consumer) interest in the game … show that the numbers are through the roof.”

Due to California’s record-breaking drought, golf courses have been subjected to unprecedented environmental and conservation pressures.

“One of the encouraging things is that as a result of recent conservation efforts, you’re seeing golf courses reduce substantially the amount of turf they irrigate, and maintenance expenses in general,” Kessler said. “By lowering those costs, we can reduce the cost of the game and put ourselves more in line with the market we’re trying to appeal to.”

Where should stewards of the golf industry be focusing their attention to encourage golf’s growth, longevity—and benefit to our valley?

“There’s no doubt that the lack of millennial interest in the game of golf is the greatest problem,” Kessler said. “In my opinion, I think that lack of interest results mostly from economic and financial factors, and not cultural or social factors. Honestly, I think it’s an insult to this particular generation to assume that somehow they are uniquely suffering from short attention spans and don’t like pursuits that are difficult. What they do have is extreme debt levels due to student loans. But if we don’t get them involved at a younger age, then they won’t be retiring to places like the Coachella Valley.”

In recognition of what some observers might call the anachronistic tendencies of golf and its culture, Kessler concluded: “There is something venerable about the historical traditions of the game of golf, but they need to be updated for each generation. Its values are timeless, but the forms of those values aren’t necessarily so. Now the private clubs are starting to incorporate families—and another encouraging sign about the demographics of golf is that Latinos, who are now a (plurality) of this state’s population and include many successful business people, are attracted to golf as a family activity. Golf was that way once—and it needs to regain that focus.”

1 comment

  • Comment Link JC Thursday, 08 December 2016 18:13 posted by JC

    There will probably always be a place for golf in the Coachella Valley, but our cities need to recognize trends and adjust for them. I lived in Houston in the 1980s, and when oil went bust, the city realized it needed to diversify. As the article notes, golf is trending out as a past time, and the natural resources (not to mention money) required to maintain the number of golf courses here in the Coachella Valley may be unsustainable. Golf certainly has a following, but no one I know comes here to play golf. They come for the night life, restaurants, shopping, the swimming pools, the relaxed atmosphere, the good weather, the tennis tournament, music and other festivals, and just to get away.

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