Boomers—the country’s wealthiest generation to pick up the pace on the golf course
- March 1, 2008
by Doug Childers
The plans call for traditional golf course features: lush green, rolling hills, picturesque stands of trees and strategically placed sand traps and water hazards. Despite appearances, the Westham Golf Club doesn’t want to be your father’s golf course. The developers of the club, scheduled to open in fall 2009 as part of the $1.5 billion Magnolia Green development in Chesterfield County, are marketing it to baby boomers in their 40s and 50s, with the focus on family-based activity.
The course features shortened tees for kids and a design that accelerates the pace of play for time-crunched players. Club Manager Mike Bennett calls it “the course of the future.”
Westham’s boomer-focused business model illustrates a key element in the golf industry’s growth strategy. The industry has experienced slow growth in recent years after a golf course building boom in the 1980s and 1990s outpaced demand. In 2006 (the most recent year for data) the industry saw more courses close than open — the first decline in the number of courses in six decades, according to the National Golf Foundation (NGF). Virginia seems to be beating the national trend, opening eight courses in 2007 and closing none permanently.
The industry is pinning its hopes for renewed growth on the aging baby boomers. Nine million of the nation’s 78 million boomers now play golf, according to the NGF, and more are expected to take up the game as they approach retirement.
A peek at boomer demographics explains why golf officials covet this generation. “Boomers make more than anybody else, and they spend more than anybody else,” says Matt Thornhill, president of the Boomer Project, a marketing research program based in Richmond. “Boomers outspend every other generation by $400 billion a year, which is more than the revenue of Wal-Mart.” In all, boomers spent a total of $2.3 trillion on goods and services last year. The average household income among boomers nationwide is $63,011. Among Virginia’s boomers, it’s $77,330.
Boomers’ buying power doesn’t come down merely to their incomes. It’s driven in part by their sheer numbers. “There are about 35 million people over the age of 65. It will be 72 million by 2030,” says Thornhill. Boomers on the leading edge of their generation — those born in 1946 — are turning 62 at the rate of 8,000 a day.
While many boomers don’t plan on retiring — “If you’re going to live to 95, why stop altogether for a third of your life,” notes Thornhill — they are expected to dedicate a lot of their retirement time to physical activity. Sports-related industries, including golf, are ready to aid the quest, with some adapting facilities to boomers’ needs. “Ski resorts are making moguls easier on the knees for boomers,” says Thornhill. “They have the money, so the resorts don’t want to chase them away.” (Moguls are bumps or ridges of snow in a ski slope used for freestyle skiing.)
Boomers looking for something a little slower than downhill skiing are expected to pick up golf clubs in growing numbers. But Thornhill isn’t convinced those numbers will be astronomical. “On the one hand, golf offers older boomers a relatively low-impact exercise opportunity with lush scenery and great locations,” he says. And older boomers whose kids have moved out will have time and money to spend on the game. “On the other hand, millions of boomers have played millions of rounds of golf already. They may consider themselves played out — and want to spend time and money getting new and different experiences.”
The NGF is more optimistic. It predicts that the number of golfing boomers will peak in eight or 10 years, playing 75 million to 100 million more rounds of golf than the 160 million rounds they play today. (Currently, 28.7 million golfers of all ages play 500 million rounds a year.) Nonetheless, even the most optimistic forecast for boomers may not translate into another boom in golf course construction. “Twenty years ago, the NGF said it was imperative that the golf industry build one golf course per day to meet demand,” says Jamie Conkling, executive director of the Virginia State Golf Association (VSGA). “People took them up on their word and then overbuilt. Now it’s saturated.”
Virginia, where boomers make up a third of the adult population, has 615,000 golfers 12 years old or older and 305 golf courses. Of those courses, 116 are private clubs. The industry accounts for 40,000 jobs and $950 million in?wages and salaries in the commonwealth, according to a recent economic impact study done by the Virginia Golf Council.
Facing competition from high-end public golf courses, many mid-level private clubs are having trouble attracting members, says Conkling, whose association has more than 300 private, public and recreational member clubs. “Players don’t have to pony up monthly dues and initiation fees” at the public courses like they do for private clubs.
Westham Golf Club’s Bennett isn’t worried about competition from public golf courses; he believes the private club model is more sustainable. “In a shrinking customer base, the daily fee side gets shrunk quicker, and they compete for a smaller pie. Discounting enters the realm, and that trains your customers to wait for a discount to come.”
Westham Golf Club expects to open with about 100 members. It initially will allow nonmembers to play as well, creating a revenue stream that will help keep member fees affordable. As membership grows, the club expects to offer fewer available starting times to nonmembers “until we reach the point that the membership is consuming the majority of playable starting times,” says Bennett. The club will become completely private after 400 to 500 members join. Bennett expects that to take three to five years.
While it eagerly awaits the retirement of boomers, the golfing world isn’t turning its back on the young. Two-thirds of all golfers began playing by the age of 25, according to the NGF, so seeding the next generation is important. Happily, the industry has Tiger Woods. “When Tiger came onboard in 1997, he made the sport cool,” says Conkling. “Before that, it never really hit the younger generation. It’s getting them interested in finding out what golf is about. But the golf industry has to keep it affordable.”
The VSGA encourages high school and college students to form recreational golf clubs through the organization’s associate program. “Any 10 people can be their own club for $18 a year per member,” Conkling says. “It’s very easy and extremely affordable.” Among other benefits, club members have access to VSGA discounts. “We feel if we can get individuals to form a club, it will drive them to golf courses.” The VSGA Foundation’s Robins Junior programs help teach children the rudiments of golf. Since their creation in 2001, the programs have served 11,400 children.
The course itself can help attract young players to the game, too. Westham Golf Club worked with the course designers Nicklaus Design and Ault, Clark & Associates to build a par-three practice hole that would appeal to young golfers looking to move from the driving range to the golf course. “So many beginning golfers get intimidated when they step up to the first hole they play. This knocks that barrier down for them,” says Bennett. “We did this with the Gen X-ers in mind.”
How much does golf cost?
The median green fee at a regulation 18-hole golf course in the U.S. is $40, according to the National Golf Foundation. In Virginia, it’s $46.50. However, given discounting, full rates are rarely charged. Many clubs offer rental sets, but you can get low-cost starter sets for less than $200.