1999: Golfers spent $30 billion in 1998

A new National Golf Foundation report released Aug. 25 estimates that U.S. golfers spent $30.5 billion on the game and related products and services in 1998.

The NGF, an industry research organization based in Jupiter, Fla., queried nearly 12,000 golfers about their spending habits on equipment, fees, apparel, food and beverage, and miscellaneous items.

The study evaluated golfers’ expenditures by various categories, including gender, age and frequency of play.

By far, golfers most often opened their wallets – and purses – to tee it up. Spending on fees – which the NGF defined as club membership fees, green fees and cart fees – accounted for the lion’s share of all expenditures: 60.7 percent or $18.5 billion.

The balance was made up of the following:

• Clubs: 11.8 percent or $3.6 billion.

• Other equipment (bags, balls, gloves and shoes): 6.8 percent or $2.1 billion.

• Apparel: 7.9 percent or $2.41 billion

• Food and beverage: 10.1 percent or $3.1 billion

• Miscellaneous items (such as club repairs, golf aids and books/magazines): 2.6 percent or $790 million.

While the scope of the NGF study helps assess golfers’ spending, some industry observers expressed concern about the data’s reliability.

Club spending of $3.6 billion, for example, appears inflated, said one manufacturing executive who was reluctant to criticize the study without having a chance to study it thoroughly.

Nevertheless, he said it is widely accepted within the equipment industry that the club market is $2 billion wholesale annually. Using a common industry formula to calculate actual street price, the club market at retail is probably closer to $2.65 billion, the manufacturing executive said.

Likewise, the golf apparel market is about $1 billion wholesale, according to industry observers. At retail, they say, the value of the apparel market is likely no more than $2 billion.

Jim Kass, research manager at the NGF, said the study’s higher numbers could be attributed to several factors including inherent limitations of survey research. It is common, for example, for respondents to overestimate how much they have spent, he said.

“Lets say they actually purchase a dozen golf balls for $17.99. They’ll likely round up and report spending $20,” Kass said.

Club sales also are greater in the report because it takes into account consumer purchases of counterfeit and knock-off clubs, Kass said. The NGF said more golfers are buying components and building their own clubs, which it counts as club purchases.

Regardless of the data’s accuracy, the report provides an interesting glimpse at golfers’ budgets – most noticeably the price they pay to play.

The fact that 60.7 percent of all expenditures is linked to green fees or membership fees comes as no surprise, considering trends like escalating green fee rates and the recent proliferation of high-end, daily-fee courses.

According to the NGF, more than 900 courses are now under construction in the United States. And industry executives say more than two-thirds of new courses today charge green fees in excess of $60.

“Besides the shift toward high-end, daily-fee courses, green fees at existing courses are increasing at a rate faster than inflation,” said Rich Warfel, a senior associate at Economic Research Associates in San Francisco, a real estate economic consulting firm that specializes in market analysis for recreational projects such as golf courses, theme parks and resorts.

“Five years ago when we were analyzing a market, the threshold we used internally to categorize a course as high end was $50 and up,” Warfel said. “Nowadays, it’s more like $70 to $75. That’s certainly an indicator of the change we’re witnessing.”

And it is a sign of the times that should concern, if not alarm, industry executives.

Such price escalation forms a formidable barrier that could effectively prevent newcomers – and new dollars – from coming into the game.

At a golf course development conference in July, Beditz implored industry executives to build more medium-priced, medium-quality golf courses. He said such a market was underserved and could be cultivated profitably.

The NGF study also revealed the following:

• The avid player, defined by the NGF as a golfer who plays 25 rounds or more per year, spent an average of $3,339 on the golf categories described above. That sum was nearly three times greater than the average amount – $1,152 – spent by all golfers surveyed in the study.

• Among avid golfers who purchased clubs during 1998, 35.9 percent of them bought a driver, making it the most popular club selection. The driver was followed by fairway woods (29.8 percent), putters (24.7 percent), irons (24.0 percent) and wedges (16.6 percent).

• Avid golfers who bought a driver on average spent $222. Those who bought fairway woods spent an average of $198; irons, $477; wedges, $88; and putters, $78.

• Avid golfers who purchased other golf equipment – including bags, balls, gloves and shoes – on average spent $174. Those who bought golf bags spent an average of $92; balls, $80; gloves $30; and shoes, $79.

The study was based on a series of surveys conducted for the NGF by Market Facts Inc. of Chicago and The NPD Group of New York. Participating golfers were surveyed between February-November 1998.

All responses were weighted to match U.S. Census Bureau statistics for key demographic variables to be representative of all U.S. golfers ages 12 and older. The NGF defined a golfer as an individual, 12 and over, who played golf at least once during the survey year.

The last time the NGF estimated total spending by golfers was in 1994, but that study did not include all apparel categories nor food and beverage. In addition, methodologies were different, according to a spokesman.

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