American Situation Is Worth Watching

Over the years, too many for my ego’s liking, I’ve used several general and unscientific rules of thumb to try and spot trends emerging from the United States that might affect Canadian golf and they’ve worked out pretty well.

Of course, the time-honoured rule is to always know and trust your source, so you’re not falling for public relations blah-blah that is angled only to increase business for a company, individual or segment of the golf industry and we all know there’s plenty of that nowadays.

So, first of all, you needed to know the numbers you’re considering are real. Once you considered the source, you took whatever number that grabbed your attention and figured out 10 per cent of that bigger number to apply it to Canada and what impact it will have on this country.

Over the past three years however, Canada and the United States have been separating farther apart in terms of their economies.

With the exception of 2008-2009 when the entire globe was in the midst of a meltdown, Canada has fared relatively well when compared to the United States in terms of foreclosures, bankruptcies, at-risk courses, reduction in green fees, core golfers and rounds played.

The question now is can we compare our own situation to the United States anymore? Does any American number have any relevance in Canada now, or is any comparison between the two countries apples and oranges?

The first thing Canadian golf operators should be striving to avoid is complacency that we’ve somehow dodged a bullet when looking at the situation down south.

Talking to many golf businesses in my rounds, there is a general acceptance that there is still a lot of work to be done after last year, but I have detected an attitude that what’s happening south of the border won’t happen here.

Yet, there are still many concerns here at home that may never put us in the situation of American golf operators, but still have the potential to slow the industry for years.

• You hear varied opinions on how quickly the Canadian economy is recovering after last year. Obviously, we’ve rebounded quicker than the United States, but can we honestly say we’re out of the rough now, especially considering recent economic events in Europe and other locations around the world?

• It’s too early to tell what long-term effect the Harmonized Sales Tax will have on green fees and memberships in British Columbia and Ontario, not to mention Nova Scotia, which just had its HST jacked up by two per cent. Kevin Thistle chats about his subject in his GNN blog today.

• Despite the public objections of owners, I’m still hearing a lot of talk from public golfers about reduced rates and coupon books they use to get a deal on green fees. Even if the economy is getting better, it’s going to be tough justifying a considerable hike in green fees in the near future.

• As it is in the U.S., the proliferation of golf courses, many of the high end variety, in many parts of the country is similar in Canada, where each course has a smaller piece of the pie and many are running on tight budgets, especially with clients/members spending less in pro shops, dining rooms, etc.

• The United States, with all of its economic troubles, is our biggest trading partner, which means it will have a certain effect on our own economy and limit tourism which, of course, takes potential revenue out of the pockets of Canadian golf course operators.

• When the National Allied Golf Association released its positive economic impact study a year ago, one disturbing note was that rounds in 2008 were down as much as 10 per cent and that was before the recession hit here. What damage has been done since? We don’t know due to the lack of numbers in this country.

Those are some of the challenges facing Canadian golf and while they may not add up to the impact of the credit crunch that staggered the American economy as well as the golf industry there, they do have the combined potential to impact the industry here.

Perhaps, the 10 per cent rule mentioned above still does apply in that Canadian golf has been hit with only 10 per cent of the impact as American golf across that country in the past few years. What’s happening down there may never hit full force up here, but it’s wise to be vigilant. We may even learn some lessons.

The U.S. situation could still be a reflection of what can happen here, even if it is to a different degree, so it’s worth keeping an eye on.

In this economic climate, caution trumps complacency.

Related Posts:

• Does Watching Pros Struggle Deter New Players?
• Did You Think It Would Come To This?
• U.S. Maintains Its Edge At Presidents Cup
• Americans Within Striking Range At Open
• The Test Begins For Cabot Links