I hope you are sitting down for this one because rarely, if ever, does a person make a prediction like the one I am about to make.
I predict course owners/managers are poised to have a banner year in 2015.
I believe everything necessary to impact the golf business in a positive way is perfectly positioned.
First, let’s start on the downside and work our way up.
The residue of the 2008 economic crash still lingers and can’t be dismissed easily but it is seven years in the rear view mirror. Business people have trimmed and cut every conceivable excess and it is time to begin looking forward.
In a previous article I wrote last fall, I said “Any moron can cut expenses. It takes a genius to grow the revenue”. I concede the expense side bears constant vigilance. However, the time is emerging for those skilled in revenue development to shine.
Interest rates have had a lovely long sleep and there are no immediate indicators of an awakening. Who knows when or even if the predicted and anticipated explosion in the inflation rate will occur.
Rampant inflation hasn’t occurred, the American dollar is strong and with interest rates low, opportunity arises to buy courses and equipment and pay down debt.
These are all good things for golf course owners.
With the exchange rate sitting around 80 cents, Americans will vacation in Canada, while Canadians will travel within our own country and that means closer to home. All of this is good for course owners.
Although the stock market has been volatile, many observers feel now could be a great time to buy stocks if investors are willing to face a rough patch in the near term.
The retail price of gasoline is low. Thereford, operation of course maintenance equipment, golf cars and other energy costs are also very low.
Low gas prices also mean that golfers will have a little extra cash for green fees, après golf drinks and other discretionary spending.
It has been a turbulent time since 2008 and recently, several golf courses have been or are about to be sold for development, which strengthens the available market for the remainder.
I frequently read of courses searching for new managements team or potential lessees, but if these were viable operations they wouldn’t be in this position. Perhaps they will survive but if they don’t, it isn’t always a bad thing particularly for neighboring courses.
Next is the weather.
In southern Ontario we have experienced several years of inclement weather. All indications are for a mild spring, followed by a warm lengthy summer.
Last winter brought some of the coldest temperatures and deepest snow seen in the past 75 years.
The cold weather continued into June with extra precipitation mixed in and summer really failed to materialize in many parts of the country, all of which was predicted by the climatologists.
However, early indications are showing a far better chance for both spring and summer to be slightly drier and slightly warmer than normal. Once again, this is good news for course owners.
I do feel badly for the Target Store employees, but most were employed either for a short period or were part time. Yes, 17,000 is a big number but very few of these came from positions of permanent employment to Target. There will be fallout, but not for the golf business.
Last, since budgets have been pared to the bone and if your facility is profitable, you are in an enviable position for the revenue artists to do their work.
With costs under control and either a break-even or profit situation existing, a big percentage of every new dollar generated goes directly to the bottom line. Release the hounds, encourage your creative thinkers, go crazy.
It’s time for the talent to shine.
I predict that 2015 will be the perfect storm for the golf business in Canada. It will be time to rid yourself of those self-defeating third-party sales companies and take control of your business out of the hands of others – you don’t need them.
Some operators will save a floundering business and some will become profitable, but those who knew how to manage their businesses over the past few years and now introduce some well-devised marketing plans will be taking their profits to the bank in bales.
As they say in the ski industry, “Think Snow”.
In the golf industry, “Think Green” and lots of it.