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The State of Golf Development in the U.S.

Golf, like all sports, is subject to ebbs and flows. We 14-handicappers know the drill: following a birdie or an even rarer eagle is a bogey or a dreaded ‘other.’ Over 18 holes our scorecards look like an exotic overseas’ phone number.

The same wild cycle applies to golf development, particularly in the U.S. During the 1990s’ heydays, an average of 500 new domestic courses opened per year, raising the total of American facilities from 5,000 in the 1950s to 15,000. After a peak of 16,052, the ‘market correction’ reduced that number to 14,437 18-hole ‘equivalent’ courses by the end of 2014, according to the National Golf Foundation.

‘We built way too many courses in the 1990s,’ said Arizona-based architect John Fought. ‘It’s also important to note that a lot of the courses built during that period were associated with residential projects. Many of these courses were poorly designed and were ultimately doomed for failure. The better courses that were designed have been popular and very well received. But I do not think we will see many courses (new) being built for many years, unless they are foreign projects.’

The 2000s brought about a big change from the ‘build-it-and-they-will-come’ trend as golf course developers over-speculated on the amount of golf courses the American market could handle. For one, the expected increased interest by Baby Boomers didn’t materialize for various reasons (playing 18 holes takes too much time, the game is too expensive and too difficult, etc.). For another, the anticipated real estate component linked to many new golf developments never panned out (a 2010 study by Cornell University found that less than 40 percent of people who bought fairway-side homes ever play golf).

Notes Mark Miller, a Colorado-based architect: ‘The consensus by most in the industry is that golf will probably never experience a boom like we had in the ‘80s and ‘90s, and new golf courses are few and far between in comparison. Most new courses seem to be destination golf resorts, or private courses, built on spectacular sites. The days of golf being tied like an ‘anchor’ to a residential community for real-estate speculation seem to be over, although I will never say never. Did that over-development add to the slow down of the industry? I believe it did.’

Development was particularly hard hit by the 2001 recession (compounded by another in 2007), when people had less disposable income and resorted to cheaper non-golf pastimes. With this economic pinch leading to decreased annual rounds, many golf courses saw shrinking revenue and, as a result, owner/developers had less money to pay maintenance staffs and other personnel.

One of the biggest problems during the salad days of American course construction was a push to build beautiful (read expensive-to-build and costly-to-maintain) courses that were not environmentally sensitive and built in the wrong places. Adding fuel to this combustible situation was an urge to have new layouts designed by ‘superstar’ architects and appear on the ‘best- new’ course lists created by national magazines for PR purposes, making them incompatible for average hackers.

In terms of money, the math was pretty simple then (and is now). In very basic terms, if a new course cost a $10 million to finance (including designer and construction fees), the play rate would have to be $100 to match the capitalization rate (rate of return on investment). That number was simply not going to be met in a shrinking market and with cheaper options at existing, easier-to-play facilities available and a diminishing number of ‘avid’ golfers (those who play more than 25 times a year according to the Golf Course Owners Association), an important group that fell from a high of 6.9 million to 4.6 million between 2000 and 2005.
The result? With the U.S. market drying up, American golf course architects began looking elsewhere, including China, Europe and such far-flung places as India and the Baltics.

In the past few years there have emerged some slightly encouraging signs, though the climate is certainly not nearly as warm as before and likely will never be again as available land and permits are too costly, with traditional bank financing for golf developments almost nonexistent. Today, it takes individuals with both the ‘big hat’ and the ‘cattle’ to see high-end projects to fruition.

When asked about new construction, veteran golf course architect Jeffrey D. Brauer said, ‘There is a trickle of it, by all reports, split between domestic and international, excepting China of course, which seems to have fallen off the cliff.

‘I had two new courses there and it all stopped,’ added the Arlington, Texas, designer, who created such widely hailed layouts as Giants Ridge in Minnesota and Firekeeper in Kansas. ‘My friends over there tell me the stock market is really unstable, with people even getting some subsidies to invest in it to prop it up. And, the government kept many government-owned businesses at full employment, despite no real market for them. They are likely in for a long downfall, as it straightens itself out.’
Many architects such as Brauer have shifted their focus to remodels of existing courses, though that area also comes with a few caveats. ‘That market has been pretty strong, but not for total remodels, just partial fixes,’ Brauer noted. ‘I have one comprehensive renovation going, and a few master plans, but most phone calls come from clubs wanting most-necessary and/or the lowest-cost fix, like irrigation repair, upgrade, replacements, bunker reductions and improvements, adding forward tees or resurfacing greens. I believe the greens drainage companies like XGD [a division of Florida’s TDI Golf] are doing quite well.’

Brauer, who’s been in the business for 39 years, is somewhat pessimistic for the near future. ‘Playing Carnac, I see another slowdown,’ he said. ‘Looking at the economic numbers, oil is down, manufacturing is down and that usually signals a slowdown in the economy. I believe municipalities are still on tight budgets, limiting the public side, and all but the high-end clubs are struggling.’

Fought, a former PGA Tour player and 1977 U.S. Amateur champion, seconded those thoughts, but a bit more rosily. ‘The real work is happening in the renovation/restoration area. I have been quite busy helping clubs and even municipal owners improve their courses. I just finished remodeling an old course that is owned by the city of Phoenix. They did almost nothing to this course in 50-plus years and the course was in desperate shape and was losing money. The city partnered with Grand Canyon University, who has come in and rebuilt everything, including the course and clubhouse. Play has returned and the course is packed with players from dawn until dusk. In my opinion we have enough golf courses in most areas of the U.S. but we need to improve the courses we have. I think this area of design and construction will continue to flourish.’

On the positive side for golfers – and themselves – operators are making their courses easier to play and more economical to maintain. ‘Golf has traditionally been a very tough business, and every little savings count,’ Brauer notes. ‘That manifests itself in design changes like fewer and smaller bunkers, and those bunkers that remain with shapes that allow machine-raking and edge-mowing, flatter and with liners to reduce washouts and shoveling, etc. Before liners, bunkers large enough to turn rakes were common, but with liners now common, smaller bunkers make sense, since most are hand-raked. The good news is, in my view, the smaller bunkers actually improve design, by making the green a more visible target, as it should be.

‘There have also been many tee-reorganization programs that add back and forward tees, with the middle tees staying pretty much as is to make the course more playable by all. The new thinking is to place forward tees as short as 3,600-4,000 yards, based on proportional shot length.’

‘I think the next big move will be some courses that eliminate the back tees over 7,000 yards, which really only get 0.1 percent of play anyway at most courses. This eliminates turf and irrigation. Some bold owner will decide that changing the decades-long perception that a course needs largely unused back-tee length to be perceived as ‘good’ no longer justifies itself,’ Brauer says.

The importance of water conservation will be a big deal in the years ahead. ‘There is a move to make irrigation more efficient in terms of both water and electrical consumption, which often requires a new system,’ notes Brauer. ‘You may see more desert-style tee irrigation in other areas of the country. Standard double-row tee watering covers over an acre when there is really only 6,000-7,000 square feet that need it. It’s an easy way to eliminate water waste.’

‘People are now much more concerned about the money they spend and what the final maintenance costs are for the finished product,’ says Fought. ‘This is good because they are now much more sustainable and cost-effective to maintain. We find that people want courses that require less hand maintenance and more natural, easily maintained features. For example, we are not building 100 bunkers on courses that require a lot of care. Also, with water being an issue, we are utilizing grasses that require less water and less mowing. It looks more natural and blends into the natural environment better. It is really a good thing.’

Miller, too, has observed a change in thinking. ‘I consult on a regular basis to assist with reducing maintenance costs through environmentally sustainable practices. This usually results in less turfgrass, irrigation, fertilizer and pesticides, and enhances the course with addition native or natural areas.

‘Another trend of golf design that I see is creating more user-friendly courses. In the heyday of the ‘90s, architects (in some cases, not all) were making big statements with steep slopes, crazy bunkering, elaborate water features, tricked-out greens and other gimmicks. Today, many courses want to scale back on the difficulty meter, not only from a playability standpoint, but from a maintenance standpoint as well. Quite a bit of my work consists of bunker remodeling and green remodeling. Many times it has to do with creating more comfortable playing conditions and ease of maintenance. Of course, there is the other side of the coin as well, where the course is old and run down and needs a facelift. I have found over the years that there’s always a way to make golf features interesting, fun to play, challenging, pleasing to the eye, and maintainable at the same time.’

Brauer is hoping for the creation of more short courses – or the reduction in size of existing regulation 18s – to address the new American demographic. ‘The prevailing idea seems to be that for Millennials – with less time and more interests – will be attracted to an upscale, short regulation nine holes for after-work play.’

Miller also strikes an encouraging pose. ‘I have worked on a few projects over the last few years with the National Golf Foundation. They are one of, if not the official keeper, of golf stats. Their findings indicate that golf is on the decline, and we are losing rounds and losing golfers. I tend to be more positive about the future of the golf industry. Yes, there is no doubt golf took a tremendous hit during the recession, but there are so many golf fans out there that I see golf remaining steady and slowly growing.

‘The industry is full of great, enthusiastic, committed people that work hard to grow the game,’ adds Miller, whose design work over the past 20 years has taken him around the world. ‘I experience it all the time through superintendent associations I belong to, the USGA and other independent organizations such as First Green and First Tee. Many of my projects these days have to do with re-evaluating current tee locations, and designing alternate teeing options to accommodate all levels of golfers. I am very optimistic about the future of the golf industry as a whole.’

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