The recession added to golf courses' struggles, but those misfortunes have since reversed
Los Angeles, CA (PRWEB) April 01, 2013
The Golf Courses and Country Clubs industry is in the mature stage of its lifecycle, offering widely accepted products and services in the form of individual golf play, golf lesson and country club memberships. Revenue growth is determined by demand from households and businesses. “Households visit industry establishments for recreational and competitive golf activities, while businesses primarily rely on the industry for company events, including charitable events and holiday parties,” IBISWorld industry analyst Radia Amari says. Over the five years to 2013, industry revenue has grown at an estimated average annual rate of 0.5% to $4.7 billion, including growth of 1.1% in 2013. Profit margins (i.e. earnings before interest and taxes) are low for the average industry company. In 2013, margins will account for about 1.2% of industry revenue, up after several years of net losses brought on by the recession and lower golf participation rates.
The recession that began in 2008 and continued through 2009 hindered the industry, compounding already low golf participation rates. There are about 5.7 million Canadian golfers, according to the National Allied Golf Associations' 2012 Canadian Golf Consumer Behaviour Study. Of this segment, 1.4 million, or about 25.0%, are avid or engaged golfers, meaning they play regularly; the remaining 75.0% are occasional, or fringe, golfers (i.e. golfers who play occasionally or infrequently and are not strong supporters or followers of the game). The number of golfers fell during 2008 and 2009. “The recession reduced consumer and business spending, which negatively impacted the industry as its products and services are discretionary,” Amari says. Therefore, during periods of weak economic activity, the Golf Courses and Country Clubs industry experiences revenue declines.
The Golf Courses and Country Clubs industry has a low level of market share concentration. The industry has about 2,272 companies; however, the industry currently has no major players. The level of market share is expected to remain steady over the next five years, as more companies enter the industry. Over the past five years, the number of companies has risen. During the next five years, the number of companies is projected to grow faster.
However, the news is not all bad. Golf participation began to increase in 2010 and will continue to grow, albeit slowly, over the next five years. During the five years to 2018, industry revenue is forecast to grow. The number of nongolfers turned fringe, combined with an increasing number of fringe golfers-turned-engaged, will drive industry growth. A stronger economy will further support discretionary spending on nonessential industry services. But diminishing leisure time availability will hamper further growth. For more information, visit IBISWorld’s Golf Courses and Country Clubs in Canada industry report page.
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IBISWorld industry Report Key Topics
This industry operates golf courses as its primary activity and may include country clubs that have dining and other recreational facilities. These establishments often provide food and beverage services, equipment rental services and golf instruction. Golf courses can be public, private, semiprivate or part of a country club. This industry excludes golf driving ranges, miniature golf facilities and golf course resorts and hotels.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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