Throughout the latter part of the 20th century, golf was growing significantly in the United States. Not only was participation soaring, but new golf courses were being built at a record pace.
NB: This is an article from CBRE
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In some years, development activity exceeded 400 new courses.
The popularity of golf began to decline around 2000, as the tech bubble recession that began in 2001 slowed the pace of growth during the first few years of the decade. Annual declines in the number of rounds played started in 2006, and participation in the sport weakened further in 2007 and 2008 as the Great Financial Crisis sapped discretionary expenditure funds from the prototypical golfer. As a result, golf course closures began to occur more frequently than new course openings. Entering 2020, the number of rounds played on U.S. courses had dropped to 1995 levels.
Since 2020, however, golf has experienced a resurgence. In 2023, the National Golf Foundation (NGF) reported 26.6 million rounds of golf played on U.S. courses, up 9.5% from the 24.3 million rounds played in 2019. Of even greater significance is the estimated 115% rise in off-course participation, which is defined as driving ranges, simulators, and par-3 courses, during the same period.
While the desire to participate in outdoor sports during the pandemic has been identified as the catalyst for the increase in on-course participation, Topgolf has been credited as the “gateway drug” for Millennials, and the impetus for the rise in off-course participation. Fortunately for those who have invested in the golf business, research conducted by the NGF has found that off-course participation does not cannibalize on-course participation. In fact, increased business at Topgolf has generated additional on-course players.
The combination of new on-course and off-course golfers resulted in a total participation count of 45 million people in 2023. This represents a compound annual growth rate of 36% since 2019. According to the NGF, this makes golf the largest growing sport in America.
To analyze how the growth in the popularity of golf has influenced the U.S. lodging industry, CBRE analyzed the performance of 20 U.S. golf resorts that participated in our annual Trends® in the Hotel Industry survey each year from 2019 through 2023. In 2023, these 20 properties averaged 626 rooms in size, and achieved an occupancy of 63.7%, along with an ADR of $363.98. The average golf revenue for these 20 properties in 2023 was $6.9 million.
Golf Revenue
From 2019 through 2023, golf revenue at the properties in our CBRE sample measured on a per-available-room (PAR) basis increased by 42.0%, greater than the 27.7% increase in total operating revenue PAR during the same period. Golf revenue declined by just 5.9% in 2020, compared to the 52.1% falloff in total revenue, as the number of occupied rooms in the survey sample declined by 57.3% in 2020. The relative strength in golf play at hotels is consistent with the macro on-course patterns identified by the NGF during the depths of the pandemic.
