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Friday, July 5, 2019

The Business of Golf - Part 1

Business of Nevada Golf, Part 1

There are 1.9 billion ($) reasons that the game is much more than just chasing a little white ball on the emerald green tee boxes, fairways and greens of Nevada

Story by Brian Hurlburt, @LVGolfInsider

 

A lot of people mistake golf as solely a game.

Golf is an industry, and an industry that makes a remarkable and indelible impact on the economy of Las Vegas, the state of Nevada, America and the world. A recent study funded and organized by the Nevada Golf Alliance and its allied associations revealed that the direct and indirect economic impact the “game” creates in Nevada is a staggering $1.907 billion.

The report was crafted by researchers TEConomy Partners, LLC in agreement with GOLF 20/20, the Southern Nevada Golf Association, the Northern Nevada Golf Association, the Nevada State Golf Association, the Nevada Golf Course Owners Association, the Southern Nevada Chapter of the Southwest Section of The PGA of America, the Northern Nevada Chapter of the Northern California Section of The PGA of America, and the Southern Nevada Golf Course Superintendents Association of America.

The executive summary revealed how well Nevada takes advantage of golf the industry, not the game:

Nevada is a small state of 3 million people that hits above its weight in golf facility operations due to its large number of golf resorts and golf rounds generated by visitors. Nevada facilities (e.g., privates, resorts, and daily fees/semi-privates) reported higher average revenue than the national average. Nevadan retailers earned $16.7M on an estimated $42.0M of sales of golf equipment and apparel.

Member driven golf associations supported a variety of playing opportunities and tournaments, education and workshops, and meetings. Looking beyond the green, Golf Tourism and Golf Real Estate, were strengths. In 2018, the state’s largest golf industry sectors were:

  • Golf Tourism ($744.3)
  • Golf Facility Operations ($301.0M)
  • Golf Real Estate ($196.9M)
  • Golf-Related Supplies ($42.0M)

More positive news is that Nevada industry leaders, including Jason Cheney, Southern Highlands general manager and a Nevada Golf Alliance board member, believe the industry continues to be on an upswing. “Golf in Las Vegas on the private side is as good as I’ve seen it in 20 years,” Cheney said in Golfweekrecently. “The city is on fire.”

Cheney added the following after viewing the recent impact study: “The economic impact study completed this year provides the golf industry a platform to validate the game’s significance as an economic driver within our state. With significant contributions in jobs, tax revenue, charitable affiliations, tourism and real estate, it means the industry should be viewed as more than simply a game.”

Nationwide, the golf industry brings more than $84 billion of economic impact to the country. A recent World Golf Foundation report showed an increase of 22 percent from 2011 and the $68.8 billion impact at that time. The WGF and We Are Golf released the findings on National Golf Day, April 24, in Washington D.C.

Major golf leaders from the WGF, the PGA Tour, LPGA Tour, PGA of America and United States Golf Association share the consensus that local leaders share about golf being on an upswing at the national level. “Examining the state of the game today in 2019, there are positive signs that a whole new generation is getting excited about the sport, both from a fan and a participation perspective,” says Greg McLaughlin, president of the World Golf Foundation. “People are watching exciting professional golfers and want to try the sport. The industry communicates to this group in countless ways, always looking to reach them where they are most comfortable finding their news, therefore we put a heavy focus on sharing industry highlights through our social media channels.

“Fan engagement in the game is at an all-time high, due in part to the myriad vehicles in which fans may interact with the sport. This outreach is showing results. There are more than 24 million ‘traditional’ golfers in the United States, and another 15 million have said they are very interested in playing, which is an all-time high. Last year, 2.6 million people tried golf for the first time. Off-course participation continues to grow at a rapid pace with another 23 million experiencing the game at off-course venues.”

The recent Nevada impact study compared golf to other industries within Nevada with some interesting findings. The direct economic impact of golf in Nevada ($1.242 billion) was more than agriculture ($664.9 million) and performing arts ($883.7 million). Golf leaders hope the findings will assist the industry in legislative issues and continue to help with water challenges. “I was surprised that we do more than the agriculture in the state,” says Red Rock Country Club general manager and Nevada Golf Alliance board member Thom Blinkinsop. “With this much influence, we should get more responses about our concerns about taxes and water. We will see.”

At the national and Nevada level, the numbers are staggering regarding the opportunities and how the golf industry contributes to society at all levels. In Nevada, golf accounts for more than 17,000 jobs directly and indirectly. Throughout the United States, the numbers climb into the millions.

“There are more than two million jobs impacted by the game and its diverse benefits to our economy and our society,” says LPGA Tour commissioner Mike Whan. “It's often forgotten that the people working on the courses are the backbone of our sport. We live in a fast-paced, high-energy and high-stress world. A casual round of golf or a family visit to a professional tournament can provide the mind and the soul with a little bit of good. Moreover, all those visits by fans are likely driving increased dollars into local charities.”

One of the arguments against the golf industry is that the courses use too much water and are wasteful. The new economic impact study reveals how the water outlay is beneficial to many of the state’s goals and how continually raising water rates and potentially taxes will put even more pressure on an industry with a thin profit margin.

As for water, the Southern Nevada Golf Course Superintendents Association (SNGCSA) and its allied national association, continually implement best practices to utilize only each ounce of water needed.

The following is from a recent document of SNGCSA talking points used during discussion with legislative bodies. “Golf courses in Southern Nevada, which use less than two-percent of the water consumed in Nevada, are businesses that serve as a valuable community asset, a source of tax revenues and employment, and an important recreational outlet for community members of all ages.  Golf is a beneficial use of water and with (Nevada) Governor Sisolak’s focus on travel and tourism, golf will play an important role in helping further develop the state as a leader in global tourism. Courses in Nevada continue to make strides in reducing water usage through sound agronomic practices, turfgrass reduction, efficient and targeted irrigation, turfgrass research and a reliance on reclaimed water. Additionally, superintendents are highly skilled and trained in irrigation and receive continuing education not only through the Southern Nevada GCSA, but the Golf Course Superintendents Association of America, the United States Golf Association and numerous irrigation companies that support the golf industry including Ewing, Hunter, Rain Bird and Toro.”

 

In the next two issues, we will look deeper into the particular categories where golf in Nevada is making a dramatic and indelible impact, with tourism arguably being the most important with a direct impact of $744.3, and indirectly being a top amenity for affluent guests and gamblers who flock to Las Vegas for vacations or to attend world class events and conventions.

“Golf plays an important role in tourism for both Las Vegas and our extended destinations of Boulder City, Laughlin, Mesquite and Primm as a top-notch amenity to add to any leisure or business trip,” says Lisa Motley, CSEE, LVCVA, Director of Sports Marketing & Special Events. “While golf is appealing to the luxury guest, thanks to the wide variety of options from Shadow Creek to a Topgolf experience, there’s an option for almost every budget and ability level. And considering all of the business that’s done in Las Vegas, golf makes a great corporate hospitality activity for clients and vendors. 

“While Las Vegas is home to what is probably the best collection of world-class courses, golf is still a bit of a hidden gem with room to grow. There are some great high-profile events here, for example the Shriners Hospitals for Children Open, which last year enjoyed its best field in years and high attendance. That was also an important event in terms of tourism because it helped align Las Vegas with the PGA brand.The Las Vegas Convention and Visitors Authority (LVCVA) works with our local golf courses both in Las Vegas and in our extended destinations for familiarization trips, for both media and various industry partners, including sales and travel agents. Those familiarization trips are incredibly important for both the golf industry and the destination as a whole, helping garner both media exposure and sales/agent opportunities. Ideally, the LVCVA would like work in collaboration with the local golf industry to form a cooperative Visit Las Vegas golf task force to both increase the number of rounds and enhance the visitor experience.”

 

SIDEBAR

Chris Cain, the director of the successful UNLV Professional Golf Management PGA of America program and a Nevada Golf Alliance member, sees the business of golf in Nevada through a local, regional and national lens.

“As a proud member of the Nevada Golf Alliance, I am pleased to learn of the recent golf impact findings, which support the growing diversity of the Nevada state economy,” Cain says. “A previous report commissioned in 2005, focusing only on Southern Nevada, illustrated a $900M impact. When accounting for inflation, a broader lens and the growth sectors associated with the game, the recent $1.907 billion finding is not surprising.”

 

SIDEBAR

KEY FINDINGS

In 2018, the Nevada golf industry’s $1.198 billion of direct economic activity generated secondary and tertiary activity that resulted in:

  • $1.907 billion of direct, indirect, and induced economic output
  • 17,006 direct, indirect, and induced jobs
  • $675.4 million in wages and benefits
  • $136.2 million in state and local tax revenue.

Study Highlights

  • Nevada’s 88 regulation golf facilities (which managed 98.5 18-hole equivalent courses) generated $265.1 million in operating revenue.
  • Golf supports the state’s tourism industry, attracting travelers to different parts of the state and offering an outdoor recreational activity that complements other popular tourist activities. Travelers who played golf while on a day trip, overnight vacation, or business trip to Las Vegas, Reno, or the rest of the state generated $744.3 million in spending.
  • Golf championships also drive tourism. In 2018, Nevada hosted two PGA TOUR Events: the Shriners Hospitals for Children Open, played at the TPC Summerlin in Las Vegas, and the Barracuda Championship, played at Montrêux Golf and Country Club, near Reno/Tahoe.
  • New golf home construction was occurring at Sun City Mesquite at Conestoga Golf Club, Lake Las Vegas at Reflection Bay, Tuscany Village at Chimera Golf Club, and The Pointe, Wintercreek, and other subdivisions at Somersett Golf and Country Club.

Editor’s Note: Look for part 2 in the fall issue when we focus on charitable impact and overall tourism impact.

The Nevada golf economic impact report was prepared by TEConomy Partners, LLC in agreement with GOLF 20/20, the Southern Nevada Golf Association, the Northern Nevada Golf Association, the Nevada State Golf Association, the Nevada Golf Course Owners Association, the Southern Nevada Chapter of the Southwest Section of The PGA of America, the Northern Nevada Chapter of the Northern California Section of The PGA of America, and the Southern Nevada Golf Course Superintendents Association of America. In addition, support for this report comes from the following allied national golf organizations: CMAA, GCSAA, LPGA, NGCOA, PGA of America, PGA TOUR, and USGA. The Nevada Golf Economic Impact Study was conducted by Jennifer Ozawa, Peter Ryan, Marty Grueber, and Dylan Yetter at TEConomy Partners, LLC with support from Nevada’s Allied Golf Associations.

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