The First Call’s Bradley S. Klein draws upon his training in strategic and international studies to look at today’s golf industry
It would be nice if golf existed in a vacuum.
That is, after all, the reason we play the game — as an effort to escape the everyday demands of life, whether business, politics or a world seemingly run amok. The booming success of the game during the COVID-19 pandemic has affirmed that in a way. Once the initial ban was lifted, health regulators recognized the way in which golf enabled safe, outdoor recreation when so many other activities required severe limitations. The ability to maintain social distancing while still getting in some exercise has proven to be an unexpected boost to an industry that industry metrics like rounds played, number of golfers and annual course closings indicated had been in a slow, steady decade-long decline.
Unfortunately, there is no escaping the consequences of a political economy and world security environment in which the dangers and threats that loom feel like they are, at times, overwhelming. Climate change already poses a direct ecological threat in terms of rising coastal waters, searing summer heat and volatile hurricanes. Superintendents and architects have already had to adjust their standard practices to create the infrastructure needed to endure the resulting instability of weather. Now loom even more severe challenges for which none of us is prepared — whether we are course managers, educators or just parents who would like to be able to reassure our kids.
Apologies if we take off our golf hats for a moment and survey where we are. In a larger sense. This is, after all, one of those historical moments where it seems as if anything is possible — even the unimaginable. As someone who used to work in this field and wrote about it extensively ("Strategic Studies and World Order," 1994) before migrating over to the quieter realm of golf, I get asked a lot what the meaning of these latest developments mean. Here’s my best attempt at looking at the relationship between golf and international security
There are two contradictory markets that drive the golf industry. One of them, the elite 1-3% of all wealth holders, is flush with liquidity, indifferent to prices, and so drawn to the luster of the game and notions of elite access and conspicuous consumption quality that they seem to embody a principle of “reverse elasticity,” meaning that the higher the price the more attractive the pursuit.
My own ballpark estimate is that about 30% of all golf course projects target this sector. No wonder so many courses end up struggling — because they overshoot the ability of their client to afford what they are offering.
For the overwhelming majority of clubs and golfers, inflationary pressures are substantial. Difficult decisions will have to be made about everything from operational budgets. Equipment procurement, labor costs, scope of services offered and what the green fee will be.
The last two years during the height of the pandemic, golfers seemed indifferent to pricing. The steady impact of inflationary pressures is likely to take its toll moving forward on at least the secondary half of the golf market — at daily-fee facilities, municipal courses and entry-level private clubs where golf is very much a discretionary expenditure and price sensitivity prevails.
The inflationary pressures are not going to go away soon. They are being fed by a number of factors: reduced taxes on upper-income earners that has freed up money for speculative investment; intensive government investment in infrastructure to stave off economic collapse in the post-pandemic era; supply-chain backlogs on a global basis that have stifled supplies of everything from silicon chips and fertilizer to low-priced goods made in China; and uncertainty in the petroleum and natural gas supply pipelines that have prompted price hikes and excessive profit-taking.
Interestingly, all of these factors directly influence the golf industry, among many other sectors.
Two factors influencing work life on a global scale have dramatically reshaped labor markets. This has been transformative for the golf industry — though as with everything else in the world, the resulting trends pull in divergent directions.
The watchword today is mobility. The trend was unmistakable even before the pandemic emptied out office buildings and allowed professionals to work from home. Everything from tele-medicine, journalism, retail, design, the law and finance managed to adjust. Even a post-pandemic return to normal will not be enough to convince folks to put up with daily commutes or face-to-face office meetings.
The new mobility is evident in altered patterns of recreation, as well. The whole idea of a country club is based upon an early 20th-century notion of an elegant, estate-like country place that absorbs one’s entire needs of comfort. While families seeking a stable retreat will find such clubs appealing, a more mobile generation accustomed to greater freedom of choice and out for a fun escape without the capital investment entailed in fixed real estate will find out-of-the-way retreats like Bandon Dunes, Streamsong and Cabot Links more to their liking. Or they will more selectively gravitate to remote private destinations like Sand Hills or Ohoopee Match Club.
It would seem that instead of sinking $15,000 a year into one club, they will spend that same amount dabbling here and there on a handful of buddy trips without the commitment entailed in a fixed membership.
At the extreme opposite end of this mobility are the global flows of homeless refugees, many of them seeking entry into the U.S., where they could work and build a life — as did our ancestors. Yet the significant barriers to entry put up in their way because of politics have not only left many of them in a kind of stateless limbo but also deprive much industry of their labor power in the field.
Agriculture has been hard hit in this country, as have the service sectors. Ask any hotel operator or restaurant owner how hard it is to find reliable labor — or any labor at all. Yet this domestic shortage takes place against a global backdrop of unprecedented mobility.
Of course all of these demographic issues would be for naught if something really big takes place … like a world war. The inexcusable, brutal invasion that Russia has brought upon Ukraine threatens to upset a long period of peace in Europe and across what we generally call the West. The fall of the Soviet Union in 1991 brought with it an era of relative economic integration across Western Europe and a gradual development of the countries in Eastern Europe,. In the process American leadership was reaffirmed even as new powers emerged, particularly China. For complex domestic reasons having to do with the weakness of Russia of late, President Vladimir Putin has opted to recreate a version of the old Soviet empire.by seizing Ukraine It is a move born of desperation and miscalculation, and that now risks escalation.
The subtle balance of nuclear terror that has governed world politics since 1945 has always been based upon an assumption of rationality — that regime leaders would be constrained by a desire to preserve civilian populations, especially their own.
If the invasion of Ukraine gets bogged down and Putin reverts to yet more escalation, the danger is that he might even deploy chemical and perhaps even nuclear weapons, and not only on the people of Ukraine but upon the bordering lands of NATO countries. He has already raised the threat of nuclear attack if the West gets overly involved in establishing a no-fly zone over Ukraine. There is also the threat of direct attacks upon NATO bases and supply lines.
Already we have witnessed a reckless willingness to attack nuclear power stations in Ukraine. Deployment of even small, battlefield tactical nuclear weapons of any guise would unleash unimaginable horror and could readily escalate into the kind of international violence that Armageddon movies are made of. At the risk of belaboring the obvious, that would be a disaster.
The likelihood of such an outcome is hard to anticipate; suffice it to say we are in a realm of acute uncertainty that nobody should trivialize. At least during the Cuban Missile Crisis, both parties, the U.S. and USSR, were led by decision makers who adhered to the precarious rules of nuclear deterrence. In an era when brinksmanship becomes a tool with which to intimidate enemies, there exists very good reason to be worried about the possibility of rapid, even uncontrollable military escalation.
There are historical moments when golf takes a back seat to the march of major events. This is one of those times. Let’s hope we return to quieter days.
The point here is that as wonderful a refuge from everyday life that golf provides to those who play it, there is no way its structure as a business can be understood outside of a larger context. Some people might find this reminder annoying, as if it were possible to keep one’s head in the sand. In fact, understanding the world in which golf has to operate makes it, I believe, a more interesting game.
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