The Pellucid Perspective - September 2017 - 2

GOLF
PARTICIPATION

Is TopGolf going to save us?
By Stuart Lindsay

TOPGOLF.COM/US/GALLERY

im Koppenhaver and I were first exposed to TopGolf in
2005 when Bob Wallace left KemperSports to get involved
in bringing TopGolf to the US. It took a couple twists and
turns, but TopGolf has become quite a success story. It may surprise some of you when I agree with those who are embracing
TopGolf as a potential answer for golf 's floundering participation numbers, particularly in the problem "Early Career" age
groups that contain both Millenials and GenXers.
The usual questions and skepticism we get from golf course
operators are also logical. The TopGolf alternative is directly
competitive to traditional green grass courses and ranges in the
context of vying for shares of recreational time and disposable income. We would somewhat agree, but TopGolf at least involves
hitting a golf ball. The growth of bicycling, kayaking, fly fishing
and other recreational pursuits that have impacted golf participation are not golf related.
Then there is the TopGolf committment to building interest
in golf. In a June press release announcing ClubCorp's affiliation
with TopGolf, TopGolf Entertainment Group Co-Chairman
and CEO Erik Anderson said, "Topgolf is leading the next generation of the sport and constantly innovating to attract new fans
to golf. Our alliance with ClubCorp signifies our commitment
to not only help Topgolf guests transition to green grass, but also
refresh how ClubCorp and Topgolf fans play both on and off
the course."
As we move through some numbers, it really becomes clear
that TopGolf 's potential to increase overall golf participation
will still require some innovative re-thinking on how traditional
golf constituencies participate in the transition process. It's an
age-old industry problem with the only difference being that
TopGolf represents an apparently successful alternative form of
introduction.
TopGolf reported 10.5 million visitors in 2016. 63% of those

2 The Pellucid PersPecTive

visitors already played at least some golf. That means that about
4 million visits were by non-golfers who are exposed to hitting a
golf ball. Even if they just sat there drinking while others played,
some number are going to want to try it (probably a higher number after a couple margaritas).
For those who argue that TopGolf is taking away rounds
played at courses, the above numbers also define the high end of
that impact at about 7 million, less than 2% of the 460 million
rounds played in the US in 2016. If you do the math on the availability of bartered rounds and 3rd Party discounting currently
available (and we have), the potential negative revenue impact is
less for TopGolf than for those 3rd Party programs that are also
promoted as marketing assistance based on discounted rounds
encouraging more participation.
In addition to the ClubCorp alliance noted above, the PGA of
America and PGA Tour have both moved to embrace TopGolf.
The PGA of America sees employment opportunities and the
PGA Tour realizes that someone who has hit a golf ball is more
likely to watch or attend a Tour Event. Machivellian cynics might
want to simply dismiss this as enlightened self-interest, but the
real test will be to see if the end justifies the means.
While we are on the subject of PGA employment opportunities, take a look at the prominent promotion of TopGolf instruction. At $29 for a six person group, a new golfer is getting an hour
of fundamental instruction for less than $5. Widely distributed
industry surveys generally estimate that about 85% of all golfers
haven't taken a lesson, so this low cost approach will at least give
us an opportunity to observe the effectiveness of instruction emphasizing the quick basic fundamentals without the extraneous
encumbrances of swing thoughts, posture and some other things
that are woven into many current instructional approaches. It will
be interesting to see if TopGolf shares the relative success of their
program or if the growth of PGA employment will serve that
function.
Speaking of sharing, the transition of
TopGolfers to green grass, and the overall
relationship of traditional golfers who also
visit TopGolf, will require the sharing of
participant information. Clearly, the ClubCorp alliance involves the sharing of data in
order to create the cross-promotion synergy
they think can be achieved. Will TopGolf be
willing to share data on a similar basis with
other multicourse and individual golf course
owner/operators?
Even though the 10.5 million visits need
to be adjusted for return customers, there can
be no doubt that TopGolf is providing golf
related promotion to a significant number
of golfers and non-golfers alike. And with
September 2017

http://www.TOPGOLF.COM/US/GALLERY

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