By Peter Finch
Are public-course golfers about to get hit with higher green fees? That's one conclusion you could reach from Marcus & Millichap's Golf Investor Sentiment Survey 2014.
The real estate firm's National Golf & Resort Property Group recently queried "owners, managers, prospective buyers, appraisers, lenders and other consultants" to create a Golf Investment Index. (Use this link to see a report summarizing its findings.)
The Golf Investment Index is a scale that aims to track industry members' confidence. A score of 0.0 would be "a dead economy" while 100.0 would represent "a perfect golf investment economy," explains Raymond Demby, head of research and analysis at the firm. A score of 50.0 would mean the industry is evenly divided between optimists and pessimists.
The index now stands at 63.2. "People are as positive today as they were negative a few years ago," says Demby. Though the firm wasn't producing its index back then, "I would guess it was more like 35 or 40 in 2011."
Demby shared with me the detailed survey responses, and that's where you can see the public-course pricing movement. Nearly half of all owners and managers told Marcus & Millichap they're either "extremely likely" or "somewhat likely" to increase fees over the next 12 months.Owners have had to hold their green fees and cart fees, or even cut them, for the last few years. Now that they're feeling more confident, rising prices probably shouldn't come as much of a surprise.
"Golfers shouldn't panic," Demby says. "Most increases will likely be small and gradual. An increase in the effective rate charged may come from clubs offering fewer discounted rates, smaller differences between peak and off-peak tee times, etc."