Each week, thousands of New Zealanders take to their local golf courses to hit and hack around the little white ball and get some exercise. With the New Zealand PGA Pro Am Championship due to start next week on The Hills, near Arrowtown, business editor Dene Mackenzie talks to PGA chief executive Duncan Simpson about the business of golf.
Recent statistics on golf playing numbers are hard to find in New Zealand, frustrating attempts by PGA chief executive Duncan Simpson to work out the financial benefits of golf to the New Zealand economy.
However, while he knows there are substantial financial and health benefits in the sport, Mr Simpson also knows there are golf courses struggling financially and that amalgamations of clubs is inevitable.
Within the next 12 months, the PGA will join with New Zealand Golf to produce an issues paper, which will set out some targets for both the professional organisation and the amateur body to achieve.
Mr Simpson told the Otago Daily Times the frustration for him was that some of the statistics he needed to work with were three and four years old.
In 2008 research, golf came out as the fifth-ranked sport for the number of participants in New Zealand after swimming, fishing, cycling and equipment based (gyms).
But at 308,500 people who said they had played golf in the previous 12 months, it was double the number of people who had played rugby and four times the number of people who had been bowling, he said.
Also of concern was the number of golf courses in New Zealand, which this year was 395. That included rural courses run by volunteers through to large metropolitan courses like Royal Auckland and Balmacewen and resort courses such as Millbrook and Jacks Point.
"No-one is too far from a golf course no matter where they live in New Zealand."
Asked about the contribution of golf to the New Zealand economy, Mr Simpson said the effects on GDP were hard to measure although Australia, which had three times the number of golf clubs as New Zealand, had estimated golf contributed $A2.7 billion a year to the economy.
Extrapolating that out, the PGA estimated that golf in New Zealand was a $1 billion industry. That would come from sales, professional services, retailing and tourism.
In Australia, it was estimated there were 23,000 jobs created because of the golf industry.
That would mean several thousand jobs here in New Zealand, he said.
Golf also provided different career options, such as the latest trend in Auckland to have golf physiotherapists to "repair broken down golfers like me".
Also, when some people were taking up golf, private trainers would advise them to lose weight before they went back for golf tutorials.
"It sounds extreme, but they want to get players physically right." In the past, golfers had nursed niggling injuries instead of getting them fixed. Having them fixed at an early age would have extended the playing careers of a lot of people, Mr Simpson said.
"The younger brigade are all gym bunnies. Tiger Woods' much maligned caddie Steve Williams got him into the gym and running. We do call them 'flat belly' tournaments where the younger stars play. We have senior tournaments. We don't call them 'round belly' tournaments because that's insulting."
Moving back to the number of golf clubs in New Zealand, Mr Simpson said New Zealand had too many, especially when you looked at major or secondary cities. Each of them had one club too many and tried to survive by pinching members from each other.
Lower subs, or deals to attract members from other clubs, ended up lowering the income for all clubs as others tried to compete.
"There is a strong case for amalgamation to happen and the sharing of services. But history gets in the way when clubs have been around for 100 years."
The only major amalgamation Mr Simpson was aware of was in Lower Hutt between the Hutt Golf Club and the club next door, the Boulcott Club. And that only came about because new stop banks to contain the Hutt River were being built through the middle of the Boulcott Club.
Such was the tension between the two clubs that if you hit a golf ball across the boundary fence, you did not go to retrieve it, he said. Now, the club membership was amalgamated and the club was on a sound financial footing.
One of the problems golf needed to address as a business was a game model based on tradition that did not suit many people.
It was daunting to drive up to a golf course and see all the signs saying what you could not do as a member rather than becoming more flexible and member friendly.
During his time working in Scotland, Mr Simpson said there were patches of green in the middle of Edinburgh which were pitch and putt greens that people could just walk on to and play.
Unless there were changes to some of the older rules, clubs would have trouble attracting new members.
The average age of a golfer in New Zealand was 62, he said.
There was a "reasonable number" of young people playing but there was a doughnut in the middle as those married with family or job commitments took time away from the game.
Mr Simpson, himself a low-handicap golfer, took 12 years out from golf with his own family and job commitments before returning to the game.
Some of those who took time out returned in their late 40s or 50s, but some turned to other sports, leaving the membership to get older.
Another situation which hurt golf clubs financially was the collapse of finance companies, Mr Simpson said.
PGA members had invested their savings in finance companies and older members of golf clubs had also funnelled their savings into the companies.
When they collapsed, retired golfers lost a big chunk of spending money that they used for golf.
They started making decisions on whether they needed to spend $1000 on an annual membership, he said. The $1000 was an average membership in New Zealand with the Royal Auckland having an annual fee of $2700 and a waiting list. Mr Simpson believed the Royal Auckland was the only club in New Zealand with a waiting list and the wait was about seven years.
Looking to the future, Mr Simpson said golf found itself in the same position as rugby, with too many facilities for the number of players and supporters. That rule could be run across several other sports with bowls taking the lead on amalgamation and consolidation.
Clubs had fixed costs like a general manager or chief executive, course maintenance, course equipment and buildings. There was an opportunity to share management skills and equipment, but the model was unlikely to change without some pressure, he said.
Each year, golf clubs, like rugby clubs, produced optimistic forecasts about new members and "bottoms on seats", but the reality was, that new members did not come along in great numbers and supporters did not flock to rugby matches.
Budgets ran at a deficit and clubs cast around for other options. Clubs usually sat on valuable land and banks were prepared to lend them money to survive. Golf clubs sometimes received bequests and donations and the cracks were plastered over for a bit longer, Mr Simpson said.
"Very few clubs run a consistent surplus year after year."
This year, 120,000 people had paid a golf membership but 308,500 said they had played golf in the year meaning there were a lot of casual golfers in New Zealand.
The strategy was to try and get those casual members to join a golf club, but it might be better to get them playing more golf, he said. In that way, they would pay green fees, buy equipment and use the bar and restaurant.
"If we encourage more people to play more golf, more memberships will be the side effect."
Golf also had a major selling point it did not advertise well, he said. The handicap system allowed members to play against any other golfer and have a good chance to finish up even.
That advantage had not been sold to the public at large.
Golfers could even play against themselves using the handicap system because in the end, it was all about the score.
The PGA and NZ Golf had been talking about the future of golf with the PGA prepared to do its part to help provide a brighter future for the game in New Zealand.
The problems were the same for both organisations, Mr Simpson said.
The PGA lost jobs in a downturning industry while NZ Golf lost members.
"In the end, we are in the same boat. The industry model is not sustainable."
The PGA has about 400 members and Mr Simpson represents club professionals, some of whom work globally, touring professionals, senior members and life members.
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