Golf's Travel Boom
Investment if flowing into golf tourism.
Every Monday, I write a newsletter breaking down the business in golf. Welcome to the new Perfect Putt members who have joined us since our last newsletter. Join 10,000+ intelligent and curious golfers by subscribing below.
Read Time: 5 minutes.
Today’s newsletter is powered by Unknown Golf.
Want the ultimate golf experience? Then, you need to check out Unknown Golf — the app designed to spice up your next golf round.
Simplify your scoring with Unknown Golf. The app syncs directly with your GHIN number. Wager on side games with real-time insights to encourage friendly competition.
Become an Unknown+ member and start transforming your game with the power of Unknown Golf. Perfect Putt readers can save 20% on their first annual Unknown+ membership for a limited time.
Use code BEKNOWN20 at checkout.
Hey Golfers —
The golf industry is relatively small in total value. For example, the National Golf Foundation estimates that golf had a total economic impact of $226.5 billion in 2022.
That may sound like a lot on the surface. But there are 35 companies in the S&P 500 that have a market cap higher than that alone. Adobe has a market cap of $234 billion. Yes, the company that is responsible for Photoshop is worth more than golf — sort of.
Other estimates value the global golf industry valued at around $100 billion.
Golf does not create billionaires. There are billionaires in the golf space, but they made their money elsewhere. Shoot, I don’t think the golf industry has created too many centamillionaires.
It isn’t necessarily a bad thing — money can be made in golf. But investment firms have generally stayed away from specializing in golf because of this. I believe this to be counterproductive.
If we have investment firms specializing in golf, it will create more innovation and disruption. Sure, some companies will not work out, but investors in the golf space allow for more risk, and risk creates value.
With all that said — one of the largest sectors of the golf industry is the global golf tourism market — valued at around $20 billion. And the total market is expected to grow to $33 billion by 2032.
In the last few years, we have begun to see golf-specific investment firms enter the market.
We have seen the PGA of America create EP Golf Ventures. New firm Old Tom Capital has invested in several companies. And established 8AM Golf continues to invest in golf organizations.
All of this is great news. We need firms investing in golf.
And we are seeing investment flow into the global golf tourism-related market.
Just last week, Old Tom announced an investment in Birdie Houses. The group led the $2 million seed round. The thesis behind the investment is that there is a gap in high-end housing accommodations for group travel.
Birdie Houses offers luxury rental properties in prime destinations with a concierge service.
Pebble Beach
Scottsdale
Pinehurst
Tampa
Mesquite
Myrtle Beach
The company plans to open its own owned properties in the future.
8AM Golf also has plans for the golf tourism market with 8AM Travel.
Investors are following the money. A large portion of new golf courses being built in the United States are resorts or private destination golf courses. It is impossible to name all of the new or recently opened projects — but there are many.
The Keiser family is building Rodeo Dunes in Colorado on 4,000 acres and recently announced Wild Spring Dunes in Texas on 2,400 acres.
Dormie Network just opened GrayBull in Nebraska.
Golf courses are being built to accommodate group travelers. We may not be relieving the supply and demand in larger metro areas, and that is a topic for another day. According to the National Golf Foundation, the United States has 124 golf courses under development.
Golf travel will continue to grow, and it has the opportunity to grow at a quick clip. Just as long as macroeconomic conditions don’t significantly deteriorate.
Golfers want to enjoy experiences right now, and from our conversations, we don’t see that sentiment changing any time soon.
Have a great Tuesday. We will talk to you next week!
Your feedback helps improve Perfect Putt. How did you like this week's newsletter?
If you enjoyed this week’s newsletter, please share it with your friends!
Are you interested in partnering with Perfect Putt? Click the button to learn more about sponsorship opportunities.
The other foggy bit is the concept of golf courses attached to real estate. That may be where Billionaires have been created. Is it real estate or golf?
And, may be the reason the Saudis invested/created LIV. To develop their coastline with homes, resorts and lotsa golf courses.
Consider a Dustin Johnson designed golf course with homes featuring Interiors by Paulina Gretzky. Celebrity golf tournament and Red Sea fishing tournaments
Excellent article that has nailed what is going on under the surface of this latest trend. I believe the pandemic’s golf boom & the subsequent settlement into a 3 day hybrid work week has created this environment for long term investment to mirror the forecast of golf travel growth.
Pinehurst’s new excellent #10 & soon to be announced #11 shows that their fingers remain on the pulse of where golf travel is headed.
The challenge with all of these remain adequate amount of accommodations on site as the traditional high end resort with a so-so golf design is not what these newest travelers are looking for.
Thank you for this very informative piece!