web analytics
ABOUT US
Frequent Topics
Planned Community Consultants - project feasibility consultants

Golf Participation Up 11% Over 2019

According to the National Golf Foundation, golf participation is up 11% over 2019.   The U.S. data through October 2020, is now at 10.8% ahead of 2019’s pace despite losing 20 million rounds in the spring due to the Covid-19 lockdowns.  In fact, October marked the fifth straight month that play has been up year-over-year in every state in the continental U.S.   This increased play translates to roughly 39 million more rounds nationwide than a year ago.

 

Operating results for the U.S. golf industry represent a marked improvement over the generally dismal outlook that has existed for the past decade.   The reduction in golf participation over the decade has caused an increase in golf course’s being redeveloped or repurposed to new use.   Even with golf participation up 11% over 2019, more courses will proceed to partial or full redevelopment.  Our golf course redevelopment tracking has started and we’ll begin reporting in January 2021.

 

According to the National Golf Foundation (“NGF”), in both 2009 and 2016, roughly a quarter of public courses admitted to being in bad shape, financially.  Among private clubs, 21% were doing poorly in ’09, but seven years later that proportion had dropped to 14%.  This year, there’s been a dramatic rise in the proportion of U.S. golf facilities reporting to be in good financial shape compared to previous NGF studies, including more than half of public courses and nearly 2/3 of private clubs.  And, fewer than 1 in 10 (public and private combined) suggest that they’re currently in bad shape (0-4).

 

The National Golf Foundation article is based upon information from Golf Datatech’s monthly report.  According to its website, Golf Datatech provides the golf industry with specialized market research covering retail sales, inventory, pricing and distribution, along with consumer attitude and usage studies and strategic sales and marketing consulting.

 

The full article by National Golf Foundation about golf participation up 11% over 2019 (year over year), is available here:

 

Tracking the Impact of Covid-19 on the Golf Business – November 2020

 

 

Covid-19 Upended a Luxury Hotel Truism

Covid-19 Upended a Luxury Hotel Truism

Covid-19 upended a luxury hotel truism in 2020, that wealthy travelers make luxury accommodations impervious to economic downturns.   Those of us involved in the hotels and resorts industry, particularly the luxury segment, well remember the longstanding promoter’s line that luxury hotel investments were among the “least risk” real estate asset classes due to their business being about the rich.

 

As of November 2020, we see that among lodging segments, luxury hotels have been the most dramatically impacted by the pandemic.   Two of the leading luxury destination markets, experienced a decline in occupancy to 37% for the March through August, 2000 reporting period (per a CBRE report).   This is a remarkable result even given the pandemic.

 

Travel restrictions, quarantines, infection rates, and safety concerns have gutted corporate travel and group business of all kinds, adding to how Covid-19 upended a luxury hotel truism in 2020.   Looking ahead, although there is some evidence that the luxury segment rebounded reasonably well after past recessions, there has been no “black swan” economic event similar to this year’s pandemic.   Luxury travel will return, whether for leisure or business, but we may also remember this year as having propelled alternate accommodations – eco resorts, glamping, and the like.

 

Ironically, that staycationing concept and the driving distance lodging distances that are implied, proved to be the winner.  California’s coastal resort segment might have been one exception to the difficulties with luxury travelers, but the additional California policies for shuttering industries (including Covid-19 restrictions for accommodations) was an additional impedance.

 

We will now remember 2020 as the year that exploded this “luxury hotels are the safe investment” myth, perhaps fallacy.   There have always been independent luxury accommodations, since those days when our ancestors traveled the early highways and inns popped up along the way.  But it is the luxury “chain” concept were the “luxury can’t fail line” really took hold.

 

Some History of the Luxury Lodging Segment

 

William B. Johnson helped to propel this promotional line, in the years following his acquisition of the Ritz-Carlton hotel brand in 1983.   Most hoteliers are unaware that part of W.B. Johnson’s legacy is the initial founding of the Hotel Asset Manager’s Association (“HAMA”).   Founding HAMA members were asset managers involved with luxury hotel investments, each of which on behalf of owners deeply unhappy with the annual coupons coming from these assets.

 

Other luxury lodging brands were getting going in those days.  Just before W.B. Johnson, Rosewood Hotels & Resorts was founded by Caroline Rose Hunt in 1979.   And although a somewhat parallel development, between 1981 and 1983 the first of the boutique hotels opened.  These included the first Kimpton Hotel and the first Morgans Hotel (in New York, an Ian Schrager and Steve Rubell creation).

 

The 1980’s saw more luxury chains take hold.  The Mandarin Oriental name was established in 1985 following the merger of Mandarin International Hotels Limited and the holding company of the hotel The Oriental.   Aman Resorts got its start in 1988, the result of Adrian Zecha’s initial interest in building a vacation home in Phuket which became a plan to open a boutique resort with Anil Thadani and others.

 

In the next decade, in 1999, Fairmont Hotels would merge with Canadian Pacific Hotels, creating the truly iconic luxury lodging brand as we know it today.

 

There are certainly predecessors to these chain roll-outs, such as Four Seasons (which took hold following Inn on the Park in 1970), and, RockResorts which dates is origin story to 1956 at Caneel Bay on St. John USVI.   Few of these founders would have believed that a day would come when luxury hotels were the emptiest of hotels, when Covid-19 upended a luxury hotel truism in 2020.

the future of co-working places and players

The Future of Co-Working Spaces and Players

The future of co-working spaces and players has been propelled by the Covid-19 pandemic but new players were already busy entering the sector.   Coworking is an arrangement where workers from different companies share an office space, with access to common equipment, IT, utilities, and receptionist, and sometimes refreshments and mail services.

 

There has been a continuing evolution in coworking space since the 1960’s, when OmniOffices Group, Inc. (now IWG plc’s HQ brand) and Fegen Suites (whose legacy ended up with Barrister Executive Suites) pioneered predecessor sharing concepts.   Later entries such as St. Oberholz (Berlin) pioneered the Internet cafe and a fully communal experience.

 

The hotel industry is likely to take a large role in providing co-working and remote work spaces to travelers and local businesses.   Hotels and resorts have cost advantages over the myriad of co-working startups, as well as many excellent locations for this purpose, brand recognition, and the opportunity to provide food and beverage, additional personal services, and amenities.  Zoku in Amsterdam (established in 2016) is among the terrific examples –  a self-described “workmeetsplay hotel” concept for the global nomad.

 

The advantages of  the hotel industry are apparent with recent events.  WeWork is the Softbank-funded co-working company that has illustrated the difficulty of its business model; that simply being a well-funded first mover without any sustaining competitive advantages, is no business model at all.   As Covid-19 has weakened all co-working companies, the hotel industry is poised to make larger inroads.

 

In September 2020, AccorHotels has announced its £35 daily fee “Hotel Offices” work spaces, with the added perk of room service and lobby bar (in many locations).   Proper Hospitality is partnering with Industrious to bring the work-from-hotel concept to its hotels in Austin, San Francisco, and Santa Monica, with additional hotels to come.  Scandic Hotels, Sheraton, and Moxy Hotels (Marriott) have also announced similar programs.

 

Proptech firms such as LiquidSpace are bringing tech platforms to coworking, allowing any property owner to inventory and work with tenants desiring co-work, shared, or nearby remote places to work.   These Proptech applications are similar to the disruptive economics and connectivity of sellers and buyers, that companies  like Uber have brought to other industries.

 

 

Coworking Companies - the Latest

 

 

For More Information

 

We track the industry and the prospects for the future of co-working spaces and players, for clients exploring anchor tenant possibilities for projects.  For more information about the co-working industry, its players, history, and recent deals, click here:

 

Co-Working Companies – the Latest