As everyone reading this article knows, there are few industries whose performance is as much at the mercy of the weather as golf. In 2012, weather conditions were very conducive to high golf demand, as the U.S. experienced the hottest and driest spring in more than a century. Many golf course operators got their seasons off to an early start, and this was followed by excellent summer weather in most regions. The favorable weather during the first three quarters of the year played a large role in the 5.7% increase (Source: NGF/Golf DataTech) in rounds in 2012.
At NGF’s recent Golf Business Symposium in St. Louis, we brought in experts – Weather Trends International’s Jack Grum and Evan Lowery - to present a discussion on weather and the business of golf. WTI, founded in 2002 by Mr. Grum and Bill Kirk, provides, among other services, global 11-month weather forecasts. WTI has a strong record for forecasting accuracy and its services are utilized by a diverse array of America’s largest and most successful companies, including Coca-Cola, Unilever, Johnson & Johnson, Syngenta, Citi, Walmart, and 3M.
The goal of WTI’s Symposium presentation was to answer two key questions related to weather and the business of golf:
- Can we expect a repeat of 2012’s golf-favorable conditions this year?
- Is there anything that golf-related businesses can do ahead of time to mitigate the effects of bad weather, and take advantage of good weather?
The answer to the first question has been an emphatic “no” so far in 2013. According to WTI, the first four months of the year have been marked by the coldest conditions in 17 years and the greatest one-year drop in temperatures in more than 125 years. It’s also been the snowiest winter and early spring in two decades. In late March, nearly half the country still had snow cover, compared to only 7% in 2012. Significant spring snowstorms continued into early May. These conditions have resulted in delays to the start of the golf season of weeks or even months (especially in the northern third of the U.S.), as well as some well-publicized disruption of major events [Click here for video].
The effect of this poor weather on rounds of golf has been predictable. Through March, Golf Datatech reports that rounds are down 15.4% from last year. What does the remainder of 2013 hold in store for golf operators? WTI utilizes statistical algorithms to make year-ahead forecasts for temperature and precipitation. Based on their modeling, 2013 looks to be a tough year for golf operators, with much cooler and rainier conditions resulting in a significant decrease in golf playable days*.
NGF MEMBERS: CLICK HERE FOR REGIONAL 2013 GOLF PLAYABLE DAYS FORECAST
This brings us to our second question – what, if anything, can golf businesses do to plan for variable weather conditions and manage weather-related risk?
As Mr. Grum and Mr. Lowery told the NGF Symposium audience, there are several ways that the golf industry can leverage accurate forecasting data to improve their bottom lines:
- Accurate forecasts facilitate the strategic planning process.
- Knowledge of season-start timing on a local and regional basis can improve revenue forecasting.
- Inventory allocation and management can be adjusted based on expected regional differences in weather.
- Outings and events (e.g., club demo days) can be scheduled for days/weeks when weather is likely to be most favorable.
- Advertising and promotions can be timed and allocated properly to increase campaign ROI.
- Superintendents can save money, resources and effort by effectively timing watering schedules, fertilizer application, overseeding, etc.
According to Weather Trends, every 1ºF increase in average temperature year-over-year results in a 1% growth in rounds played, while every additional 1” of annual rain results in a 2% decline in rounds played. Hopefully, predictions of a bad weather year for golf will not fully materialize. However, as we learned in St. Louis, there are tools at the disposal of golf industry that can help management effectively plan for the worst, while hoping for the best. Alternatively, as the late great George Carlin once said, “If you don’t like the weather, move!”
*A golf playable day is defined as a day where more than 6 hours of playable conditions are present.