Commentary
The Great Escape
- by Jon Last , Columnist, May 19, 2009
There have been an awful lot of conjecture and speculation that the current U.S. economic downturn portends trouble for recreational sports, travel and other leisure pursuits, particularly those at the higher end of the price spectrum. In fact, a report featured in MediaPost's Research Brief showed that current conditions have been a boon for the motion picture industry, while other forms of leisure are suffering.
One might say that this is reflective of a consumer mindset that is now favoring cheaper, "entertainment and diversion lite." But, based on research conducted by Sports and Leisure Research Group and others, we're far from ready to throw in the towel. Rather, our supposition is that many of the doom-and-gloom sound bytes getting daily coverage are as much a reflection of increased competition brought about by recent supply build-up as a condemnation of our leisure infrastructure.
It's no great secret that the greater part of the past decade has seen huge ramp-ups in capacity of a variety of sports and leisure options. Whether it be luxury real estate communities or the proliferation of high-end, daily-fee golf courses, until the last year or so, the prevailing mantras were that "bigger is better" and "choice is good."
This phenomenon alone created heightened competition and a further blurring of the lines in consumer perception as market followers created "me-too" offerings that often commoditized others and made it increasingly difficult for first movers to differentiate themselves. Couple this with unemployment affecting all strata of the socio-economic spectrum, the rapid degradation of real estate values, and stock portfolio valuations, and the perfect storm had ostensibly arrived.
Yet, just as work that we conducted on the amenity real estate market in 2007 suggested that high-end consumers were feeling persecuted and exploited in the ramp-up of real estate valuations that had just peaked at that time, our early 2009 consumer sentiment work with a representative sample of golfers suggests that this market, at least attitudinally, is looking for refuge from the pervasive negativity. In fact, this desire for "escape" is consistent with what we saw in research conducted immediately after 9/11.
So, it is within this context that we look at our early 2009 attitudinal study as more of an affirmation that such sentiments are still quite prevalent in this latest bump in the road. We observed that nearly 93% of golfers planned to play the same or more golf in the year ahead. Similarly, two-thirds or more of all surveyed strongly agreed that it was important to allow life to include a variety of unique experiences, to spend actively on useful pastimes, and that the best years of their lives were still to come.
Nearly 60% strongly agreed that they were spending more time with friends and family than in the past, and that vacations should include an element of adventure. The second most strongly agreed-upon response, generating top three box scores from some 70% of respondents, was that "it's important to try new things."
Clearly, there is opportunity for brands in the leisure space to differentiate themselves along these need states, and to leverage their marketing communications in ways that articulate these prevalent values.
Of course, evaluative research can assure the resonance of specific marketing messages and leisure offerings. It's our hypothesis that those with the greatest impact will accentuate a brand's ability to hear consumers' outcry that they are demanding and finding value in those marketing propositions that offer a unique, valued and needed escape.
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Thanks for this article. It's important for us to be realistic, but to get all sides of the story. Times are rough right now, but there is still positive news out there. Thanks for not being afraid to do the research and give us the real picture. I like this newsletter.
Perhaps it's just the way the Op Ed is written but, even after a second reading, I did not come away with the impression that golf courses at the higher end of the price spectrum are not / will not be hurt by the economic downturn. To be fair, Mr. Last suggests that "at least attitudinally" the high end of the market is insulated from the economic downturn.
Lots of golfers I know are bargain-hunting these days. They would fit into the 93% who don't plan to reduce the number of rounds they play but they're looking to reduce their overall spend. If Mr. Last addressed this question in his research, he doesn't address it in the article.
Questions whether vacations should include an element of adventure, the importance of trying new things, and spending on "useful pastimes" seem to me to be self-fulfilling questions. The alternatives - a desire for boring vacations, never doing anything new, and spending on pastimes that are not useful - would never garner the majority of responses, no matter where the economy is headed. One might express those attitudes without the intent to spend until economic matters improve.
The point here is that, if SLRG used proper questions and other proper techniques in their research, this article doesn't leave that impression. Golf Datatech estimated that rounds of golf played were down 1.4% through September - before the worst news about the economy really hit hard. In the same (Feb 7, 2009) article in GolfWeek (which included comments by Mr. Last), GolfDatatech indicates that there was "heavy discounting in the last quarter; otherwise losses would have been worse." Perhaps the higher end of the market did not see these losses. It would have been useful to compare / contrast attitudes with what's happening in the market in recent months.
The 100% growth in traffic at GolfNow.com since the Fall of last year and the increase in the number of upscale daily fee courses that are now participating in the GolfNow discount program, presumably to fill out their tee sheets albeit at discounted prices, has certainly increased in recent months. Other discount sites have seen even stronger growth albeit from lower starting points.
Cocktail party conversation often turns to what's happening at private golf clubs - let it suffice to say that the picture is grim if not hopeless for some clubs as members elect not to renew. Attitudinally they likely would want to remain members. In many cases, the clubs' solution is to increase membership prices - probably not a sustainable move.
The subtle message from the attitudinal study of golfers is the same - if your rounds are down, make up revenue by increasing prices. Golfers' attitudes would seem to support this strategy. Since many golf courses lack strong marketing talent, that's the strategy that usually holds sway.
Golf equipment (including golf ball) sales are in a deep slump. Per Golf Datatech 63% of a somewhat skewed sample (those who read golf publications regularly) intend to spend as much or more on golf equipment in the coming year. If 37% of these avid golfers intend to spend even less than in the past [dismal] year, what percentage of the broader market intend to spend less while, at the same time holding the attitude about the importance of newer and better equipment? Vacation travel - which oftentimes includes golf - is sharply down.
Perhaps the high end of the golf market is bucking the statistics of the broader market. Is attitude important in the face of reality? Probably. Why?
In spite of the economy, there are still significant opportunities for sports/leisure brands to embrace their target audience...whether they can be found playing a round at their private club or working out at the local community gym. It seems that especially now, a good strategy for leisure brands would be building communities of "fans" by engaging with customers/prospects through both on- and off-line marketing initiatives. With online, sports/leisure brands can use social networking sites like Facebook, Twitter and YouTube to generate increased exposure. Most importantly, they can then drive traffic back to their websites where fans can interact more deeply with content – and each other- by uploading their own pictures and videos or leaving comments. This strategy will help these brands build stronger relationships with their customers that can outlast any economic crisis.