There were already 11 other golf courses nearby when Don MacKay set about to build Muskoka Highlands in 1992. At the time, it wasn’t clear whether Ontario’s cottage country, two hours north of Toronto, could support a 12th course, but MacKay believed in his business plan—a low-key, public links-style facility—and convinced a cautious banker to loan him the money. It may have been the last time a proposed golf course received such serious scrutiny in Canada.
Since then, MacKay says more than 18 courses have been built—and bankrolled—within a few hours’ drive. But there aren’t nearly enough people to slice, hook and duff balls along all those freshly clipped fairways. Business is hurting and competition between operators is growing fierce. “If you talk to a golfer, he’ll say the game of golf is fine,” MacKay says. “But if you talk to a golf course owner, he will say the business of golf is suffering because we overbuilt.”
The numbers are stunning. There are an estimated 2,400 golf courses across the country, while Statistics Canada pegs the number of golfers in Canada at about 1.5 million. That’s one course for every 625 players, or 14,500 Canadians—among the highest number per capita in the world. Moreover, Canadians appear to be playing less golf than they used to. A recent study by the National Allied Golf Associations, or NAGA, found that the number of rounds played on the average Canadian course has dropped 10 per cent over the past five years, with the blame falling on everything from waning interest to the time commitment required.
WATCH: For a first-hand glimpse of Canada’s golf course glut, take a quick tour over Toronto using Google Earth’s flight simulator.
In the U.S., a painful industry shakeout is already under way. Equipment sales are down, closures of golf courses are commonplace and an estimated 400,000 players left the sport last year alone. In Canada, meanwhile, clubs are slashing fees in a bid to stay in the black, with some more successful than others. The award-winning Sagebrush Golf & Sporting Club near Merritt, B.C., recently applied to put itself into receivership, following in the footsteps of others such as Tobiano (Kamloops), Tower Ranch (Kelowna) and the Rise (Vernon). In Ontario, the private York Downs Golf & Country Club north of Toronto put itself up for sale to developers (although the club says it’s not in any financial trouble), while a candidate seeking Toronto’s mayoralty wants to turn a money-losing municipal course in the east end into a park to ease the taxpayer burden.
How did the industry end up in such an obvious hazard? Overly optimistic predictions about how many retired Baby Boomers would hit the links was part of it. But the real culprit was golf’s unhealthy relationship with North America’s overheated real estate market. Developers can sell houses for far more money if they back onto a golf course and the fancier the golf course, the bigger the premium. But not everyone who wants to live next to a golf course plays golf—so many courses sit relatively empty. Egos also play a role. “I watched in astonishment as people poured tens of millions into a course that they probably knew they weren’t going to get their money out of,” says MacKay, who once worked for a company that built golf courses.
Now the industry is scrambling to find its way back out of the rough. Some operators have cut back on watering and maintenance, allowing courses to exist in a more “natural” state. Others are grasping for new ways to sell a centuries-old game to a time-pressed audience, experimenting with faster-to-play courses and pay-as-you-go pricing. One course in B.C. is using eight-inch cups on the greens to make putting easier, while others propose going as big as 15 inches, roughly the size of a large pizza. Golf Digest raised eyebrows this year when it featured a scantily dressed Paulina Gretzky on its cover—not because she’s a golfer, but because she happens to be engaged to one.
Perhaps the most desperate response is to lure people to use golf courses for sports other than golf. MacKay, for one, promotes something called footgolf, a sort of golf-soccer mash-up that involves kicking the ball down a fairway and trying to land it in a 21-inch hole. He’s unapologetic. “When 40 per cent of kids under 15 play soccer and [five per cent] play golf, you realize that you need to appeal to a different market,” he says. “We’ve got to put more people on this course. I don’t care if they’re flying kites or riding bikes. We have to get more people because golf is golf and there are only so many golfers out there.”
In the past, lobbyists might have courted government officials by taking them out for a round at a swanky golf club. Now, the golf courses themselves are lobbying for special treatment. NAGA officials recently visited Parliament Hill to demand that companies and their employees be able to claim golf rounds as an expense for tax purposes—something that hasn’t been allowed for decades. Jeff Calderwood, NAGA’s chair, says it’s a question of fairness, since other forms of entertainment, including meals and hockey tickets, are eligible for deductions of up to 50 per cent. But he doesn’t deny that golf is facing a crisis of its own making. “We’re somewhat victims of our own success,” he says, pointing to a study the group commissioned that concludes golf, all totalled, is worth $14.3 billion to the Canadian economy. “It’s been ‘build it and they will come’ for so many decades. We probably got a little bit ahead of ourselves.”
While Calderwood maintains that golf remains fundamentally healthy—“other sports would kill for the numbers we have”—NAGA’s study reveals why golf course operators are worried. NAGA considers the total population of Canadian golfers to be 5.7 million, meaning anyone who has ever picked up a club. However, only a quarter of them, or 1.5 million, are deemed “engaged,” meaning they play regularly. North America’s waning interest in golf has also been reflected in the sales of golf clubs and apparel, with companies such as Dick’s Sporting Goods, Callaway Golf and TaylorMade reporting bleak numbers in recent quarters.
The solution seems straightforward: Reach out to all those passive golfers and lure them onto the course. But it’s easier said than done. In our fast-paced, always connected world, most people don’t have the four or five hours needed to play 18 holes on a regular basis. And, unlike in the previous decade, there’s no Tiger Woods-sized celebrity to sell the game to an iPad generation. In fact, some now wonder if the industry squandered its biggest star by letting Woods define himself through lucrative endorsement deals with megabrands like Nike, Accenture, General Motors and PepsiCo—relationships that immediately soured when stories of Woods’s extramarital affairs emerged. “They did not use Woods to promote golf; they used him to promote professional golf, i.e., money,” writes James Corrigan, the Telegraph’s golf correspondent. “Instead of being the face for a worldwide initiative to get the kids on the fairways, he was the face for a sport laden with riches.”
Golf course design and construction also contributed to the problem. “I think that every course that was put up in the 1990s was probably put up with real estate, mine included,” MacKay says. But most developers are long gone once the houses are sold, leaving the expensive task of running and maintaining the golf course—which might not make financial sense on its own—to someone else. Some courses even ran into trouble before they were completed. In North Cowichan, on Vancouver Island, the Cliffs Over Maple Bay is a Greg Norman-designed course plus housing development first proposed more than a decade ago. The course was laid out, lots sold and houses built. But the developer failed to secure a source of water to keep the course irrigated. The result: Pricey homes backed onto a clear-cut forest, with no clear plan of what comes next. Even Woods’s design company, Tiger Woods Design, has faced difficulty with high-profile projects in the U.S. and overseas. To date, only one of the five courses listed on the company’s website looks to be nearing completion.
The U.S. housing crash similarly exposed the inherent weaknesses of the real estate model. Across the U.S., golf courses built as centrepieces of faltering real estate developments have been mothballed and are now being rezoned for residential construction. Canada, which has yet to experience a real estate downturn, is also facing pressure to replace fairways with driveways—but for different reasons. In Vancouver, for example, Mayor Gregor Robertson drew the ire of some golfers two years ago by suggesting municipal courses lease some of their land to developers to create room for affordable housing. On the other side of the country, a 2012 auditor general’s report showed Toronto’s five municipal courses face dwindling profits and may eventually need taxpayers’ support.
These days, most new courses are privately built as destination resorts (although real estate continues to be a key component in many projects). Cabot Links, near Inverness (population 2,500) on Nova Scotia’s Cape Breton Island opened as an 18-hole course in 2012 and was heralded as one of the country’s best. Now another 18-hole course, Cabot Cliffs, is being added at a cost of roughly $14 million—including an $8.25-million loan from the province. Steely nerved golfers will begin hitting tee shots over its craggy gorges and windswept ravines in 2015.
While such projects attract awards and tourists, they don’t encourage more people to take up the game. “The modus operandi has been to build bigger, tougher, longer courses,” says MacKay. “People want the big, spectacular views. It’s not so much about the playability; it’s more about how tough can I make it and how private can I make it.”
In fact, some courses seem to pride themselves on how few people avail themselves of their services—or, at least, they did. “A busy day for us is 10 foursomes on the course, and we consider ourselves 100 per cent full with 60 people,” the general manager of B.C.’s Sagebrush resort told the Vancouver Sun two years ago. “The consequence is people have a sense of freedom on the course without being pushed from behind or being delayed from in front. In today’s golfing world, quite understandably, that is a difficult thing to come by.” No wonder Sagebrush’s owners, carrying $35 million of debt, have hit a wall.
For those courses keen on keeping as many pairs of spikes clattering by the clubhouse as possible, everything is on the table. At Toronto’s Cedar Brae Golf & Country Club initiation fees are as little as $3,500 for new members—a fraction of what they were three decades ago. Other private clubs allow the public to play on certain days and have relaxed their dress codes to include jeans. Rules are increasingly becoming guidelines. Don’t like your lie? Move the ball. Hit a bad shot from the tee? Take out another ball and try again.
At Redwoods Golf Course, near Vancouver, Doug Hawley has gone further than most. This year, he’s outfitted the course with eight-inch holes on Tuesday nights (4.25 inches is the standard) in the hopes of making what may be the world’s most frustrating game easier to play. While traditionalists grumble, Hawley argues “so-called purists” are no strangers to cheating, even if they don’t acknowledge it. “They’re taking gimmes, they’re not playing by all the rules or completing the whole game,” he says. Besides, the advantage of bigger holes isn’t necessarily reflected on scorecards. It’s psychological. “A lot of the pressure is on the green, because that’s when the game becomes one of centimetres,” Hawley says. “So by making that easier, it takes the pressure off golfers and they tend to go for it a little more. They watch the pros make 30- or 40-foot putts, and now they think they can make them, too.” Has it worked? “I’m a lot busier on Tuesday.”
Back in Muskoka, MacKay is throwing tradition out the window by embracing footgolf. The game, first developed in Europe, appeals primarily to soccer fans looking for ways to hone their skills, or simply to people who like the idea of hanging out on a golf course without the headache of swatting around a tiny white ball. It’s played just like golf (minus the clubs and balls, of course) and usually involves 18 holes distributed over the fairways of a nine-hole golf course. MacKay acquired the rights to start a Canadian version of the American FootGolf League and says about 20 courses in Canada are considering adding footgolf to the mix.
When it comes to regular golf, MacKay is also tinkering with the industry’s pricing norms. At Muskoka Highlands, golfers can pay nine-, 12- and 18-hole rates, with plans to adopt a dynamic pricing system that will allow the golf course to sell green fees the same way airlines sell airfares: by using computer algorithms to figure out when demand is highest and charging more for those times.
Even golf course architects, those faceless monsters responsible for ruining otherwise impressive shots with ill-placed water holes, sand traps or leafy trees, are rethinking the way they go about their business. Neil Haworth is a Canadian golf course designer who spent most of his career in Asia, where he’s worked on some of the region’s top courses, including Shenzhen Golf Club in Guangzhou, China, and Sheshan International Golf Club near Shanghai. He recently completed a renovation project at the Parcours du Cerf golf course in Longueuil, Que., that involved transforming nine holes of a 36-hole facility into a new, faster-to-play 12-hole executive course, the first of its kind in the province.
Haworth says one way to appeal to a wider audience is a greater focus on forward tee boxes, which often lack the dramatic vistas or challenging obstacles that the back tees do. He also suggests golf courses adopt slower greens and fewer bunkers, which are expensive to maintain and “tend to catch the golfer you don’t need to catch, because he’s shooting 120 already.” A change in attitude is evident at the professional level, too. For the first time in recent memory, this year’s U.S. Open was held at a course without any rough. As part of a $2.5-million renovation, North Carolina’s Pinehurst Resort ripped out the lush, Augusta-style turf that edged the fairways on Pinehurst No. 2 and replaced it with sand, hardpan and brush. The new look was sold as a nod to its century-old heritage. “It’s the way it should be,” gushed two-time U.S. Open winner Curtis Strange. But an equally compelling reason for the makeover is what it will mean for the grounds crew: They need 150 million fewer litres of water each year to do their jobs. Which should free up time—and money—to cut soccer ball-sized holes into the fairways, should it come to that.