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Golf Business Update 2012 and The Opportunity for Growth

Golf Business Update 2012 and The Opportunity for Growth . Rounds Played. Rounds Played – 2012 YTD (Up 5.7% Nationally) . (% Change from previous year through December). Mountain (+7.0%). West N Central (+7.6%). New England (+3.2%). East N Central (+10.8%). Pacific (+1.6%).

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Golf Business Update 2012 and The Opportunity for Growth

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  1. Golf Business Update 2012 and The Opportunity for Growth

  2. Rounds Played

  3. Rounds Played – 2012 YTD (Up 5.7% Nationally) (% Change from previous year through December) Mountain (+7.0%) West N Central (+7.6%) New England (+3.2%) East N Central (+10.8%) Pacific (+1.6%) Mid Atlantic (+10.1%) South Atlantic (+2.4%) +2.0% or higher +1.9% to -1.9% -2.0% or lower South Central (+5.0%) Source: Golf Datatech National Rounds Played Report in cooperation with PGA Performance Trak and the NGF.Based on a sample of approximately 4,000 reporting facilities

  4. Factors Underlying Jump in Rounds • Weather! • PGA Performance Trak reports playable days up over 6.5% nationally • Consumer Confidence and Spending • Consumer confidence & spending have been gradually rising as the recession driven “hunker down” mentality starts to fade

  5. Rounds Volume % Change Year Over Year 5.7% Source: Golf Datatech National Rounds Played Report

  6. Golf Participation

  7. Golf Participation in Canada

  8. Short Term Participant Trend Participants (MM) 30.0 29.8 29.5 28.6 27.1 26.1 25.7 44% 56% Source: NGF golf participation study

  9. Core Golfers in Canada

  10. Golf Course Development

  11. Growth of Golf Facilities Number of facilities Private Daily Fee Municipal Source: NGF

  12. Net Change in Supply Net Change = new course openings minus permanent closures (18HEQ), not factoring in courses closing for, or reopening from, renovations Source: NGF Facility Tracking

  13. Europe 7,014 21% International Golf Course Supply North America 18,410 54% Asia 4,425 13% Africa 865 3% South America 603 2% Oceania 2,014 6% TOTAL 33,331 199 Golfing Countries

  14. Looking Ahead

  15. Consumer Confidence Index 90 = Normal Index currently stands at 58.6 through January 2013 Source: The Conference Board

  16. Consumer Spending Improving Real Personal Consumption Expenditure Index [Index numbers, 2005=100] Seasonally adjusted Source: Bureau of Economic Analysis - Last Revised on: October 26, 2012

  17. The Opportunity For Growth

  18. Latent Demand Definition: People who express an interest in playing golf, but have not yet started. HOW INTERESTED: Very 6 MM Somewhat 19 MM A Little 47 MM Q: How interested are you in playing golf now? Percent of non-golfing population over age 6 Source: NGF/Synovate

  19. Latent Demand Segments Percent Of Latent Latent Very/Somewhat Interested Beginners (Never Played) Those With Some Experience (Never Committed)1 Former Committed Golfers2 12 47% 9 37% 4 16% 25 100% (1) Classified themselves as “Not” or “OK” (2) Classified themselves as “Fun”, “Hooked” or “Nut” Source: NGF/Synovate

  20. Demographics of Latent Demand • Golf’s latent demand skews: • Female (48% versus 19% of all golfers) • Average Income <$50K (44% versus 23% of all golfers) • Younger – Under 30(43% versus 28% of all golfers) Source: NGF/Synovate

  21. Lapsed Participants Definition: People age 18-69 who have not played in the past two years, but played at some point in the past Lapsed Participants 21.5 Million Lifetime golf experience of Nots and OKs: Played 1-2: 31% Played 3-9: 42% Played 10+: 27% Source: NGF/Synovate

  22. Demographics of Lapsed Participants • Lapsed participants skew: • Female (41% versus 19% of all golfers) • Average Income <$50K (38% versus 23% of all golfers) Source: NGF/Synovate

  23. Understanding Commitment to GolfFrom the “Nuts” to the “Nots”

  24. Traditional View 25.7 Million Golfers 11.3 M OCCASIONAL (1-7 Rounds) 14.4 M CORE (8+ Rounds) • 6% of Rounds • 7% of Spend • 94% of Rounds • 93% of Spend *Average among those who keep score (79% of occasional; 95% of core) Source: NGF/Synovate

  25. Commitment Levels NUTS HOOKED CASUAL FRINGE NOTS I’m a “golf nut,” I love the game and it’s my favorite activity I’m “hooked,” it’s one of my favorite things to do I’m a “casual” golfer – it’s one of several ways I like to spend my recreational time Golf is OK, but I most often choose to do something else with my recreational time I don’t really consider myself a golfer, I play rarely and usually only at the urging of others

  26. Impact of Commitment 25.7 Million Golfers * Percent who say they will be playing in 2 years (Top 2 Box) unless physically unable Source: NGF/Synovate

  27. Frequency vs. Commitment Segments OCCASIONAL (1-7 Rounds) CORE (8+ Rounds) Commitment Category Commitment Category Fringe Fringe Casual Casual Source: NGF/Synovate

  28. Attraction to the Game Reasons golfers like golf: % mentioned as “one of the main reasons I like golf” Source: NGF/Synovate

  29. Demographics Source: NGF/Synovate

  30. The Underpinnings of Commitment Correlation (r) (with Commitment) Completely Agree (5 on a 5 point scale) COMPETENCE .46 .42 Hooked Casual Fringe COMFORT .42 .42 Source: NGF/Synovate

  31. Competence & Comfort Lead to Retention “Comfort” Index by Retention Likelihood* * Likelihood to be playing 2 years from now Competence/Comfort factors scored and indexed to Hooked Golfers (100) Source: NGF/Synovate

  32. It Comes Down to Having Fun % Top 3 Box (8-10) FUN COMMITMENT Q. All things considered, how much FUN is golf for you? (0-10 Scale; 10 = Really Fun) Source: NGF/Synovate

  33. … and Perceiving Value Value Rating Fun Rating Source: NGF/Synovate

  34. Commitment = Prioritization AVERAGE COMMITMENT $86K $84K $88K $73K $92K Avg. Income Source: NGF/Synovate

  35. Implications for Growing the Game

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