Tiger Woods spurred a golf boom 20 to 25 years ago. But the pandemic spurred a new boom in golf that is broader based and seems more sustainable for the golf industry.
Golf’s popularity remains after pandemic surge, good news for Bloomington-based Toro
Interest in golf surged during the pandemic but hasn’t retreated from the gains like other outdoor sports have, which is good for the golf industry, including Toro and local courses.
The Minnesota Star Tribune
September 14, 2024 at 4:45PM
Indeed, golf has fared better than the outdoor industry as a whole, which has retreated as post-pandemic consumers shifted spending back to other activities like dining and travel.
That’s good news for golf-related companies like Bloomington-based Toro, equipment and apparel makers and, of course, Minnesota’s golf courses.
Over the previous five to 10 years more courses have closed than opened, but long-term trends for golf are positive. The level of new golf course construction is at the highest point in a decade, according to the National Golf Foundation.
There are 16,000 golf courses in the United States, more than the number of Starbucks and McDonald’s locations.
Bloomington-based Toro Company benefits from new course construction and strong demand at existing courses.
Toro makes mowers and other grounds maintenance equipment, as well as irrigation systems for golf courses. In its third quarter results last week, Toro reported strong sales of golf equipment, helping the company report a 6.9% increase in third quarter revenue.
More traffic on courses requires more maintenance, said Edric Funk, Toro’s group vice president for golf, grounds and irrigation. “Generally speaking, it’s just about driving more revenue for our customers and giving them the opportunity to either expand their fleets or upgrade their fleets.”
In some ways Toro is still benefiting from the Tiger golf boom. According to Funk, 20 to 25 years is the typical life of a golf course irrigation system. But courses that are replacing equipment will benefit from technology investments Toro has made in irrigation products and in electric, connected and autonomous strategy.
Toro’s Lynx irrigation systems keep course superintendents and irrigation technicians more informed and updated on their systems with mobile and cloud-based computer systems.
“We’re working towards making our irrigation systems more connected with our equipment,” Funk said. “So you can envision a future state where they talk to one another and the irrigation system may automatically come on or turn off as equipment is approaching or leaving a particular area.”
Golf equipment and apparel companies are also benefiting from the new golf boom. Take Acushnet Holdings, a Massachusetts-based company that owns two big golf brands, Titleist and FootJoy, the latter a shoe and apparel line.
The consensus among analysts who cover Acushnet is that its annual revenue will grow to $2.6 billion in fiscal 2026, up 10.3% from 2023′s annual revenue of $2.3 billion.
“As the US population ages, we expect to see sustainable growth in rounds played, amplified by growth in new entrants, ensuring steady demand for golf (original equipment manufacturers) ahead,” Randal Konik, an analyst at Jeffries Group, wrote in a recent note about Acushnet.
Other outdoor activities — camping, hunting and fishing — haven’t maintained pandemic momentum as well as golf.
According to the U.S. Forest Service, the number of annual visitors to the Boundary Waters Canoe Area Wilderness peaked at 166,374 visitors in 2021. But in 2022 the number of annual visitors decreased 9% to 150,842 visits or pre-pandemic levels.
Data from the Minnesota Department of Natural Resources show that sales of hunting and fishing licenses have also decreased from pandemic peaks. Fishing license sales in Minnesota were 1.2 million in 2020 but had fallen 13% by 2023, and sales through Labor Day of this year are flat from the year before. Resident firearm and archery licenses for Minnesota deer hunters in 2023 totaled 406,289, down 7% from 2020.
The recreational vehicle industry had a huge spike during the pandemic, but it also has seen a downswing.
According to the Recreational Vehicle Industry Association, the total number of RV units shipped has slipped from a peak of 600,000 in 2021 to 313,174 in 2023 — the lowest level in 10 years.
But golfers continue to hit the links. The number of rounds played was up 1.3% through the end of July compared to the same time in 2023 — which was a record year, according to a recent report from the National Golf Foundation.
Mark Foley is the PGA professional at Keller Golf Course and Manitou Ridge Golf Course, two of Ramsey County’s four municipal golf courses. Heading into the pandemic, Foley thought Keller and Manitou would be lucky to do 70% of their normal business. Instead, business “went haywire, and it has not slowed one bit.” Foley said. “The appetite for this is amazingly good.”
At Ramsey County courses generally, rounds played did peak in 2021, but they haven’t slid back much. All four county courses — which also include Goodrich and Island Lake — saw rounds played increase between 15% and 37% from pre-pandemic levels during the 2023 season.
Business has been solid this year, too, despite heavy rainfall, Foley said. “We’re actually trending ahead of pace from last year, which is hard to believe.”
Foley said he’s seeing more women, families and people of color at the links. Ramsey County has helped by adding more forward tee boxes to its courses, responding to requests from women and younger and older golfers. Ramsey County has also increased the number of languages in its golf marketing materials.
“As far as the demographics of what’s gone on with golf, it has [undergone] a big, big change,” Foley said.
The two companies announced the agreement Friday evening. The terms are effective immediately.
