6.4. SR 12-05-2005 - Laserfiche WebLink

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MARKET ANAL VSIS On a national basis in 1990 there were 11,178 golf courses for 23 million golfers. By 2003, course supply had increased to 14,827 or 32 percent with the majority of that increase coming in daily-fee facilities. Meanwhile, the number of golfers rose to 27.4 million, just 15 percent. Rounds per year in the U.S. have shrunk from the all time high of 518 million in 2000 to 495 million in 2003. The chart below illustrates the national golf market trend through the early 2000's: Demand 2000 2001 +/- 2002 +/- 2003 +/- Golfers (in millions) 25.4 25.8 2% 26.2 2% 27.4 5% Rounds (in millions) 518.4 518.1 (0%) 502.4 (3%) 494.9 (1%) Supply 18 Hole Equivalents 14,268 14,549 2% 14,725 1% 14,827 1% Source: National Go. Foundation Within the Minneapolis/Saint Paul metropolitan area, demand and supply factors have caused a parallel downturn in the golf market. Metro population growth from 1990 to 2004 increased by 567,000 people or 22 percent. The metro supply of golf holes meanwhile increased by 954 holes or 44 percent. Supply has clearly out paced demand in the market causing less rounds available per golf course. In addition, a significant portion of metro population growth has occurred in minority segments that are characterized by low golf participation rates. Also as the area population ages, there will continue to be more senior golfers in the market. This segment by nature demands discounted senior rates making the protection of core green fees more and more problematic. On the supply side, private owners of public golf courses in the metropolitan area will continue to take advantage of rising land values, liquidating their golf businesses and selling the land for residential or commercial development. Government units will be largely unable to stop these transactions from either a legal or financial perspective. In addition, development of new golf courses by both the private and public sectors has ceased due to market factors, land costs, and financial challenges. As a consequence, the metro golf market is experiencing a decrease in the supply of public courses. While the condition of the national and metro golf markets has declined, the condition of the localized golf market is more critical for the future of this golf course investment. The chart below summarizes key local market data for the City of Elk River and Sherburne County: City of Elk River 2000 2005 +/- 2010 +/- 2020 +/- Population 16,447 19,112 16% 21,611 13% 26,313 22% Sherburne County Population 62,797 75,890 21% 86,350 14% 105,630 22% Households 21,581 26,020 21% 30,530 17% 38,920 27% Age-5to19 16,370 18,450 13% 19,660 7% 22,620 15% Age - 60 to 79 4,964 6,210 25% 8,270 33% 14,430 74% Source: Minnesota Decartmenl of Plannino Population growth is the main indicator of future demand for golf. With the projected growth.trends shown, this market area must be considered excellent for future golf participation. In addition, forecast growth in the senior and junior golfer age groups is also an excellent indicator for this profile of golf facility. By 2020, the 60 to 79 age bracket will increase by 8,220 potential senior golfers and comprise close to 14 percent of the overall county population. The number of potential junior golfers also increases in the time period by 4,170, comprising 21 percent of the population in 2020. 2