Page 16 - GBC Summer ENG 2021

Forecasting Green Fees Plus Carts for 2021
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Golf Business Canada
Source: 2021 NGCOA Canada Pulse Report, presented by Deluxe Payroll.
When comparing to 2020, what are you forecasting your green fee plus cart fee revenues for 2021 to be?
confidence normally drives large personal investments as well, as evidenced by the robust housing market in recent months, for example.
Employment is also a big driver of the economy and related spending. It took a serious hit in 2020. Canada’s unemployment rate slipped all the way to 9.5%, with Alberta and Newfoundland partic- ularly hard hit at 11.4% and 13.8% respectfully. The good news for this golf season is that the job market in every province is showing significant gains, with the national unemployment rate improving to 7.5%.
In March, for example, Statis- tics Canada reported 303,100 jobs added, following 259,200 in February. This trend is triple what economists were predicting earlier in the year. In fact, most are now forecasting continued job growth into 2022 as the economy eventu- ally emerges from the impact of COVID-19. “I think the main message is that the Canadian economy and jobs can recover quickly when things do open up again”, stated Doug Porter, chief economist at Bank of Montreal.
Ironically, employment gains can impact the golf industry in both directions. More jobs ensures that more people can afford to golf. But as that situation improves, the
So, the majority of Canadian golf course operators are projecting further increases in revenues and necessary increases in expenses to accommodate that growth. On balance, their collective “crystal ball” shows considerable optimism that revenues will outpace those incremental expenses and the bottom line for 2021 will be a net positive gain on top of the success- ful financial results that most clubs experienced in 2020.
But, are those projections reason- able, or just wishful thinking? Let’s go a little deeper...
MACRO-ECONOMICS: KEY INDICATORS OF GOLF’S ODDS FOR 2021
If Canada’s somewhat fragile econ- omy rebounds strongly through 2021, golf can further benefit from the increased spending associated with such a recovery.
So, Golf Business Canada researched various credible sources whose economists are making 2021 forecasts, and compiled the follow- ing summary of key indicators that could influence how golfer spending plays out this season.
Disposable income is a good place to start. One full year into the pandemic, the average had increased by $1,800 per adult according to the Bank of Canada deputy governor, Lawrence Schembri. Meanwhile, their
regular spending pattern declined by $4,000 per person as restric- tions were imposed. The net effect adds up to about $180 billion in unexpected savings and a potential spending spree waiting to happen. Golf courses are likely to have a great opportunity to tap into that rare level of pent-up demand.
Consumer confidence is a closely related metric. Bloomberg Nanos surveys Canadians regularly to measure the current Consumer Confidence Index (CCI). The higher the Index, the better Canadians feel about their employment, income, financial stability and their prospects for the near future. As the 2021 golf season opened, their CCI was hovering between 58 and 60 on a scale where 50 is the normal. It had hit a high of 63.7 at the moment the vaccines began rolling out, representing the strongest consumer confidence since 2007.
For the record, Canada’s pre-pandemic CCI was 56, which was also signaling a strong economy but then plunged by a record 1/3. It has now fully recovered and surpassed that pre-pandemic consumer confidence, further evidence that golfers, and potential new golfers, are willing to spend this year. Consumer