This morning, after returning from an assignment in Florida, I visited my local bank to have a document notarized. I had to wait outside. Fortunately, it was a beautiful morning, but the “main drag” was eerily quiet.
Just one week ago, we were beginning to feel the immediate effects of the Coronavirus pandemic (COVID-19) and its impact on our daily lives. I raised questions in my BLOG then, some of which can now be answered.
- Will even more people work from home? For now, absolutely. Many communities have instituted bans on opening non-essential businesses and employers (including some governmental bodies) have instituted remote working policies.
- Will people avoid large crowds? Since most large gatherings have been banned, yes. Also, many personal gatherings have been postponed or cancelled, such as birthday parties.
- What will become of major spectator sports if there are no spectators? At first, the NCAA tournament planned to simply play without fans. Then, it was cancelled. The Masters and the PGA Championship were postponed indefinitely and other sports’ seasons suspended indefinitely.
- Will office and retail real estate decline in value and demand due to working from home and even more online shopping if people avoid crowds? This is a tough question to answer. It might depend on the use of the property and it’s possible, as one article I read this morning said that values of some may increase because of cheaper financing.
- Will people patronize restaurants and bars? In some places, they’ve been ordered to close. In most others people are avoiding crowds.
- Will there be a fear of staying in hotels (and flying)? Having just stayed in a hotel Monday Night, I didn’t see that, but with limited flights and discouragement of travel, hotels are seeing sharp declines. During my recent trip, the airports were generally devoid of normal crowding and flights were less than half-full.
- What will be both short term and long term impacts on the economy at large and our businesses and jobs? Just this morning, I visited my bank to have a document notarized. I had to wait outside while they took care of it. All business was being done through the drive-through and customers weren’t allowed in the lobby. It is likely there will be significant long term impact.
Of course, all of these impact golf and are of great importance to us in the industry.
There have been several articles, including one in Golf Digest promoting the advantages of playing golf and maintaining “social distancing” to enable continued activity during the COVID-19 crisis. Despite golf’s assertion that it is not a high risk activity with respect to COVID-19, clubs and courses are either closing or limiting available services/activities in a variety of ways such as:
- Encouraging those who play to walk
- Avoid touching the flagstick
- Limiting bag services (“touches”)
- Waiving some fees
- Offering no food service or only limited take-out.
This is a very fluid situation, with many clubs implementing limitations and later closing completely. The National Club Association broadcast a Coronavirus Town Hall to help inform clubs and The National Golf Course Owners Association established a list of important things for owners on their website.
With the golf season just beginning in many parts of the country, and at the end of high season in southern climes, the impact on 2020 performance is likely to be significant. The courses still require maintenance, even if closed and the impact on course and club employees could be devastating.
What concerns me is that if people identify alternative activities, will they come back to golf when the courses open again and will some courses/clubs fail to survive the economic and public health crisis?
In the short term, it stands to reason that the value of golf courses and clubs previously in distress will be impacted the most due to potentially forced sales and bankruptcies. The chance for additional closures is likely increased. More stable clubs will survive, but there could also be impact, especially in the private club membership environment from resignations of members whose financial situation, as well as their employment is impacted by the economic fallout.
Every club’s situation will be different depending on a variety of factors. At Golf Property Analysts, we are available to respond to any questions or inquiries you may have and invite you to call (610-397-1818) or email (Larry@golfprop.com) if we can be of service during these most challenging of times. Let’s first of all make sure we all stay as safe as possible and get back on the links in short order.