As we look for the hottest commercial real estate opportunities for 2022, we can’t help but lend a little extra attention to outdoor recreational facilities. While social distancing measures have certainly loosened since March of 2020, they likely will not be fully removed any time soon. As such, people will continue looking for fun outdoor activities that will keep them safe and in compliance with social distancing measures. Marinas are currently standing out as a very promising investment opportunity. How do golf clubs compare?
The Latest Trends in the Industry
When we refer to golf courses throughout this article, we’re speaking of golf clubs of all types, including public, private, semiprivate, miniature golf courses, as well as driving ranges. While social distancing measures have resulted in a 13% jump in golf club utilization in 2020, there are a few reasons to suspect that this rapid level of growth may not be sustainable over time:
- The number of new golf courses has been outpacing the number of new golfers
- Available leisure time is expected to stagnate
- The sport is often not the most attractive choice for younger athletes
- Larger clubs often receive more patronage than smaller clubs and turn a higher profit
Outlook for Golf Clubs
The four points above may seem to create a negative outlook for golf courses, but that is not entirely the case. While we wouldn’t say this is the most promising investment opportunity for 2022, there are a few reasons for optimism if this is an avenue you would like to explore. Golf club investors will likely continue riding the wave of popularity they have witnessed since the start of the pandemic, and apparel/ equipment sales will likely keep up as well. Additionally, the sport is most popular among households with a yearly income of $100,000 or greater. In the next five years, such households are expected to witness a 1% growth per year. IBISWorld estimates that industry revenue will likely increase around 1.3% over that timespan as well. The end results? An industry with a few positive trends that are expected to carry over throughout the next few years, even if it is not the most exciting opportunity available at this time.
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