Golf Resurgence Boosts Revenues for Resorts, Hotels
Simulators, Topgolf and golf-related concepts are bringing players back to the fairway.
Although golf’s popularity in the U.S. has not returned to its zenith prior to the Great Financial Crisis, new findings from CBRE suggest that the sport’s growing appeal is proving to be a boon for hoteliers and golf resorts. The firm analyzed the performance of 20 resorts with an average of 625 rooms between 2019 and 2023, finding that revenues have expanded significantly since the onset of the pandemic.
Occupancy rates, average daily rates, and gross profits at golf resorts did not decline as sharply as they did for other hotels during the pandemic. CBRE attributes this difference to the isolated, low-density nature of the resorts and the outdoor aspect of the sport, which likely attracted individuals seeking healthy alternatives.
“Since 2020, golf has experienced a resurgence,” the report stated. In 2023, the National Golf Foundation (NGF) reported 26.6 million rounds of golf played on U.S. courses, a 9.5% increase from 2019. Of even greater significance is the 115% rise in off-course participation, which includes driving ranges, simulators, and par-3 courses during the same period.
Instead of cannibalizing revenues from golf resorts, simulators, driving ranges, and concepts like Topgolf are drawing millennials back to the fairway. In 2023, total participation reached 45 million, representing a compound annual growth rate of 36% since 2019.
From 2019 to 2023, golf revenue per available room at the sampled resorts increased by 42%, outpacing the 27.7% rise in total operating revenue. On a per-occupied-room basis, golf revenue surged by 50.1%, compared to just a 35% increase in total revenue. In 2020 alone, golf revenue more than doubled on a per-occupied-room basis, despite the pandemic’s challenges, while total hotel revenue saw a modest 12.5% growth. This sharp rise reflects the growing proportion of golf enthusiasts among hotel guests and an uptick in local participation.
Looking ahead, CBRE said golf courses are poised to benefit from heightened demand. However, the industry will continue to face challenges such as limited new course development due to high construction costs, lack of available debt, and environmental factors. Despite these hurdles, the growing and diverse pool of new players signals a promising future for the sport.