Golf is a boom for Nevada and course ownership and management are working together to spread how vital golf is to the state’s overall success
In our last issue, we shone a spotlight on the economic impact the business of golf creates in Nevada.
The final tally? Pretty staggering statistics to be sure.
In 2018, Nevada’s golf industry generated the following:
- $1.242 billion of direct economic activity.
- $1.981 billion of direct, indirect, and induced economic output.
- 17,505 direct, indirect, and induced jobs.
- $701.3 million in wages and benefits.
- $138.6 million in state and local tax revenue.
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But many golf industry experts, despite the impressive statistics, believe that the industry doesn’t earn the respect that it deserves. At a national level, the WE ARE GOLF organization was created to help with these issues.
According to WE ARE GOLF, “Golf–a major industry with a positive impact on America’s economic, environment and social agendas – remains misunderstood. WE ARE GOLF is a coalition to tell the true story of golf. Not just the game, but the stories of the hardworking men and women who make it the greatest sport in the world and whose livelihoods depend on it.”
WE ARE GOLF is a coalition of golf’s leading organizations including the Golf Course Superintendents Association, National Golf Course Owners Association, PGA TOUR, PGA of America, USGA, U.S. Golf Manufacturers Council and World Golf Foundation. WE ARE GOLF was formed in part because it had become clear the industry was misunderstood by too many elected officials. Longstanding perceptions of the game simply didn’t square with the facts. By focusing on those whose livelihoods are tied to the game, WE ARE GOLF has leveled the playing field for the thousands of small businesses that make up the industry.
At the local and state level, the Nevada Golf Alliance was created to mirror the national mission of WE ARE GOLF. The group of Nevada allied associations worked with WE ARE GOLF and Golf 20/20 to publish the recent economic impact study. Associations helping to fund and implement the study included the Southern Nevada Golf Association, the Northern Nevada Golf Association, the Nevada State Golf Association, the Nevada Golf Course Owners Association, the Southern Nevada Chapter of the Southwest Section of The PGA of America, the Northern Nevada Chapter of the Northern California Section of The PGA of America and the Southern Nevada Golf Course Superintendents Association of America.
The summary of the impact report stated the following:
Nevada is a small state of 3 million people that hits above its weight in golf facility operations (estimated at $301.0 million) due to its large number of golf resorts (18 resorts) and golf rounds generated by visitors. Beyond the direct operating expenditures and capital investments made by Nevada’s 88 golf facilities (which manage 98.5 18-hole equivalent courses), the game of golf drives significant economic activity across the State of Nevada.
Jenny Ozawa served as one of the primary analysts and executed the study.
“For a state of 3 million people, a lot of golf is played in Nevada due to the large number of visitors and partial-year residents who play golf,” Ozawa says. “It’s easy to see how golf complements the state’s gaming, dining, entertainment, and other outdoor recreational activities that attract so many visitors year-round. Based on my work with several states over the past 15 years, I’d say that golf facilities want to be viewed as small businesses that employ people, attract visitors, and support local communities by providing a place for outdoor recreation and giving back by hosting charitable events.”
Any way you drive the ball down the fairway, the industry of golf in the Silver state is meaningful and a key economic indicator to the overall growth and health of the economy and the state golf industry is doing what it can to increase the impact and capitalize on certain growth indicators.
Nationally golf is also a major player. A study released by the World Golf Foundation in 2018 revealed that the overall United States golf industry generated $84.1 billion in direct economic impact which was up 22 percent since 2011.
And according to a 2018 National Golf Foundation study, total golf participation climbed to 33.5 million from 32.1 million when factoring in increasingly popular off-course forms of the game such as Topgolf, Drive Shack and indoor simulators. Almost one in every nine Americans plays golf in some form, more than participate in sports such as basketball, tennis, baseball and skiing. Golf is the number one pay-for-play sport in the United States.
In part one of this summary of the business of Nevada golf that was published in the last issue, we reviewed the overall impact of golf, but in part two we focus on three unique segments of the study: charitable impact, golf course real estate and tourism.
Charitable Events -$37 million in proceeds generated through golf tournaments
Report findings:
Charitable golf events serve as important fundraisers for many state and local charitable organizations. In 2018, Nevada golf facilities hosted charitable events that raised $37.0 million in charitable proceeds for beneficiary organizations. This includes charitable monies raised at both championship events and at the club level. At the club level, major 2018 fundraisers included the Coaches vs. Cancer Event at Shadow Creek and Southern Highlands, which raised $1 million for the American Cancer Society; the Governor’s Black-Tie Event at Southern Highlands, which raised over $1 million for Assistance League of Las Vegas, Discovery Children’s Museum, Opportunity Village, and several others; the 8th Annual Red Rock Classic, which raised over $100,000 for Operation Homefront Nevada, which provides short-term and critical assistance to military families and wounded warriors; the Colliers International Links for Life Charity Golf Tournament at Siena Golf Club, which raised more than $130,000 for several children’s charities in Southern Nevada; and HELP of Southern Nevada Golfer’s Roundup at Cascata Golf Club, which raised $60,000 for outreach and homeless shelter and services for youth and adults. Many Nevada golf clubs generate smaller, but high-impact funds for local hospitals, schools, youth development organizations, college scholarships, medical research, etc.
Perspective:
Dozens of charities organize golf tournaments to raise money and awareness for worthy causes and golf course owners and staff donate thousands of golf rounds annually to be used as auction items or in others ways to create revenue for charitable groups.
Real Estate – New golf home construction generated $166.8 million in 2018
Report findings:
The scenic, walkable green spaces and recreational opportunities provided by golf courses make them a key amenity in many residential communities. There were an estimated 42 golf communities in Nevada in 2018, down slightly from 44 golf communities in 2010. In 2018, Nevada’s real estate market, which includes new phases of development in new and existing golf communities, was experiencing strong growth driven by job growth and population growth. New golf home construction generated $166.8 million in 2018. TEConomy identified new construction activity at Sun City Mesquite at Conestoga Golf Club in Mesquite; Lake Las Vegas at Reflection Bay Golf Club; The Summit at The Summit Golf Club in Las Vegas; Tuscany Village at Chimera Golf Club in Henderson; and The Pointe and Wintercreek developments at Somersett Golf and Country Club in Reno; among others.
The number of new golf homes constructed in these communities in 2018 ranged from 15 to 175 new homes. The Golf Real Estate segment also estimates the “golf” premium associated with golf communities. TEConomy estimated the “golf” premium associated with these 42 developments to be $159.7 million. The premium is generated by the sale of existing golf homes and reflects the additional amount a buyer is willing to pay to purchase a home or property located within a golf community. The value of golf homes has rebounded since the recession, and the pace of sales of existing homes relative to the total stock of golf homes is also up.
Perspective:
In the World Golf Foundation study, it was reported that new golf home construction in the United States, which closely tracks national trends, climbed to $7.2 billion after dropping to $3.1 billion in 2011.
“In many states, existing golf communities are largely built out and new golf communities are being developed at a slower rate,” Ozawa says. “During our study, we identified 5 golf courses with active new home construction ranging from 15 to 175 homes. That reflects the state’s population growth, but also the fact that there is demand for golf as a key amenity in these new developments.”
A reality in this day and age is the closure of golf courses, an occurrence that has hit Nevada, but the overall impact has been positive for overall living and the community.
“I’m a golfer and most golfers dream about living on a golf course at one time or another, but in these times, prospective buyers are a little more hesitant to purchase a home in a golf course community because of the closures,” says Keith Lynam, Nevada Reators President. “We in the industry advise people to check the HOA bylaws and property deeds prior to buying to make sure they understand everything.
“However, there is no denying the terrific lifestyle of a golf course community. It’s a beautiful setting and there are usually many great amenities and the social component is rewarding as well. Even non-golfers enjoy living within a golf course community.”
Golf Tourism – Golf trips and vacations to Nevada generated $744.3
Report findings:
Golf is a popular outdoor recreational activity that complements other activities and attractions that draw visitors and partial year residents. Nevada has one of the highest percentages of golf resorts in the U.S.: 20% of Nevada’s 88 golf facilities are golf resorts based on their relatively high share of non-resident rounds. Nevada hosts two PGA TOUR events each year—the Shriners Hospitals for Children Open and the Barracuda Championship. The Shriners Open attracts over 40,000 spectators. In addition, junior, senior, amateur, and member-guest tournaments also attract Nevada residents and non-residents to different parts of the state. In 2018, TEConomy estimates that tourism expenditures stemming from travelers who played golf while on a trip or vacation generated $744.3 million.
Perspective:
Also in the World Golf Foundation study, it was reported that overall the United States golf tourism industry generated an economic impact of $33.3 billion up from $20.6 billion in 2011. Throughout Nevada, golf courses and resorts are destinations for tourists who travel from around the world to play golf in Nevada.
Recently the golf course at the Wynn Hotel and Resort was reopened after being closed for a couple years to make room for convention space and a possibly Paradise Park lagoon project. Interestingly, part of the reasoning to return the course back to action was because of the financial impact felt throughout the resort.
“Not only does that golf course make money on its own, but we’ve underestimated the impact that it has on our domestic casino business, allowing our host and our team to run events, special events, and run programs that will continue to enhance our casino play,” Wynn CEO Matt Maddox said during a January 2019 earnings call.
Just more proof about the overall impact the golf industry can make on a variety of industries.
“During the past 12 months, Southern Nevada attracted roughly 45 million visitors and attracting that many people year in and year out requires a deep and diverse level of services and amenity base,” says Jeremy Aguero, a principal at Las Vegas Applied Analysys, a leading firm in regards to business indicators. “Special events and participant activities (i.e., experiences) have become an increasing primary motivation for visitors to the region.”
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Editor’s note: The Nevada golf economic impact report was prepared by TEConomy Partners, LLC in agreement with GOLF 20/20, the Southern Nevada Golf Association, the Northern Nevada Golf Association, the Nevada State Golf Association, the Nevada Golf Course Owners Association, the Southern Nevada Chapter of the Southwest Section of The PGA of America, the Northern Nevada Chapter of the Northern California Section of The PGA of America, and the Southern Nevada Golf Course Superintendents Association of America. In addition, support for this report comes from the following allied national golf organizations: CMAA, GCSAA, LPGA, NGCOA, PGA of America, PGA TOUR, and USGA. The Nevada Golf Economic Impact Study was conducted by Jennifer Ozawa, Peter Ryan, Marty Grueber, and Dylan Yetter at TEConomy Partners, LLC with support from Nevada’s Allied Golf Associations.
SIDEBAR
CORE INDUSTRIES (millions)
Golf Facility Operations $301.0
Golf Course Capital Investments (investment and new construction) $15.1
Golf-Related Supplies $42.0
Major Golf Tournaments and Associations $11.4
Golf Charitable Events $37.0
Total Core Industries $406.5
ENABLED INDUSTRIES
Golf Tourism $744.3
Golf Real Estate (new home construction and realized premium) $326.4
Total Enabled Industries $1,070.7
TOTAL GOLF ECONOMY $1,477.1
TOTAL DIRECT IMPACT FOR IMPACT ANALYSIS $1,242.5
Note: * Total economic impact is calculated on the total direct impact.
