Mate certainly isn’t alone in believing that the number of courses in some parts of the state, including the Denver area, has reached the saturation point.
“The Denver metro area probably has enough inventory for now,” said Redstone International president Ric Buckton, a Denver-based developer, planner and designer for golf courses and golf course communities. “It has a lot of good courses — good daily-fee and high-end clubs. (Supply) has caught up to demand.
“That said, in the mountains I think there are opportunities for courses in second-home markets, though the I-70 corridor probably has enough.”
In all, according to the CGA, there are 256 separate golf facilities in Colorado: 159 public, 58 private, 22 semi-private, 15 resort and two military.
“It’s cyclical; we’re going to reach the point where supply and demand (are more evened out),” Mate said. “But I don’t think we’ll see again — at least not in the next 30 years or so — where we’ll be adding eight, 10 or 12 courses per year.”
The recent trend toward a significant slowdown in the building of new courses is by no means unique to Colorado. Indeed, nationally these days, just about as many courses close as open. National Golf Foundation statistics note that the number of golf facilities in the U.S. grew by about 3,000 from 1990 to 2003, but has remained basically the same since 2003. Nationally speaking, courses have closed because of financial problems, but Colorado has seen little of that.
“We were adding 300 courses a year (net nationwide) for most of the 1990s; now we’re at 0 (net),” Mate said. “In the late 1980s, they said we’d have to build a course a day (to meet demand). So that tap was turned on, and it took a long time to turn it off.”
With new courses entering the fray, many facilities have experienced a significant decrease in the number of rounds played per year compared to the 1990s. For instance, Mate notes that the CGA-owned Mira Vista course in Aurora hosted about 50,000 rounds annually in mid-1990s, but that number dropped to about 40,000 a decade later. The Mira Vista course now is being totally redesigned and is scheduled to reopen under a new name next spring.
Mate believes the real estate market has been part of the problem in that developers sometimes build courses as an enticement for home buyers, regardless of the demand (or lack thereof) for such courses strictly from a golf standpoint.
“Almost every course that’s been built in the last 10 to 15 years, the course is there because of the real estate,” Mate said. “What we’re seeing is golf and real estate connected at the hip. If real estate was still hot, I think we’d still be building courses just as quick. The lead is the real estate developer; the golf course is secondary, though it’s an important part of the equation.”
Buckton sees a definite link between problems in the real estate market and the slowdown in courses coming online.
“It’s real estate driven,” Buckton said. “Courses are there to make money for real estate. I don’t think there will be a tremendous demand for a couple of years.”
Meanwhile, while courses are being added to the mix, the number of rounds played in Colorado is actually down slightly compared to 2003. The CGA’s 2007 public course survey reveals 1.83 million rounds were played in the Denver metro area last year. That number was 1.875 million in 2003, 1.9 million in 2004, 1.94 million in 2005, and 1.92 million in 2006. Mate attributes the slight slip last year to the extraordinarily snowy winter of 2006-07.
Most of the Colorado courses that have been built in recent years are located outside of the Denver metro area and the great majority are private or semi-private. The only public course, per se, that has opened in the metro area since the beginning of 2004 has been Heritage Todd Creek in Thornton.
“In my mind public and private is irrelevant (in this regard) because they’re all competing with one another,” Mate said. “People in private clubs can drop out or rethink their membership. They may think, ‘I could pay as you go and play a great variety of (public and semi-private clubs) or I can plunk down a bunch of money at a private club.’ Private clubs that think their only competition is other private clubs just don’t get it.”
As for few courses being constructed these days in the Denver metro region, Mate feels it’s simply a matter of the area being largely built out, with few large tracts of open land available close to Denver.
“I’m sure that’s a welcome relief” for existing area course operators, Mate said. “Every year they’ve had to set extra places at the table for new guys. It’s the perfect environment for discounting and marketing ideas and a lot of head-scratching. It’s good for the consumer.”
Time for a New Course of Action?
Construction of new golf courses slowing with much of state hitting saturation point
By Gary Baines
Colorado Golf Journal, Friday, April 18, 2008
For a guy whose job depends on the well-being of the game of golf, it might seem like an incongruous thing to say, but Colorado Golf Association executive director Ed Mate thinks it would be best if no new courses were built in the state for roughly the next decade.
Given that the teeter-totter that is the law of supply and demand may be a little out of kilter these days — with more courses being added while the number of rounds played remains relatively unchanged — Mate thinks a timeout of sorts would be in the long-term interests of the game.
“A moratorium for a while would be the best thing,” he said. “We don’t need any more golf courses being built for the next 10 years. I don’t think we need anything new. It’s like when a guy gets a penalty (in a tournament) to protect the field; we need to protect the field here in the interest of golf.”
A competitive marketplace is certainly in the best interest of consumers — in this case , the golfing public. But Mate also sees that the situation has made it tough for golf course operators as competition gets more and more intense. For instance, Mate said per-round revenue from greens fees at public courses in the Denver metro area remained almost unchanged from 2003 to 2007, rising from $28.70 to $29.54 — less than three percent total in four years.
“That tells you how competitive a market it is out there,” Mate said. “It’s not like the fat and happy years of the mid-1980s and early ‘90s when courses could almost say, ‘If you don’t like it, tough, go somewhere else.’”
New courses are coming online in Colorado at nowhere near the numbers they were a decade ago, but they haven’t stopped. Two new courses will open in Colorado this year, according to the CGA — the private Cornerstone Club, a Greg Norman design in Montrose; and the public Four Mile Ranch Golf Club in Canon City. Nine holes of the Cornerstone Club opened in 2007, but the full course will debut this year.
Assuming no complications for those newcomers, that would put the average number of new Colorado courses opening annually from 2002 through 2008 at 4.6. Comparatively, 10 courses per year, on average, opened in Colorado from 1997-2001. In each of the years 1999 and 2001, a dozen course came online. The only year in Colorado history in which more courses opened was 1972 (14).
