Two possible explanations came to my mind when I heard of Streamsong Resort‘s sale by The Mosaic Company to Lone Windmill LLC, a subsidiary of Kemper Sports Management LLC.
Option #1: The Mosaic Company wants to focus on its core business (concentrated phosphate and potash production). Although they are not the only company that got involved in the golf club business (see JCB’s JCB Golf and Country Club in the UK).
Mosaic intends to use approximately a quarter of the proceeds of the sale to provide long-term funding for the company’s global community investment activities.
Option #2: Due to the good shape of the golf club industry in the U.S. The Mosaic Company was able to sell the Streamsong Resort (7,000 acres of land) for a very good price.
It is also a great win for Lone Windmill LLC, a subsidiary of Kemper Sports Management LLC. to expand its portfolio with a Ryder Cup venue. The purchase price for the resort and real estate was $160 million (cca. 150 million EUR).
Presumably, Kemper Sports is also expecting that the increased interest in golf will carry forward.
Chicago-based KemperSports has managed the golf business at Streamsong Resort since the resort opened in 2012, and it has managed the entire resort for the past two years as part of its KemperDestinations division.
Did you know that Streamsong Resort is the only location on Earth where you can find golf courses by Bill Coore and Ben Crenshaw, Tom Doak, and Gil Hanse and Jim Wagner within one golf resort?
Streamsong Resort sale vs the state of U.S. golf courses
The National Golf Foundation says that only cca. 95 golf courses were closed in 2022. In 2019 it was around 275. Just over 130 courses closed in 2021, down 53% from 2 years ago.
IBISWorld is expecting the market size of the Golf Courses & Country Clubs industry is expected to increase by 1.8% in 2023. This industry value – according to Statista – is $26.7bn.
Another National Golf Foundation finding in December 2022:
- The number of new US golf courses currently under construction has increased more than 55% over the recent 3-year pre-pandemic average.
- The NGF is currently tracking 54 new courses under construction and another 38 in the planning stages.
Meanwhile, in 2021 there were 25.1 million golfers in the U.S. The last time when there were such a big number of golfers was in 2012: 25.3 million.
The big challenge for golf clubs will be retaining the newcomers and the existing golf club members and guests in 2023. I believe existing golf club customers are more likely to try new services of the golf club and spend more.
Customer Lifetime Value
This is where the importance of customer lifetime value (CLV) comes into play again. The customer lifetime value is a predictive indicator that aims to quantify the total worth of a customer over their entire relationship with your golf club.
It is a very good way to maximize the efficiency of your customer experience development efforts.
Customer lifetime value will also help you to demonstrate the economic value of your investment. At the same time, we should view CLV in terms of the value of the customer.