Arizona golf industry swinging and missing during economic downturn

The lovely desert oasis that is Arizona has long been known as a golf haven. Until recent years, the vibrant green colors of the fairway paralleled the boatloads of money the industry pulled in.

 With hundreds of golf courses scattered across the desert, the golf industry has long since been a pivotal force behind Arizona’s economy. With the economic downturn, revenue has dipped for various reasons, causing certain courses to struggle and city councils to explore alternative options to increase revenue and boost the economy.

According to the National Golf Federation, from 2000-2011 there was a drop of 10 percent in the amount of golfers who played per year overall.

If not remedied, the golf industry’s decline in the state will inevitably continue. Phoenix and Scottsdale are experiencing the economic struggles, but Tucson has gotten it the worst.

 

 “In Phoenix, there has been a long public process to determine the future of city run golf courses,” said David Urbinato, public information officer of the Phoenix Parks and Recreation Department. “They have accumulated a large operating deficit in the past 10 years and the city council will be considering many steps to address this.”

 

 In 2006, Arizona State University conducted a study on the economic impacts and environmental aspects of the Arizona golf industry. According to the study, the state of Arizona generated slightly over $800 million in 2006.

 As seen in the graph showing total revenue by region, Maricopa County is by far the most profitable area of golf revenue in the state. Pima County and the rest of Southern Arizona have struggled behind.

 In Tucson, private and public courses are both struggling. It has gotten so bad that the city has kicked around the idea of shutting down the local Fred Enke golf course in hopes of turning it into a park.

screen shot 2013-02-18 at 2.50.16 amenke golf-1As for the process of closing a golf course, it is a much more elongated process than one might expect. The city voted unanimously to close it, but in order to turn the course into a park the city must get permission from the National Park Service, which takes at least six months.

For the time being, Parks and Recreation is working on a request for proposal, (rfp), to give City Council a concrete plan for what they intend on doing.

 The city has called in the advisement of Bracy Tucker Brown & Valanzano, a consulting firm that helps clients implement strategies to increase effectiveness in Federal policies.

 “We have indeed received correspondence from Bracy Tucker with regard to their analysis of the national parks services that they consider any change of use to the Fred Enke golf course to be a significant change in use,” said Fred Gray, Tucson City Parks and Recreation Director.

Gray stressed the importance of reaching out to the community to get a better understanding for what kind of park would be of best use to them, and that this must be done before presenting City Council with a request for proposal.

 “There has to be a meeting with regard to gaining community input, with regard to what they want to see and the future use of Fred Enke,” said Gray.

In fiscal 2011, Tucson City Golf experienced a $1.2 million deficit. It stands to get much worse if the city fails to maintain highly accredited Accenture Match Play Championship, coming up on Feb. 18-24.

 With net revenues of $28 billion in 2012, Accenture brings the top 64 golfers in the world to Southern Arizona and broadcasts them to 224 countries all over the world. With all of the glam and glory, the event brings in a heavy amount of capital and tourism to Tucson. Annually, it brings in roughly between $75 million to $100 million.

 Since Accenture moved to Tucson in 2007, close to $9 million has been raised for local charities due to the success of the tournament.

 With a very limited marketing budget, Tucson finds itself in a catch-22. It is difficult to bring as many people as possible to the event, which is the only way to keep revenue up and keep the event in Tucson.

 A disadvantage in the city is that courses are subsidized and do not bring in taxpayer money. Phoenix does the exact opposite, as their six courses have racked up nearly $15 million in debt over the past year even without taxpayer money.

“We’ve been aggressive in controlling costs, we can’t control how many people play,” said Gray.

 Gray presented a good point, noting how the economy has simply put a damper on people’s desire to go golfing. Memberships are down across the state due to high costs of playing a simple 18 holes.

 The conundrum at hand is crippling the golf industry in the state. Golf is much more than a luxury. It is a business the city of Tucson and the entire state as a whole cannot afford to lose.

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