Yahoo Finance’s Julie Hyman, Myles Udland, and Brian Sozzi speak with ClubCorp CEO David Pillsbury about the golfing industry.
BRIAN SOZZI: All right, it's not snowing everywhere in the US right now, and that means some of ClubCorp's golf courses may be filled with its share of duffers and low handicappers like Myles Udland. Let's welcome in ClubCorp CEO David Pillsbury for more intel on the company. David, good to speak with you this morning here. So your company, it was bought out in 2017 by Apollo, so no longer reporting quarterly earnings, but what is your membership trends? What have they looked like during the pandemic?
DAVID PILLSBURY: It's been an incredible time for golf. I mean, the first couple of months were pretty scary. I mean, we didn't know what was going to happen. Golf courses were closed. People didn't understand the virus. They didn't understand that golf actually was a safe place to reconnect with people, which is really at the soul of what a private club is all about.
And once everyone discovered it was safe and we followed all of our safety protocols, the members started playing golf in droves. Rounds were up 30%. It's been an incredible time for all of us, as people have kind of rediscovered golf is a great way to safely enjoy experiences with other people. So it's been a very, very interesting time for our sport and for the club business.
MYLES UDLAND: And you know, David, we certainly saw-- I mean, I couldn't get a tee time to save my life this summer over the weekends, but I'm also curious about what membership trends have been like because there's a lot of fear in the spring. Everyone's going to lose their job. This is '08 all over again. And it hasn't really panned out for the kind of customer that can afford a country club membership. Have you seen trends increase through the year, you know, beyond any expectations you have?
DAVID PILLSBURY: Yeah, it's been remarkable, actually. Membership sales are actually up 20% to 30% over 2019. And again, I think people lost the ability to find human connection, and they discovered that a great place to do that was in a club setting where it's safe. It's familiar. You're there with people you know. And golf, sort of inside the ropes, is a safe activity for people to do together. So there's just been a surge of interest in the club life experience and lifestyle.
BRIAN SOZZI: David, what about the next generation of club members? I think a lot of people think of private golf clubs as really for baby boomers. How have you been able to attract that next generation?
DAVID PILLSBURY: Well actually, our fastest growing segment is in the 40- to 47-year-old age group. So we are attracting sort of a new genre of golfer and member. They're seeking the lifestyle of a private club. It's a place, again, to fellowship around food, around fitness, around tennis, and of course, around golf. And we're just seeing more and more people searching for that experience that you find in a private club setting.
MYLES UDLAND: David, I want to ask you, as a player, a bit about where the equipment is at and where that cycle is at within the sport. You know, the equipment now is amazing. Everything goes farther, everything goes straight. It's great, but the price points can be a little nosebleedy at times, and I'm curious how far you think the OEMs are going to be able to push it before all of a sudden it's like, you know what? My irons are just fine because I don't have $1,600 laying around.
DAVID PILLSBURY: Well look, there's a tremendous amount of energy and technology going into game improvement. Our partner's Callaway, and they do a great job of making the game easier to play. And so new equipment is really about making the game more enjoyable, and as long as they continue to make the game easier and more enjoyable for golfers, they will continue to buy the equipment. And that's been proven out over time. In fact, I think the third quarter was a record for equipment sales in the golf industry-- again, an indicator of the fact that many more people are coming into the sport, enjoying it, and taking advantage of the incredible technology that exists today for game improvement.
BRIAN SOZZI: David, just given the strength that you're discussing here, I mean, have you had any talks with the folks at Apollo to bring you back to public markets?
DAVID PILLSBURY: That's not anything that we're talking about in the short term. We're really focused on 2021 and 2022. We did see a dip in our private events business. People aren't getting married in big groups, having big group meetings, and that's an important part of the club business. And we expect that to roar back in 2021, and so we're very bullish about '21 and then '22. All of the indicators are very, very strong for our sector and the private club business in general.
MYLES UDLAND: And, you know, David, the pandemic has been this weird kind of godsend to the golf business, but in 2019, Tiger Woods won the Masters, and that really brought the sport back into the fore. And it brought up the question of growing the game, how to make the game more diverse, how to make the game younger, how to get more people involved, and I know that's something that you're looking at trying to do more of. Do you think the sport's on the right trajectory there, and what are some steps you hope that your peers in the industry take in the years ahead?
DAVID PILLSBURY: Well, you know, our peers in the last 10 years have done various things. I think the advent of Topgolf-- we have BigShots Golf, which is our competitor to Topgolf-- really has taken the friction out of people dipping their toe in the water and trying the sport. I mean, you only have to show up with a credit card. You don't need to worry about showing up with clubs. You don't have to rent clubs. It's all there for you. So people are able to take their interest, which is demonstrated by record ratings on the PGA Tour, and convert it into trial by going to trial.
And we think that's been great for the sport. We think people have rediscovered the game through alternative golf entertainment, and the pandemic has also brought people back to golf courses. So people that might have left the sport 10 years ago have come back and said, I think I'll try it again. So you know, the non-traditional channels are great for growth in the game.
And within the sport itself, a lot more energy is being spent on bringing new players in. Very innovative player development programs that are sticky, that keep people in the game. We're doing many ourselves within ClubCorp, and we think that's going to result in much of this new demand staying in the sport, which is critical that we retain all of these new customers that have come into golf during the pandemic.
BRIAN SOZZI: Well David, between you and Myles, I might be in the market for some new golf clubs. Mine are very old, and they're no longer getting the job done. We'll leave it there. ClubCorp CEO, David Pillsbury. Enjoy your round this weekend.
DAVID PILLSBURY: Thanks, guys.