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1 Golf in the Erie Economy Dr. James A. Kurre The Economic Research Institute of Erie Sam and Irene Black School of Business Penn State Behrend For the 6th Annual ERIE Conference August 14, 2007
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2 Golf Digest’s Metro Golf Rankings Four Factors: -Access to Golf (45%) -Weather (25%) -Value of Golf (15%) -Quality of Golf (15%) Based on 2005 data.
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3 Results: Overall Ranking Best: #1 Auburn-Opelika, AL Worst: #330 Jersey City, NJ Erie: #26!
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4 Access to Golf (45%) # of holes per 1,000 people Erie (#75): 1.24; average: 1.04 Best: Jackson MI, 6.64 Worst: Jersey City NJ, 0.06 % of public vs. private courses Erie (#100): 76.9% public; avg: 69.2% Best: Anchorage AK, Cheyenne WY, Santa Cruz- Watsonville, CA, Vineland-Millville- Bridgeton, NJ, all 100% Worst: Jersey City NJ, 0%
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5 Access to Golf (45%) -# of holes per avid golfer -Rounds played compared to capacity Erie’s Ranking: 24 of 330
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6 Quality of Golf (15%) Based on Golf Digest’s Average Star Rating Erie’s Ranking: 145 of 330 Best: Auburn-Opelika, AL Worst: Jersey City, NJ
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7 Value of Golf (15%) Average greens fee: Erie: $25.61 330 Metro areas: $41.74 average High: $139.60 Las Vegas Low: $17.00 Casper, WY Erie’s Ranking: 16 of 330
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8 Weather (25%) Golfable days per year Erie: 21 330 metro areas: 246.7 Erie was 88% of the average Best: San Diego CA, 353 (63% more than Erie) Worst: Anchorage AK, 150 (31% less) Erie’s Ranking: 264 of 330 7
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9 The Economics of Golf in Erie (Supply and Demand Redux)
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10 Start with Supply
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11 Source: Economic Censuses 2002ErieU.S. Establishments2212,261 Employment287312,812 Emplymt per est. % of U.S. 13.0 51.1% 25.5 Revenues$15.1 mill$17,534 mill Revenue per est. % of U.S. $685,864 48% $1,430,039 NAICS 71391 Golf Courses & Country Clubs
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12 Source: Economic Censuses Erie19972002 Establishments1922 Employment335287 Emplymt per est. % of U.S. 17.6 75.1% 13.0 51.1% Revenues$14.7 mill$15.1 mill Revenue per est. % of U.S. $774,316 64% $685,864 48% NAICS 71391 Golf Courses & Country Clubs
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13 Golf Digest Data Access to Golf: #24 of 330 -Holes per 1,000 people: #75 of 330 1.24 vs. 1.04 average -% Public: #100 of 330 77% vs. 69% average -# Holes per avid golfer -Rounds played as % of capacity
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14 Prospects for Future Entry Key input: land -Source: Agriculture -Alternate use: Development
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15 Demand Side -“Avid golfers” & “rounds as % of capacity” imply relatively low demand -Income in Erie is below the national average -Anecdotes about new member campaigns and fees at local country clubs -Conclusions
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16 Supply & Demand Conclusion: Supply is relatively high -compared to U.S. -compared to demand
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17 Supply & Demand P1 Price Quantity Demand Supply P2
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18 Results Lower than average prices in Erie. -Golf Digest: $25.61 vs. $41.74 It’s harder to make a profit here.
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19 Thanks to the Longitudes Group for sharing the Golf Digest Data. The Metro Golf Rankings are online at: golfdigest.com/cities.
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20 Erie Golf Info online Guide to Erie Golf Courses www.eriegolfcourses.com GolfLink.com http://www.golflink.com
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