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February22018

18Birdies Examines the Impact of TopGolf and Drive Shack

We’ve all seen them.  Headlines today are riddled with doom and gloom for the future of golf.  They all lament on similar themes:  Television ratings are down; millennials lack the attention spans, time, and non-student loan-siphoned funds to take up the game; traditionalists and rules-hawks phoning in championship-shifting violations to the governing rules officials (which, thank goodness, the USGA and R&A did away with beginning in 2018 – sorry armchair refs); or, simply, the game is too hard and difficult to master.

While these arguments may each hold a shred of truth, they miss the mark entirely as they rely on dated metrics and perceptions to gauge the health of the game.  Golf is changing, and a swell of enthusiasts, both new and old, contend that TV ratings alone are a false flag and that the naysayers are focusing on the wrong indicators.  What if we instead look at where and how golf is being played?  Off-course golfing activities were actually UP nearly 12% in 2017.

Anyone who has ever hit that One.  Pure.  Shot.  knows the feeling that hooks a golfer.  Even in a round filled with shanks, duck hooks, fried eggs, snowmen, and curses, that one pure glorious shot will keep a golfer coming back, as the old adage says.  Too many people, perhaps for the aforementioned reasons, have never stepped foot on a course and experienced that thrill of accomplishment.  But today, thanks to two innovative heavyweight players in the golf industry, that feeling isn’t limited to the course alone.

Enter the 21st-century extension of the game, playfully dubbed “Eatertainment”.  Dream hybrids of driving ranges and upscale lounges, these venues breathe fresh air into the game in their value propositions to both the competitive and casual golfer alike.  A first-time golfer can try their hand at swinging a club or taking a lesson, while more avid and advanced golfers can compete with each other firing microchipped golf balls at neon laser banded targets.  Most important to the future of the game, arguably, are the folks they are attracting. Those who may have sipped a beer and played some casual darts at the bar but never were inclined to pick up a golf club.

The original and best known of the two, Topgolf, was founded in the U.K. in 2000 and came ashore to the U.S. in 2005.  Its success was quickly noted in the industry, with Callaway coming on board as an investor not long after Topgolf opened its hitting bays in the U.S.  With 37 locations between the U.S. and U.K. (with several more planned and on the way), Topgolf is the household name and entrenched incumbent in the space.

 

Is synchronized golfing a thing? It should be. ? That’s this week’s #SwingsOfGlory. ?????Don’t forget to tag yours for a chance to be featured. #Repost @linkonthego ??? Good time celebrating @bobbitto_pk 30th Birthday #topgolf #charlotte #happybdaybro

A post shared by Topgolf (@topgolf) on

Facilities feature climate-controlled hitting bays, and an expansive range housing neon-ringed targets, centered by golf pins.  Point values are awarded depending on proximity to the pins and distance of the targets.  In its Orlando location, Topgolf has recently introduced “Toptracer” technology – a branded version of the same Protracer technology that allows viewers to follow Rory or DJ’s high swooping drives on TV any given Sunday.  For those players awaiting their turn, a lively scene is at hand with live sports on TV, music, and expansive menus of food and drink.  To boot, golf club rentals are free.

In essence, Topgolf has retained the popular aspects of the game (camaraderie, competition, thrill) while eliminating the detracting factors to traditional golf (time commitment and high expenses for equipment and greens fees).

Eyeing Topgolf’s success and pent-up consumer demand for off-course golf fun, Drive Shack has recently thrown its hat in the Eatertainment ring.  While not a new company itself, Driveshack will be making its presence known with locations of its own in 2018.  Breaking ground in Orlando, Drive Shack plans to quickly open five more locations in the South and Southwest – with an ambitious total of 25 in the pipeline.

Modeled in the Topgolf mold almost down to the studs, Drive Shack locations will be similar to Topgolf’s in most ways:

  • ~60,000 square footage
  • ~ 90 hitting bays stacked across 3 stories
  • ~ 220 yard range
  • Restaurants, bars, and event space for up to 150 guests depending on location
  • Expansive food menu, with a focus on ‘share-ables’
  • ~ 350 employees per facility
As we wait to see exactly what a Drive Shack location will look like, and how the brand will differentiate itself from Topgolf, what is clear is that the company sees ample demand for both in the Eatertainment space.  While Drive Shack is a fast follower to Topgolf’s recent success, it does have one major thing going for it: the cold hard cash to make good on its aggressive expansion plans.

Backed by Fortress Investments and publically traded, Drive Shack is the owner of American Golf, owner-operator of a large number of golf courses and facilities in the U.S. However, a recent move from a Real Estate Investment Trust to a Corporation has signaled that Drive Shack is throwing the kitchen sink at the upside it sees in Eatertainment.

A nod and counterbalance to Topgolf’s backing by Callaway, competitor TaylorMade has invested in Drive Shack. Moving into a market opportunity that is far from saturated, Drive Shack can learn strong lessons from Topgolf’s growth. Current avid golfers and those soon-to-be-converted should be excited as these two companies extend their geographic reach and innovative offerings.

At their core, these venues share the same core principles as 18Birdies: making the game more fun, social, uniquely competitive and connected, and growing in new dimensions and directions.

The 18Birdies app is now available for iPhone and Android devices. Click here for your free download. For more information and content, log onto 18Birdies.com

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