Download Economic Impact and Use of Natural Resources

Peter Ryan, Ph.D.
SRI International
Golf’s Economic Impact
Key Contributors:
• GOLF 20/20
• The Virginia Golf Council
• Major golf associations and organizations
• Government agencies
• Related professional associations
• SRI International
Golf’s Economic Impact
Importance of State Golf Alliances:
• Define the scope of the golf industry
• Identify data sources and validate estimates
• Provide context for data interpretation
• Use economic impact results, in their own
organizations, to improve the golf industry
• Serve as enablers/influences for positive use of
economic impact results outside of the golf industry
• Influence governmental and organizational policy
related to the golf industry
Golf’s Economic Impact
The Challenge—Develop a Framework to:
• Illustrate and communicate the full scope of the golf industry
• Create a context for golf’s economic impact in a state
(relative to other industries and consumers of natural
resources)
• Employ multiple data sources and measures to capture
the industry from both internal and external perspectives
• Enable replication over time, within state, and across
states—“compare apples to apples”
• Stay cost effective, in part, by evaluating and using data
from golf and non-golf organizations collected on regular
cycles
Golf’s Economic Impact
The Approach:
• Meet and collaborate with state alliance to
identify/validate economic estimates
• Identify multiple indicators for each industry
segment
• Use both primary and secondary sources to
reach “consensus estimates”
• Estimate economic activity directly related to
the golf industry
The Golf Economy
The Golf Cluster
Golf Facility
Operations
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•
•
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Golf Course Capital
Investment
Irrigation
Installation
Course
Renovations
Media, Tournaments,
Associations & Charities
Green fees, memb. dues
Food & beverage
Lessons, schools, camps
Rentals
Charities
Player Endorsements
Television
Tournaments
Clubhouse
Renovations
Associations
Infrastructure
Improvements
Golfer Supplies
Equipment / Golf
Car Purchases
(on and off course)
New Course
Construction
Soft Goods
Apparel
Hard Goods
Core Industries
Books &
Magazines
Enabled Industries
Hospitality/Tourism
Air Travel
Car Rental
Real Estate
Entertainment
Lodging
Source: SRI International (2002).
Food &
Beverages
Real Estate
“Premiums”
Related Residential
Construction
Golf’s Economic Impact
Segments of the Golf Economy:
Size of Virginia’s Golf Economy in 2005 by Segment ($ million)
Core Industries
Golf Facility Operations
Golf Course Construction and Capital Investment
Golfer Supplies (retail margin)
Major Golf Tournaments and Associations
Total Core Industries
Real Estate
Hospitality/Tourism
Total Enabled Industries
TOTAL GOLF ECONOMY
Golf’s Economic Impact
Economic Impact:
• Direct Impact: New economic activity (production,
employment) linked to provision of golf products and services
• Indirect Impact: Increase in regional production of goods and
services that supply golf courses and related industries
• Induced Impact: Increase in consumer spending enabled by
employment in core and enabled golf industries
• Multiplier effects: The idea that the impact of new golf activity
on consumer spending will disproportionately exceed the direct
impact (witnessed in indirect and induced impacts)
• RIMS II: Regional Input-Output Modeling System, U.S. Dept.
of Commerce, Bureau of Economic Analysis (Inter-industry
linkages)
Golf’s Economic Impact
The Message:
• The golf industry makes a substantial
contribution to economic activity in the state
• Employment—full- and part-time jobs
• Wages—labor income
• Taxes
• Golf has many benefits—recreational,
social, economic
• The golf industry is a responsible steward of
the environment
David Norman
Virginia Golf Course
Superintendents Association
Context of Virginia Study
2002 Drought
Context of Virginia Study
First Virginia Golf Summit Established January 2003
• Resulted in collaboration among 5 golf organizations
to study golf’s economic impact
Context of Virginia Study
• Need to present systematic information
about the relevance and impact of the golf
industry to policy-makers in Virginia
• This type of information is vital to the future
success of the golf industry
Potential Uses of Study
• Build credibility and recognition of industry as
significant business sector in the state
• Define the range of core and enabled
industries associated with golf
• Articulate for policymakers golf’s employment
and revenue-generating contributions
• Create economic context to understand the
use of land and water resources
Size of Virginia’s
Golf Economy
Size of Virginia’s Golf Economy in 2005 by Segment ($ million)
Core Industries
Golf Facility Operations
Golf Course Construction and Capital Investment
Golfer Supplies (retail margin)
Major Golf Tournaments and Associations
Total Core Industries
Enabled Industries
Real Estate
Hospitality/Tourism
Total Enabled Industries
TOTAL GOLF ECONOMY
$707.5
$69.8
$42.0
$15.3
$834.6
$427.4
$329.9
$757.3
$1,591.8
Golf’s Economic Impact
Multiplier Impacts on State Economy ($ million)
Industry
Direct
Indirect & Induced
Golf Facility
Operations
New Golf Course
Construction
TOTAL
$1,449.9
$55.6
Golfer Supplies
$88.1
Major Tournaments
and Associations
$32.8
Real Estate
$783.8
Hospitality/Tourism
$678.5
TOTAL
$1,591.8
$1,628.9
$3,088.7
Golf’s Economic Impact
Golf’s Impact on Virginia Employment and Earnings in 2005
Industry
Golf Facility Operations
New Golf Course Construction
Golfer Supplies (retail)
Major Golf Tournaments and Associations
Golf Real Estate
Hospitality/Tourism
TOTAL
Employment
22,301
473
982
463
6,669
9,301
Earnings
$460,299,500
$16,603,620
$25,704,000
$11,310,680
$233,960,100
$200,514,045
40,189
$948,391,945
Economic Impact and Use
of Natural Resources
Virginia golf courses account for only 2.2 percent of
total turfgrass acreage in the state
Churches, 1%
Golf Courses, 2%
Schools, 3%
Airports, 1%
Sod farms, 0%
Cemeteries, 0%
Parks, 3%
General areas, 11%
Home lawns, 61%
Highway
roadsides, 18%
Source: National Agricultural Statistics Service, Virginia Agricultural Statistics Service (2000).
Virginia’s 2004 Turfgrass Industry, “2004 Turfgrass Acreage” table
Economic Impact and
Use of Natural Resources
Virginia golf courses account for four-tenths of one percent
(0.4%) of the ground and surface water consumed in the state
Commercial,
1.2%
Agriculture, 1.4%
Mining, 2.9%
Manufacturing,
37.5%
Irrigation, 0.7%
Golf courses are included in
commercial and accounted
for 0.4% of total water
consumed.
Public Water
Supply, 56.3%
Source: Department of Environmental Quality, Commonwealth of Virginia (2005). Status of Virginia’s Water Resources,
http://www.deq.virginia.gov/regulations/documents/StatusofVirginiasWaterResourcesReport2005.pdf
Economic Impact and
Use of Natural Resources
Virginia Water Usage and Economic Returns Comparisons
Virginia golf courses
generate high economic
returns from per acre
water use (examples)
Average water usage
Golf course
4,170 gallons/acre/day
Home lawn
3,879 gallons/acre/day
Grapes
3,879 gallons/acre/day
Corn, grain
2,521 gallons/acre/day
Magnitude of irrigated acreage
Home lawns
1,048,000 acres
Corn, grain
330,000 acres
Golf course
36,900 acres
Grapes
1,900 acres
Revenues per acre
Golf courses
$18,480/acre
Grapes
$2,453/acre
Home lawn (supplies and service)
$1,687/acre
Corn, grain
$189/acre
Economic Impact and
Use of Natural Resources
The Virginia golf
industry supports
turfgrass
research and
improvements in
efficient water
use and
integrated pest
management
(IPM)
Economic Impact and Use of
Natural Resources—Summary
• Golf courses use significant amounts of water
during summer months to support business
However:
• Scale of water use on a statewide basis is
significantly less than other industries
• Golf generates greater economic returns
• The golf industry continues to be a responsible
partner in finding scientific and regulatory
solutions to the state’s water challenges
Golf’s Economic Impact
in Virginia—Summary
• Golf is big business in Virginia
• Golf makes significant contributions to
many segments of the Virginia economy
• Collaborating with a state golf alliance
enhances the entire industry
• Golf is a responsible steward of the Virginia
environment and its natural resources
• GOLF 20/20 is a key resource for the
Virginia Golf Council