Off-Course Golf: How Big Can It Get?

Take a quick stroll through any Topgolf location — or scroll through its Instagram feed — and you’ll see golf. Sort of.

More denim than Dockers, more sundresses than Scotty Cameron, it’s certainly a different kind of audience than what the sport is used to seeing. And it continues to grow.

The participation base for off-course forms of golf has increased by almost 23% over the past five years, climbing to an estimated 24.3 million Americans. In 2020, the off-course participant pool had a net gain of approximately 1 million — almost twice the jump seen in on-course golfers.

Whether its golf entertainment like Topgolf, golf simulators or standalone driving ranges, almost as many people now participate off-course as play traditional, green-grass golf (24.8 million).

Topgolf is the next-generation driving range, combining golf with food, drink, music and games to create a sports bar-like atmosphere. (Photo courtesy of Topgolf)

So, how much runway is there for these off-course facilities?

“I don’t think that anybody really knows yet what the demographic formula is that correlates to a saturation point,” says ClubCorp CEO David Pillsbury, whose company ventured into the golf-entertainment space with BigShots Golf in 2018. “We’re going to find out here over the next few years what that looks like. Having said that, I think there’s plenty of room. As long as it’s fun, it’s entertainment, it’s fast, casual dining and an entertainment environment… it’s good for the game.”

BigShots Golf is a relative newcomer in the golf entertainment space. (Photo courtesy: BigShots Golf)

Topgolf remains the biggest name in the golf entertainment space, with over 60 venues nationwide, and has been joined by companies like Drive Shack, Big Shots, GolfSuites, 4oRE! Golf, and an increasing number of regional imitators. Callaway Golf acquired Topgolf in March 2021 in a $2 billion merger, one of the biggest deals in golf business history. In Q3 2021, 39% of Callaway’s total net revenue was from the Topgolf segment — more than that from golf equipment, as well as apparel, gear and accessories.

“We knew we got a gem when we merged with Topgolf. But it’s been well above expectations and obviously we view the outlook along those same lines,” said Callaway CEO Chip Brewer.

Callaway later made a $30 million minority investment in Five Iron Golf, a privately owned indoor golf and entertainment concept predominantly located in major metropolitan cities. Offering simulator rentals, golf lessons and custom club fittings while also providing a fun space for social events, Five Iron aligns with both Callaway’s golf entertainment and golf equipment segments.

With land in urban areas is at a premium and more and more competition for free time, indoor golf facilities such as Five Iron Golf are an increasingly-popular form of engagement and continue to pop up in cities around the country. These facilities have similar potential – providing a fun, non-intimidating on-ramp to attract people to the game and, ideally, create more green-grass golfers. No matter how they play, the industry is eager for the next generation to carry the torch, drive revenues, and let the game have a positive impact on their lives.

Five Iron Golf is an indoor golf bar and grill, with two locations in New York City and another in Philadelphia. (Photo courtesy of Five Iron Golf)

Among Topgolf’s guests who are non-golfers, 94% say they feel comfortable at a Topgolf venue. Whether it’s kids, women or newcomers who have never swung a golf club before, this type of facility provides a fun, welcoming introduction to the game.

NGF research finds that off-course is not cannibalizing on-course, rather the traditional and modern forms of golf are complementing one another. A recent NGF study found that 75% of non-golfers who visited Topgolf said they’re interested in playing on a course. And 29% of golfers say playing at Topgolf leads them to play more traditional golf.

There are now more than 60 Topgolf venues in the U.S. (Photo courtesy of Topgolf)

There are 17 million non-golfers who say they’re “very interested” in playing golf on a course and the popularity of off-course forms of golf has contributed to this growing latent demand pool.

“Topgolf is driving interest in huge numbers for golf. But the challenge from my perspective is that the golf industry, for the most part, hasn’t really done anything differently to convert interest to trials. That’s what we’re trying to change,” Pillsbury said. “We can’t change what everybody else is doing, but we can change what we’re doing. That’s what we’re focused on because we think there is a very unique, unprecedented opportunity to take advantage of surging interest in golf and converting that to trials.”

The U.S. is the best-supplied golf market in the world, with more than 16,000 traditional golf courses. More than 4,000 opened during a 20-year building boom from 1986 through 2005 that oversaturated the market. When demand (the number of golfers) couldn’t keep up with supply, course closures began to outweigh openings, with the majority being value-priced, public properties in competitive markets.

So, is it possible the current off-course building boom eventually outpace the demand for these kinds of alternative golf offerings? It’s still too early to tell, and the industry overall remains more focused on whether off-course participation can boost on-course play.

“We have a mantra – ‘what’s good for Topgolf is good for golf, and vice versa,” Topgolf executive group executive chairman Erik Anderson said. “We’re thrilled to see more people experiencing and enjoying the game.”

The numbers show people are indeed enjoying the game – no matter its form.