Just when things were showing signs of picking up in the golf world, the last two weeks of financial news has struck fear back into the business. The politics of Washington D.C., problems in Europe and unemployment figures here in the U.S. have cast a shadow on the world economy. The stock market has lost 10% in the last two weeks alone, and is still trending down. Things are so negative that gold, investor’s “safe haven”, hit an all-time high and then sold off from it’s high point during Thursday’s 500 point drop.
On Friday night, August 5, it was announced that the S & P rating for the United States was downgraded from AAA to AA+. What does this downgrade mean for everyone? For starters, the amount of interest the U.S. government pays on it’s debt goes up. Rates on car loans, mortgages, credit cards and student loans will be going up. This downgrade will hit the pocket books of the American people, and discretionary spending on golf will be no exception.
I was traveling last week in New York and was a guest at a few clubs in Southampton. You could feel it in the air. Everyone was talking about the problems facing the country. This morning on the range tee in Miami, a buzz of “whats going to happen next?” was heard down the tee line. If the members are taking cover, its only a matter of time that conversations about cut backs at clubs will take place.
This downgrade will give golf courses enough of an excuse to delay capital expenses and cut back on operating budgets…just what we don’t need to have happen. Many superintendents have been asked to do more and more with less every year. This next inevitable round of cuts may be the breaking point for many guys.