The good news is that after two full seasons of dealing with the pandemic, Covid-19 isn’t likely to be a primary concern this season, but don’t count out the possibility of it returning in a big way.
That’s the type of uncertainty the golf industry faces as the 2022 season gets underway. The sixth wave of Covid appears to be plateauing, but as we have discovered in the past, there are no guarantees that this is the end.
Volatility is the bad news this season, whether it applies to Covid, runaway inflation and how it affects consumer spending and discretionary dollars, or lack of them, that are so important to golf.
Inflation in Canada rose to a 31-year high of 6.7 per cent in March. That included everything from fuel prices to groceries to accommodation and inflation shows no sign of slowing down this year.
Yet, Statistics Canada reported last week that retail sales rose 0.1 per cent to $59.9 billion in February, with clothing and clothing accessories stores (+15.1 per cent) and gas stations (+6.2 per cent) leading the way.
Even in February, inflation peaked at 5.7 per cent, so one would think consumers would have already begun tightening their belts a couple of months ago.
The reasons they haven’t could be so-called “revenge buying,” or splurging on clothes and travel after two years of frugality due to Covid, or the need for essentials as people return to work.
Whether consumer spending continues to rise over the summer is one of the wild cards faced by businesses this year. The price of gas is expected to continue rising due to the Russian invasion of Ukraine and as long as that happens, it will fuel inflation.
As it attempts to slow inflation, the Bank of Canada raised interest rates by half a percentage point recently to one per cent and warned that more rate hikes are on their way.
Some are speculating that the next rate hike at the beginning of June could be three quarters of a percentage point, with more on the way later this summer.
Consumers already stressing about inflation might feel they’re being piled on as they will feel added pressure as higher interest rates jack up the costs of their mortgages and lines of credit.
With more of household incomes going towards the rising cost of living and interest rates, golfers will play, but will they play as often?
Will golf operations across the country put through the same number of rounds put they did during the Covid years, especially with all entertainment, recreation and travel option now available?
For those who do frequent the golf course, will they spend as much when there on food and beverage and pro shop items that are likely pricier due to inflation?
A constantly changing economic landscape is ahead this summer, which makes it difficult to predict the degree to which consumers will be doling out the dollars, or tightening the pursestrings. The economy we see in May may be entirely different in August.
Fasten your seatbelts. A bumpy road is ahead.
