Jay Karen

Jay Karen of the National Golf Course Owners Association presented the Daniel Island-based group's 2018 economic impact report earlier this year at the National Press Club in Washington, D.C. Provided/NCGOA

With the PGA Championship underway in St. Louis this weekend, South Carolina golf fans are likely gazing ahead to 2021, when the event returns to Kiawah Island and the world-famous Ocean Course.

Jay Karen is among them.

Karen is fully invested in the game — and not just as an avid player and spectator. The South Carolina resident is CEO of the Daniel Island-based National Golf Course Owners Association. He's also chairman of We Are Golf, the national lobbying group that represents the game’s business interests on Capitol Hill on issues ranging from labor to taxes to the environment.

“We have to be vigilant every year,” Karen said.

Part of that vigilance, he said, is constantly “telling the industry’s story,” such as its estimated $84 billion impact on the U.S. economy.

That includes convincing lawmakers that golf has mostly shed its elite roots, that it's no longer a pursuit reserved for the country-club set. Karen estimated that private layouts in the U.S. now account for about 25 percent of the total. The rest are open to anyone. 

“We are dominated by public golf courses,” he said. “But that’s not the perception.”

Karen said the industry was reminded of its well-heeled, fat-cat image problem when the federal government offered businesses incentives to rebuild along the Gulf Coast after Hurricane Katrina. A handful of industries on what he termed "the sin list" were deemed ineligible for the disaster-relief tax credits.

"Massage parlors, tanning salons, hot tub companies, casinos, race tracks and golf courses were on that list," he said.

More recently, federal tax deductions for business-related rounds were eliminated by reforms signed into law by President Donald Trump, himself a golfer and course owner. 

"It was frustrating to see that deduction go away," Karen said. 

Golf is a cornerstone of the visitor industry in South Carolina, which hosts one annual PGA Tour stop each spring — the long-running Heritage held on Hilton Head Island.

A 2016 analysis by the S.C. Department of Parks, Recreation and Tourism found that the game accounts for $2.7 billion in direct and indirect sales in the state, more than 33,000 jobs, $881 million in personal income and $270 million in various taxes.

Nationally, though, participation has been in a rut, in large part because golf can be time-consuming, difficult and, at high-end tracts, quite expensive.

The number of rounds played in the U.S. has been essentially flat at about 24 million a year, said Karen, whose main job is to help push that figure higher. But course owners remain upbeat about other statistical and demographic trends that are poised to drive more play down the road, he added.

"Latent demand is as strong as it's ever been," said Karen, referring to the untapped pool of prospective players who haven't picked up a club for one reason or another. Research from the nonprofit National Golf Foundation shows the size of that group has swelled by 50 percent over the past five years to about 12 million.

"Now it's a matter of us capitalizing on that," he said. 

At the same time, golf is becoming more diverse, with more youngsters, minorities and females teeing it up. Karen said the field is "starting to look more like America, which is our goal."

"This doesn't happen fast," he added, "It take almost generations to see these things take effect."

The same can be said of the glacier-like real estate retrenchment that's been reshaping the golf business for the better part of a decade. The number of U.S. courses peaked in 2006 at about 15,000, capping a 20-year building spree that added almost 4,600 layouts to the market.

"A lot that was tied to residential developments .... to sell homes," Karen said. "That was part of the equation."  

The math turned out to be wrong. Demand slacked off and the market began recalibrating to bring supply in line with demand. It's been a slow but steady process. About 1,070 courses have been shuttered over the past 12 years, including several dozen along the Grand Stand and other parts of the state.

For example, Bonnie Brae Golf Club in Greenville announced on Facebook that it was closing July 1, ending a 57-year run in the Upstate.

"But not every closure story has to do with shrinking demand," Karen said. "In some cases the underlying land became more value than what the course could generate as a business."

A recent case in point is the Golf Club of South Carolina in Blythewood. Neighboring property owners were notified a few weeks ago that the 18-hole layout outside Columbia will be closed and recast as a 450-home subdivision, according to a local news report.

"Some like to say the dirt is more valuable than the grass," Karen said.

Not that there's a looming shortage of venues in golf-crazy South Carolina, where, according to research, the first U.S. match was played in 1786 on the Charleston peninsula. The Palmetto State now boasts about 375 courses.

“We are golf essential,” Karen said. 

Contact John McDermott at 843-937-5572 or follow him on Twitter at @byjohnmcdermott