GDO, GOLFTEC, and SkyTrak Chart a Path to the Future with “Off Course Golf”

On August 10, Golf Digest Online, Inc. (GDO) announced it would acquire the business operations of SkyTrak, maker of the most popular consumer  golf launch monitor on the market, through its US subsidiary GOLFTEC Enterprises. The acquisition, which cost USD 65 million (about JPY 8.77 billion) was completed on August 31. 

What does this new investment mean for the future of the GDO Group, which posted its highest-ever earnings in 2021 (JPY 39.5 billion in sales, JPY 1.03 billion in net profit)? We asked GDO Group CEO Mike Ishizaka, GOLFTEC CEO Joe Assell, and SkyTrak Chief Strategy Officer Jeff Foster to describe their vision for the venture.

◆Trends in the Golf Market and the GDO Group’s Policy  

Ishizaka: The “golf entertainment” industry is experiencing a huge boom, especially in the US. It started even before the pandemic with Topgolf. And it’s not just large facilities – they’re developing all kinds of entertainment options for smaller-scale indoor spaces as well. At the same time, there are more and more ways to enjoy golf and improve your game using technology. 

Through our investment in GOLFTEC and our acquisition of SkyTrak’s business operations, we’re hoping to develop new technology- and entertainment-powered services for this emerging industry. 

For the GDO Group’s part, we’re already investing in “off-course golf,” as it’s called in the US, even as we continue to refine our existing business lines to keep our profits growing. With Toptracer in Japan and GOLFTEC in the US, we’re working toward ever greater golf innovations that will not just grow our existing businesses, but help generate new demand for golf. 

◆GOLFTEC’s Current State and Future Prospects  

Joe Assell: It’s a great pleasure to be here with you to talk about GOLFTEC, the world’s number one golf lesson company. We’re opening 30 new centers in 2022, which will bring us to around 250 centers worldwide. We’re also the largest employer of PGA teaching pros, with about 1000 coaches on staff. For 2022, we expect our total customers to reach 190,000 and total number of lessons to reach 2 million. 

Our main revenue areas are lessons, practice, club fittings, club sales, and franchising. Our cash sales in 2022 including franchisees were USD 190 million (about JPY 27.2 billion at USD 1 = JPY 143), and without franchisees that figure was USD 130 million, with a projected average annual growth rate of 23%.

We’re experiencing a phenomenal increase in growth as well. We plan to open 20 new locations in 2023, and there’s still more room to expand. Currently we have 210 centers in the US, and we think we can increase that to 375. Outside the US, we have about 40, and we estimate that number could grow to 400. So in total we think we can expand to 775 locations worldwide. That means there’s room to open over 500 new locations in the future. 

GOLFTEC is generating steady revenue through new student signups and existing student renewals. Our renewal rate is steady at about 47% per year. In addition, we’re getting more and more new students every year, which makes it extremely simple to forecast our performance. We can use this solid foundation to encourage future-oriented reinvestment in our business. 

◆Overview of SkyTrak’s Business

Jeff Foster: It’s an honor to be part of SkyTrak and now part of GOLFTEC. For several years now, SkyTrak has been the best-selling launch monitor, with around 60,000 current users. It not only measures and displays ball data with incredible precision, it also includes simulated courses, games, and stat records, allowing you to have fun with your friends while you practice and improve your skills.

As you know, golf has experienced a boom these past few years. One thing that made SkyTrak’s business appealing to GOLFTEC was the increase in off-course golfers. There are 10 million more off-course golfers today than in 2014. Put another way, that’s an increase of 174%, which represents a golden opportunity for both companies’ business. 

Our number one focus right now is improving our products. We’re also investing more in new marketing strategies. Within the next few months, I expect we’ll be able to announce some new partnerships. But what I’m looking forward to more than anything is the chance to be leaders together. With Joe leading GOLFTEC and taking over management of SkyTrak, and Mike (Ishizaka) leading GDO, we can make effective use of our respective resources to help our business grow. GDO will open up new markets outside the US, while SkyTrak and GOLFTEC share a common vision of using technology and data to grow our business. We have tremendous opportunities lying before us. 

◆The “GOLFTEC Anywhere” revolution

Jeff Foster: “GOLFTEC Anywhere” is a new fundamental concept we’re working on. The idea is to deliver a world-class golf training experience no matter where you are, whether it’s via an in-person lesson at a center, on your phone while you’re out and about, or on a simulator in your home. You’ll be able to connect from anywhere and get some training in. This will allow us to reach a broader range of golfers worldwide than ever before. Our goal is to use it to make our brand even bigger and take GOLFTEC into the next generation. 

Joe Assell: By combining GOLFTEC’s world-class coaching staff, brick-and-mortar centers, and technological history with SkyTrak data, we can deliver not only golf lessons, but entertainment to people around the world. 

We can use swing data extracted from photos taken with golfers’ phones and ball data collected through SkyTrak, along with GOLFTEC’s latest technology and coaching, to help golfers improve their game no matter where they are in the world. We’ll be able to offer an infinite range of content to golfers worldwide: everything from club fittings and lessons with famous coaches to fitness sessions and games. I’m very excited to chart the future course of our business together. 

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