Despite being banned for decades and still regarded as a sport of the elite, golf has witnessed a spectacular development in Central & Eastern Europe in recent years. With rising discretionary income and leisure time for the region’s population, greater proliferation of courses, wider television coverage and EU funds availability, the future of the industry in the region looks bright – this was the conclusion of the participants at the KPMG Golf Business Forum in Budapest last week. The two-day international event – the first of its kind in Europe – gathered investors, real estate developers, EU and government officials, golf club operators as well as architects and designers from more than 25 countries.
In Hungary there are approximately 2,800-3,000 golfers (1,300 registered and further 1,500 non-registered players, and there are eight courses – six in full operation, further two partly operating. KPMG predicts that there will be approximately 25 operating golf courses and 12,000 registered golfers in Hungary by 2013
In Hungary and the CEE region golf is still regarded as the sport of the elite, and played mostly by business people and members of the local ex-pat communities. Nevertheless it is not necessarily more expensive than some other popular sports like skiing.
In Hungary an average annual fee of approximately HUF 250 thousand to a golf course may not be more expensive than a two-week ski holiday in the Alps. And that allows play on each playable day, which in Hungary is approximately 220 days.
“Regarding playable days we can not compete with Spain or Portugal – they enjoy 320 playable days,” Andrea Sartori, partner and head of the KPMG Travel, Leisure and Tourism group in the CEE region said. “You can‘t change the weather, so you have to offer additional attractions. More over, a stand alone golf course is rarely lucrative.”
Today in the CEE, there are 92 courses with some 26,000 registered players. KPMG predicts that the number of golf courses will grow to 220 while the number of players will exceed 130,000 in the region by 2013.
Developments at Birdland Golf and Country Club, near Bà¼k, close to the Austrian border, show this direction; Birdland has opened a 208-room luxury wellness centre recently, and is also constructing a residential villa park. Birdland president, Attila Hegyi, pointed out that they prefer golf tourism to golf membership and got into real estate developments because the golf course alone is rarely profitable.
Combining a golf course with additional attractions, such as hotels, spas or wellness centres, residential areas, hotels, conference facilities and casinos can make the business profitable.
Several presenters agreed that such additional offerings can also give the golf course a much needed character, a unique selling point. There are no universal recipes on how to achieve this but with thoughtful planning one can find the best combination of local attractions.
Such thoughtful and mature planning is important in other aspects as well. Examples cited at the conference showed that promising developments can easily go bust without careful planning on design, details of construction as well as good project management. Keeping the right balance between costs and demand, thus making the course affordable both for developers and club users, is also vital.
Although most developments are led by private investors, in several countries public golf courses are also in operation, mainly with municipalities providing the land. Such schemes help make the sport more popular and available, proving that supply of courses and demand mutually strengthen each other.
Presenters at the conference also agreed that, contrary to common belief, the key ingredients of success are not the fancy clubhouse, or the prestigious championship 18-hole course. With a great location and a more simple clubhouse, a quality course (sometimes even a quality 9-hole course) can be an absolute success.
Although all that applies to Hungary as well, none of the eight local golf courses are concentrated around tourism or major urban centres, except the ones within a half an hour drive of Budapest. According to Andrea Sartori, this is likely to change though developers seem to put more emphasis on health, gastronomy and tourism in planning the winning combination of attractions. “The locations in the golf development plans we know of are closer to either Budapest, to Lake Balaton or to some major local wine growing regions,” he said.
The appearance of budget airlines is also expected to have a major effect on further developments, According to Hans-Georg Erhardt, managing director of Golf & Land Design in Austria, low fair flights to Debrecen would have a huge effect on golf in the eastern part of the country. He also added that the Hungarian golf market is already in a boom, with four new projects underway.
Others at the conference, however, warned of the negative effects of a real boom; Colin Hegarty, president of Golf Research Group, emphasized that instead of a boom, controlled and sustained development is desired. To help achieve this “each country should have a cohesive national business development plan,” he added.
In Portugal a national golf development program helped the industry develop in recent years. According to Pedro de Mello Breyner of the Portuguese National Tourism Board, the state spent Euro 27 million to help private sector developments, mainly by coordinating the national and regional development plans, by promoting and marketing programs and cooperating with travel agencies and tour operators to help improve awareness and accessibility.
According to Andrea Sartori, Hungary can also become a golf tourism destination in Central and Eastern Europe in the near future. Besides well-located, quality courses, the right combination of attractions giving a character to the individual courses is needed, as well as a higher concentration of courses within a certain area to allow golfers to play more courses during their stay. “Knowing that golf tourists are adventurous and spend a lot, this can also generate significant tourism revenues,” he added.
And there are many waiting to be attracted – the WTO predicts that by the year 2020 nearly every third visitor to Europe will choose a CEE destination, and golf tourists in particular are always looking for new golf destinations. According to Muriel Muirden, managing director at the London-based tourism industry advisory firm, Economic Research Associates, the generations most attracted to golf are also keen on combining sport with culture and heritage, something the CEE region is rich in and still undiscovered by many.