Global Edition

Bright future for golf in Europe

12.10am 29th June 2005 - Management Topics

Golf course construction is a growing business all over the world, and increasingly seen as a tool for property and tourism development. In Eastern Europe, one of the fastest growing golf regions globally, further growth in demand is desirable to create a further wave of course development and thus reach a higher concentration of golf courses, which is needed to attract golf tourists as well.
This was one of the main conclusions at the KPMG Golf Business Forum in Prague. The two-day event, following last year’s pioneering meeting in Budapest, gathered golf club architects, designers and operators as well as investors, real estate developers and tourism officials from 26 countries.
The some 190 participants at the Prague conference agreed that there are no universal recipes regarding size, style, design or winning cost for golf course developments, however, thoughtful planning on feasibility, design, the details of construction as well as good project management is always a must, otherwise even promising developments can go bust, especially in emerging markets like Eastern Europe.
Keeping the course affordable both for developers and club users is also vital. Although most developments are led by private investors, public golf courses are also in operation in several countries, 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.
In recent years, approximately 1,000 new golf courses have been established annually worldwide. More mature markets include the U.S.A, Australia, South Africa, the United Kingdom, Ireland, Sweden, Spain and Portugal; moreover there are also a number of countries and regions (e.g. South America, Middle East and Eastern Europe) where golf is becoming increasingly popular.
A KPMG survey on golf course development costs, launched at the Prague forum, revealed that developing golf courses are least expensive in Eastern Europe. According to Andrea Sartori, head of the KPMG Travel, Leisure and Tourism group in the CEE region, in less mature markets like Eastern Europe the development of relatively cheap golf courses, affordable to the wider population, could help the market penetration grow.
In the region golf course development projects are still a personal business with minor public involvement.
However, in the Czech Republic the Ministry for Regional Development aims to help golf development hand in hand with spa and wellness projects. Markà©ta Svatonova, Tourism Advisor to the Minister told the conference that the Ministry regards golf as one of many sports which can enhance regional development programs and improve the sport infrastructure – an approach also helping to diminish the elitist perception of the sport. She emphasized that her Ministry also helped golf course developers with information in obtaining financial support through European Union’s Structural Funds. Although golf in the Czech Republic traditionally enjoys a unique popularity – for not having been banned in the communist era, contrary to the other Soviet bloc countries – the country has not developed a golf strategy yet.
Nevertheless, participants at the conference suggested that the whole region could soon see such a breakthrough when decision makers, today often reluctant to talk about golf in the fear of being perceived as supporting an elite sport, also recognize its potential as a sport, and a tool to enhance tourism revenues and raise real estate value. Also, contrary to common belief, sometimes even to solve environmental problems – John Strawn, CEO of Robert Trent Jones II, a world leader golf course architect firm, cited an example from the US, where a comprehensive golf course development project helped the revitalization of an oil-contaminated area. Other international examples show that quality and affordable municipality golf courses can also be a lucrative business.
Ideally, that change in the perception of golf would also involve creating cohesive national golf business development strategies. In countries where tourism is a prime revenue source, golf increasingly becomes such a strategic issue.
Some presenters at the Prague Golf Business Forum showed examples of how their country support golf development, seeing golf as a new attraction to boost tourism revenues, proving that more public involvement could facilitate the growth of the golf industry.
Maro Kazepi, Tourist Officer of the Cyprus Tourism Organization pointed out that based on a new government policy there are 14 golf course developments in process with central support on the Mediterranean island. Meanwhile, Ivan Jakovcic, President of the Istrian Region in Croatia, has highlighted his government’s plans for the development of 22 golf courses in the next ten years in Istria.
Hans Ruisz, Managing Director of the Austrian Tourist Office’s golf division told the conference that by creating a network of hotels and golf clubs, Austria could multiply the number of local golfers recently, and also win the “Undiscovered Golf Destination of the World” award last year.
The KPMG study also revealed that golf course developers in the region consider obtaining permits the prime difficulty to overcome (65% mentioned), followed by environmental opposition (47%) and financing (41%). All that shows that governments and authorities can assist development projects primarily by simplifying regulations and processes for obtaining the necessary permits and clarifying environmental requirements.
In Hungary, according to Andrea Sartori, public institutions have not yet recognized the potential in golf-related developments, especially in exploiting EU Structural Funds. In the past years, golf in Hungary has witnessed a promising development. Due to the growing supply, the programs of the Hungarian Golf Association to raise awareness, as well as the wider media coverage, such as Golf Digest and Golf TV, demand is also growing steadily. Although the country has only approximately 1500 registered golfers, tens of thousands watch the weekly magazine of Golf TV, showing that the popularity of the sport is growing even faster, creating a vast pool of potential players on the long run.
Andrea Sartori said that if golfers’ penetration grows further, it can give a new impetus for new developments as well. He added that in emerging golf markets, such as Hungary, good quality, 9-hole courses, which on average cost a third of an 18-hole course, can be ideal to further raise awareness and interest for the sport, especially around mid-sized cities.
“A higher concentration of well-located, quality courses within a certain area, with the right combination of attractions giving a character to the individual courses, can help make the country become a golf tourism destination in the near future,” he said, citing participants of the Prague Golf Business Forum, who agreed that in order to become a golf tourism destination, the region primarily needs a wider choice of quality golf courses with good accessibility.
Golf Business Forum 2005

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