KPMG’s Golf Advisory Practice has published a new Golf Benchmark Survey focusing on Japan, the world’s second largest golf market.
The report – free to download from www.golfbusinesscommunity.com – reveals the Japanese market boasts close to nine million active golfers, ranking second only to the United States in terms of demand, and approximately 2,350 golf courses, third after the UK in terms of supply.
The membership business model is still predominant at golf courses in Japan, with 18-hole courses averaging nearly 1,500 members and approximately 40,000 rounds played per year.
Based on 2008 business performance, the average revenue for 18-hole golf courses is USD 5 million, with a profit margin of 10-12%.
Andrea Sartori, head of KPMG’s Golf Advisory Practice in EMA, said: “This is the first time the Golf Benchmark Survey has focused on Japan and the results are fascinating.
“From the 1950s onwards, golf in Japan grew rapidly and it is a good case study of how golf as a sport and a business can take root in a fertile economy. What also makes Japan interesting is the affect the economic downturn of the early 1990s had on the membership model and consumers’ response to this. There may well be lessons to be learned for other countries and markets today, given the troubled economic times that persist in some regions.”
Among the factors that characterize the golf market in Japan are:
- approximately 15% of clubs members are corporate members
- caddies represent the highest share of staff (38%)
- 92% of courses have a golf cart fleet, with 56 carts per 18-hole course on average
- more than 80% of all carts have five seats, suitable for four players and a caddie
- 80% of courses surveyed sell tee times via the internet, online sales making up 15% of all bookings (of this, 11% were booked through internet agents and 4% directly via the club’s site)
- most golf courses require new members to pay an initiation fee as well as an annual due – 60% also require the payment of a deposit
Initiation fees at clubs in Japan vary region-to-region from USD 4-8,000 to 25-30,000, with annual dues ranging from USD 200-500 per annum.
The total cost of playing 18 holes, including green fee, cart fees, caddie fees and taxes is USD 70 for members and USD 110 for visitors on a weekday, and USD 75 for members and USD 160 for visitors on weekends.
Despite the global economic downturn, golf courses in Japan remain positive about the outlook for business. Approximately 80% of the 380 golf courses surveyed said they are optimistic about their business performance in 2010 with 34% expecting ‘excellent’ results and 46% foreseeing ‘good’ returns.