KPMG predicts steady growth in the golf industry in Europe, with over 3000 new golf courses to be built in the next 15 years, with Eastern Europe and the Mediterranean countries displaying the most spectacular expansion. This was revealed at the third annual KPMG Golf Business Forum, held at the InterContinental Aphrodite Hills Resort Hotel in Cyprus last week. The two-day event brought together some 210 major stakeholders in the business of golf including developers, investors, tourism officials, designers, suppliers and operators from 31 countries.
A KPMG analysis, presented by Andrea Sartori, head of the KPMG Travel, Leisure and Tourism group in Central and Eastern Europe, founder and organizer of Golf Business Forum, reveals that Europe, Middle East and Africa have over 4.2 million registered golfers and approximately 6,750 golf courses, with Europe having an obvious dominance due to its golfing traditions.
In recent years, approximately 1,000 new golf courses have been established annually worldwide. Europe has seen continuous growth in the past twenty years – the average annual growth of demand was 6%, and the average annual growth of supply 4%. Based on projected domestic and golf tourism demand, KPMG estimates that by 2020 the number of golf courses in Europe will grow from the current 6,292 to approximately 10,000 and the number of registered golfers will reach 7m from the current 4.1m.
According to Andrea Sartori, this might look an optimistic scenario with an estimated 22 courses constructed monthly, however, it calculates with demand growing only by 3.5%, almost half of the annual growth in the past twenty years. Also, KPMG estimates the penetration rate of golfers in Europe would reach 1.2% from today’s 0.7% – a figure seven times lower than that of the US today.
“Our calculation models a free market, where change of supply is strictly correlated to the one of demand. Several factors, however, can be major obstacle to development, such as permitting difficulties, “red tape”, availability and price of land, environmental opposition and availability of water,” Sartori added.
On the other hand there are numerous trends that support a forecast of spectacular growth in demand for golf. We have an aging population – by 2050 half of the population of Europe will be above 50 years of age. Senior age groups are also often more affluent, have more leisure time and can afford more frequent travels. Thus, while the number of golfers is expected to grow by 66 %, the number of senior golfers is expected to double by 2020. New emerging economies, with a rise in disposable income, cheaper travel, increasing air traffic and accessibility, along with sports and fitness becoming as a lifestyle element, and the wide media coverage of the sport give a further impetus to expected growth in demand.
KPMG predicts that the Mediterranean countries, Eastern Europe and the Middle East will be in the forefront of golf development projects. In the past years, four of the top five countries in Europe that witnessed the highest growth in golf penetration rates are located in the CEE region, namely the Czech Republic, Slovenia, Hungary and Slovakia. In the Mediterranean, besides the more mature markets of Spain and Portugal, there is great potential in Cyprus, Greece, Turkey, the south of Italy and Croatia.
Demand is also fast growing in the Middle-East (annual growth of players in recent years was 15%), however, as golf course development costs are considerably higher, the region represents less than 0.5% of the total EMA supply. Yet, some of the highest profile developments are currently taking place in this region. Dubai for example is seen by both golf tour operators and golf course architects as having one of the highest potential of becoming a significant golf tourism destination.
Although golf participation rates are fairly low in Africa – about 500 golf courses with over 130 thousand registered players – countries like South Africa and Mauritius are popular golf tourism destinations. Other popular tourism destinations like Morocco, Tunisia, Egypt and Kenya are also likely to develop supply.
KPMG Golf Business Forum www.golfbusinessforum.com