Golf Inc - Fall 2010 - (Page 28)
Where golf courses will get built
The economic slowdown has impacted development across the globe. But countries with strong government support can expect BY TREVOR LEDGER course construction to move forward.
he global recession has slowed golf course development almost everywhere. But there are regions where existing courses are thriving and plenty of new projects are in the pipeline. While the free market principle of ‘supply and demand’ has seen many golf courses struggle in the more established markets, that self-same rule has led to growth in emerging markets. But not all of them – why? Nearly 50 percent of golf courses surveyed in the European, Middle East and African (EMA) region experienced falling revenues and profitability throughout 2009, according to the KPMG survey,
“Golf and the Economic Downturn.” Resort and residential courses have been hit harder than stand-alone clubs. In established markets, such as Western Europe and the British Isles, the negative impact has been even more substantial, with 74 and 70 percent of courses, respectively, recording negative impact over the previous 12 months. Indeed, if it weren’t for the relatively unscathed Central European market — a still substantial 36 percent negativity — the overall picture would have been even bleaker. The reasoning behind the crash in traditional markets is a fairly straightforward case of supply and
Golf course in Antalya, Turkey
demand. While economies were booming, the personal and corporate market for golf was high. So, the ever-increasing number of courses and the predicted continuance of the good times led to ever-optimistic predictions of what was needed for golf to thrive. KPMG was even predicting boom times at its own Golf Business Forum as recently as 2006 in Cyprus. What has happened in these markets is a correction of quite epic proportions. Corporate and residential golf communities were the lynchpin of so many developments, and with both of these sectors in free fall, golf became a disproportionate casualty of the economic downturn. Tourist destinations have appeared at either end of the spectrum. Turkey, for example, has recorded a 17 percent increase in rounds played over 2009. South Africa, on the other hand, reported a whopping 90 percent negative impact over the same period — the highest in the region. Many at the Cyprus Golf Business Forum touted South Africa as the next big region for golf developers. The answer to such discrepancies is simple in terms of the big picture, but confusing when put under the microscope. Take, for example, the case of Greece and neighboring Turkey. Greece has recognized golf as an integral part of increasing tourism, but doesn’t have the financial or administrative wherewithal to foster such growth. The country’s current economic problems leave golf as a minor consideration at the moment.
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