Golf Business Community

Steve Mona
CEO, World Golf Foundation

Based on numerous conversations with golf course operators from throughout the United States, following are the three key challenges being faced:

Impact of economy: With unemployment hovering near 10% and underemployment estimated at another 5-6%, those who play golf who have lost their jobs are, at worst, staying away from the game entirely, and, at best, reducing their spending associated with the game. Even among the 90% who have not lost their job, a sense of caution about spending has permeated those ranks, which has impacted facility revenues.

Time: In today's time crunched world, individuals are finding it more difficult to devote four or five (or more) hours to a round of golf. Facility operators are trying to react to this scenario by emphasizing family golf activities for the entire family or through pace of play initiatives designed to reduce the amount of time required to play a round of golf.

Difficulty: Many operators are developing player development programs designed to introduce adults to golf in a manner that gets them playing the game at a reasonable level in a short period of time. Get Golf Ready, an adult player development initiative designed to introduce adults to the game in a fast, fun and affordable manner, launched in 2009 and today has more than 1,400 certified facilities in the U.S. alone.


Greg Nathan
Senior Vice President , National Golf Foundation

Two decades ago, golf was undersupplied and the need for more tee-time inventory was significant.  The industry answered, and the 90s and early 2000s saw a boom in golf course construction driven by entrepreneurs looking to use golf as an amenity to sell real estate and resort rooms.  The building boom caught us up with demand and then outpaced demand growth. The imbalance of supply and demand has created a number of challenges for facility operators and here are three we see today:

Downward pricing pressure on greens fees
In the mid-80s, golf facility operators enjoyed a ratio of 40,000 rounds per 18 holes. By 2000 that ratio had dropped to 36,000, and today it is approximately 32,000. The competition for the existing rounds places serious downward pressure on pricing.
 
Lowered Maintenance Standard
Just when operators need to maintain or improve their product in the face of stiff competition, they are unable to due to declining revenues. Some older facilities are also unable to undertake key capital projects.
 
Golfers Managing Down Spending per Round
During the “great recession” that began in 2008, golfers have continued at or near their pre-recession level of U.S. rounds played.  However, NGF surveys show golfers are managing down their spending per round by playing less expensive courses, bargain hunting, playing at off-peak hours, and cutting back on food & beverage, and equipment purchased at the course.


Keith Haslam
Managing Director, Braemar golf

A lot of Braemar Golf’s focus is on new and emerging golf markets and the key challenge is undoubtedly growing the game of golf in the domestic markets. Most projects will need a domestic market to complement any tourist business they may be able to attract and this is not easy. For example, Bulgaria’s official registered golfers number less than 200 according to the European Golf Association yet there are 6 new golf courses which have opened recently or are due to open in the near future and they cannot rely totally on an international market. So developing participation is undoubtedly a key challenge.

Another major challenge is the commercial side of managing a golf operation in what is undoubtedly a changed economic climate. Golf businesses have to become sustainable in their own right and with many projects being linked to real estate which has suffered badly, this has become more of a challenge and necessity.

A third major challenge is education and developing the right expertise. Working in emerging markets has the extra challenge of having a work force who have little understanding, skills and expertise in the various disciplines of managing quality golf facilities. Our challenge is to develop these skills quickly in the local work force and also help create career paths for people and see golf as a profession.


Hasan Besneli
Chairman of the Board, Belek Golf Club, Turkey

The Belek region’s golf course operators are fortunate, at least so far, that we are not restricted with availability/use of water and fertilizers.  Agricultural chemicals that are used in agriculture are also available for use.

There is abundant labour.  However, due to the short history of golf course operations in the region, there is a shortage of qualified green keepers and club managers.

Acquisition of land is the greatest bottleneck.  The current golf courses along the coastal strip in Belek were all built on government leased land.  The Turkish Constitution repealed the law permitting use of government owned forests for tourism purposes.  On the other hand, since land is highly fragmented and agricultural land is very difficult to be rezoned, buying new land for construction of golf courses is perhaps the greatest difficulty faced today.

Fortunately for golf course operators in Belek, demand for tee-times are in excess of what is available.  Given the hotel capacity in the region, even if we could double the number of golf courses, there would still be a shortage of tee-times.


Hanno Kross
CEO, Estonian Golf & Country Club

In my mind the three challenges are in our geographic market:

The marketing of golf overall and cooperating with other golf clubs and/or operators. In our geographic market golf is a very new sport and the lack of cooperation between the golf course owners and the lack of support from the golf union will just multiple the time to make golf a popular sport nationwide in Estonia.

Not to put your energy in cost saving but instead find ways to grow the revenues and therefore improve the quality of the courses and service.

The cooperation between different parties (local governments, NGU’s etc)  to have a mutual understanding of golf’s positive effects – people’s health, revenues from tourism, preserving the nature etc.


Tenniel Chu
Executive Director, Mission Hills Group, China

Here in China, golf course operators are currently facing several challenges. These include a lack of places to play for a golf population growing by 50 percent annually, making the sport more accessible to juniors and incorporating the latest industry agronomic practices.
Mission Hills is doing its part to address these issues.

Mission Hills Haikou along with our 12-course Shenzhen property -- will help meet the country’s insatiable demand for golf. For juniors, we are proud home of the Faldo Series Asia and Mission Hills Jack Nicklaus Junior Championship.

Moreover, our recently launched Mission Hills Golf Series Junior Tour, with its extremely low entry fees, gave access to a greater segment of the population. And we’re constantly working to educate our maintenance team on the latest and greatest techniques to responsibly ensure premium course conditioning.


Chris White
General Manager, Aldar Golf, UAE

The World quite clearly is a very different place today to what it was 18 months ago, and contrary to external opinions the Middle East is affected. A relatively young and developing region is experiencing the global economic climate in a way unlike others possibly because it’s growth was at an incredible pace and also because it has largely only known growth and not significant economic dips.

From a golf perspective certain areas of the Middle East have almost experienced a twofold challenge.

Where like others, individual and corporate spend has been a lot more scrutinized and activities perceived as luxury have been curtailed – this is as broad as a corporate hosting a golf day or a weekend golfer playing once a month or not participating in incremental spend.

An increase in supply of venue has resulted in a greater share of the market, with new facilities often benefitting from first time play or promotional incentives.

From a consumers perspective this has been good – competition can result in the driving down of rates which if sustained and not matched in volume would obviously result in less club revenue. The challenge for operators is to then maintain quality and standards whilst making bottom line, whether this be through man power or product quality.

The business of golf in this region is still a massive part of many countries vision and growth and still represents a very healthy model of achieving the objectives needed to quite literally build communities and cities as well as being able to benefit from golf tourism from almost all markets.


Kwakye Donkor
Marketing and Communications Director, RETOSA
Previous marketing director of Fancourt, South Africa

The global recession has lead to reduced annual golf rounds played on all golf courses due the fact that golf is seen as a leisure and luxury activity by both corporate and avid and that golf rounds been seriously affected by reduced disposable income at all levels of the economy.

One key challenge is drought in the region which has affected the maintenance of courses and thereby the quality of fairways and greens which subsequently affects rounds and revenues.

The other key challenge is uplifting of staff morale and service quality as most courses have retrenched staff due to reduced revenues and that staff are always fear of losing their jobs.


Larry Gould
Publisher of Gould’s Guides to Golf in South Africa

The 3 Key Challenges facing golf course operators are;

First and Foremost in our Geographical Region will be the management of water resources --while obviously all environmental aspects of golf course management are being considered, we are a water scarce country and the demands for water conservation are increasing daily. For many years also many traditional courses were able to obtain water freely (or at minimal charge) and this will no longer be so in many cases, and the costs to the clubs will have a dramatic effect on running costs.

The Second Key Challenge for the country as whole is to re-establish competitive green fee rates (value for money) --as though the standards of South Africa's golf courses have in the past 10 years improved immeasurably, the green fees were increased substantially to compensate for the standards of equipment, labour and manicuring required to have these standards. Obviously due to the global (and local) economic downturn many clubs have seen a drop in membership and visitor rounds severely impacting on their bottom line. It will be a great challenge to re-establish South African Golf as a great value for money golf destination (as it certainly was in the late 80's and 90's) and to generate growth in the local market for a sport that competes with many less expensive choices.

Thirdly (while we might be the flavour of the month internationally due to the FIFA World Cup) a major challenge for the golf course business of South Africa as a whole is to find a way to market our golf courses (Golf Tourism) under a National Golf Banner to once again find ourselves as one of the World's Favourite Golf Destinations. This challenge has been an ongoing task, as while we have superb on-course and off-course choices the promotion of Golf in South Africa has been left to individual estates, tour operators and some times Municipal budgets.  We need to compete globally with those promoting golf as a major part of their tourism portfolios and in South Africa we do not as yet have any National Identity for golf.