Golf Business Community

(Budapest, 18 May 2010) KPMG’s seventh annual Golf Business Forum, at the Gloria Hotels and Resorts, Belek, Turkey, May 12-14, welcomed two of golf’s greatest stars, Greg Norman and Annika Sorenstam, to present them with special awards for services to the sport. More than 250 industry professionals from around the world attended the three-day conference, established as the leading international event for the golf resort and community industry, this year focusing on the theme of ‘Developing Networks, Knowledge and New Business.’

Stars on the GBF podium
Former World Number One golfer, entrepreneur and course designer Greg Norman, received KPMG’s Lifetime Achievement Award 2010 in recognition of his contribution to the global game of golf, while Sorenstam, who has developed a portfolio of successful businesses under the ANNIKA brand, received the Forum’s Entrepreneur of the Year Award.

In a career that has spanned more than 30 years, Greg Norman has won more than 90 tournaments worldwide and has become an influential business leader, building his hugely successful Great White Shark Enterprises, as chairman and CEO. Addressing the audience of more than 250 golf business leaders, investors and developers, Norman said: “It’s been a tough time for the golf business, but things are picking up and credit is being freed up, although it’s not like flicking a light switch on.

“Will we ever get back to the halcyon days? It’s difficult to say. But the era of unlimited budgets for golf developments, as we experienced in the 1980s and 1990s, are gone. I’ve told people in countries such as China that we don’t want to repeat the mistakes of the past, because that has a lot to do with the situation we are in now.”

Norman added: “In the bad times you forge the best relationships and this is why this event is so important. 

To be given this award is humbling. The golf business is something I’m truly passionate about and to be recognised by a business brand like KPMG is a genuine honour.”

Annika Sorenstam, one of the greatest professional golfers of all time and herself an emerging businessperson, was honoured with KPMG’s Golf Entrepreneur of the Year Award 2010, in recognition of the way she has built her significant ANNIKA golf and lifestyle brand since withdrawing from professional play in 2008.

Her businesses now include ANNIKA Academy, ANNIKA Course Design, ANNIKA Financial Group, an online retail shop, a high-end wine business, a clothing collection and a perfume range.

During a fascinating live, on-stage interview with CNN Living Golf’s Don Riddell, Annika said: “My life has moved on since my playing days, both from a business and personal perspective and I now enjoy golf in a different way, which is equally rewarding and still allows me to give something positive back to the game.”

Recovery yet to come for the golf industry
During a captivating opening session discussing the ‘new golf business landscape’, an electronic poll of delegates was undertaken on when they expected to see an end to the economic downturn – 44% believed it would be during 2012 or later, 40% said 2011, 11% thought the latter part of this year, and 5% were already seeing signs it was over.

Andrea Sartori, head of KPMG’s Golf Advisory Practice in EMA (Europe, Middle East and Africa) added: “It is our opinion that it will take some time for the golf industry to recover. Many developments have stopped, been delayed or even cancelled due to the global economic crisis and this is being driven by a lack of confidence, liquidity in the market and a change in consumer demand.”

This view was reinforced by Giovanni Gregoratti, director of European real estate investment banking at Citigroup. He said: “It has been a tough couple of years for real estate finance, in particular. There has been a massive shockwave where lenders were unable to fund new projects and the equity markets have collapsed. Golf, in particular, has been hit badly and it may take longer than most industries to return to where it was.”

Turkey in the spotlight
It was Greg Normans’s and Annika Sorenstam’s first visit to Turkey, and both highlighted the huge potential the region has as an emerging golf destination. Annika also revealed her golf course design business is currently working with developers of the Olivion resort in Belek on an 18-hole ‘family-friendly’ layout.

Greg Norman summarised: “To Turkey I say, good luck. It has made an incredible start as an emerging golf destination.”

Andrea Sartori said: “It was exciting to have Greg and Annika in Turkey to witness for themselves the huge strides this country is making as an up-and-coming golf destination. Our recently published Golf Benchmark Survey spotlights Turkey as a significant emerging destination and shows how this region is currently bucking the downward trend seen in more traditional golf markets. KPMG’s study showed that 85% of golf course owners and operators in Turkey indicated they had not been affected by the global economic situation and 90% have positive expectations for this year.”

The success of the Belek golf cluster in southern Turkey also shows how much a central government can foster progress. Recently, golf was chosen as a key element in Turkey’s long term tourism strategy, aiming to flatten seasonality and to attract an affluent segment of tourists, the international golfing community. The Belek region has already 11 spectacular golf resorts and was voted Golf Destination of the Year by IAGTO (International Association of Golf Tour Operators) in 2008. As stated by Ahmet Ağaoğlu, President of the Turkish Golf Federation, the ambitious plan is to build altogether 100 courses throughout Turkey by 2014, growing both domestic and international tourism demand.

Slow progress in Central and Eastern Europe
Although the CEE region is still considered an emerging region with huge development potential for golf projects, the development of the sector proved to be significantly slower than expected.

“Far too often we see a lack of knowledge on the complexity of golf development projects from planning through construction to operation, and a lack of understanding that having solid financial background in all those phases is a must. In addition, in some countries property taxation, in others the red tape of bureaucracy or overly strict environmental requirements hinders progress,” Sartori said. 

In addition, golf is still regarded as the sport of the elite in most of the CEE region – a fundamental obstacle, which makes local people reluctant to join in the game and governments to support golf developments.  

“Five years ago, Hungary was predicted to have approximately 25 operating golf courses and 12,000 registered golfers by 2013. The country is far from that – there are eight courses and some 2,000 registered players today, displaying very little progress in the past five years. All that is mainly due to the lack of strategy to include golf in national tourism development plans or to help local demand grow by building affordable courses,” Sartori added.

Nevertheless, there are promising signs, too: new courses around Lake Balaton can prove that a well-designed combination of golf, ‘sun and water’ and gastronomy can be a winning set of attractions. Also, Hungary has a huge potential to include the spa, health, wellness and wine elements in that combination.

“Knowing who you are targeting is key: focusing on golf tourism is sensible and feasible around Lake Balaton and Budapest, where both air accessibility and supplementing attractions are available, while in other parts of the country, developers should target mainly local residents with a different product, affordable and playable courses, thus helping local demand grow. Involving the whole family in the game can also raise its popularity significantly – this latter being a topical universal challenge for the game today,” Sartori explained.

Some countries in the CEE region provide source for optimism too: in sunny Bulgaria, golf was made part of the country’s tourism strategy, with the government providing preferential regulations to acquire land and easing on the administrative burden, mainly hoping that developments will offer more jobs and polish worsening unemployment statistics.
“As a result, there are eight golf courses in operation today, including signature courses designed by Nicklaus, Player, Harradine, McGinley and Woosnam. The facilities are around the capital Sofia and on the Black sea coast and provide second homes mainly for foreigners,” explained Kiril Nedev, founder and owner of Golf Club Ibar near Sofia, the first Nicklaus design golf course in South-Eastern Europe.

Estonia provides an alternative example of success: with a climate unlikely to attract golf tourists, developments target local communities. Seven affordable courses have been built in the past years, resulting in a boost in demand and penetration – the number of registered players has grown to about 1,500, almost as many registered golfers as in Hungary, which has a population of nearly seven times higher.   

Poland is also in the forefront of progress in the region, with its 34 clubs, including thirteen 18-hole courses, several 9-hole ones, and also some stand alone driving ranges. The latter ones are key in helping penetration grow – according to the Polish Golf Union the number of golfers has risen to 9,000 in the past years.

“All these elements create very attractive market prospects for the future of golf in Poland. Right now there are three ongoing projects, and we see many investors considering new developments, therefore some further projects are expected to be completed within the coming years,” Maciej Kawecki, president of Warsaw-based GolfProperties.pl commented.

The Czech Republic, where golf was not banned in the communist era, displays a unique success story in the region – both demand and supply are far above the regional average with approximately 80 courses attracting some 35,000 local players. 

Summing up the 2010 Golf Business Forum, Andrea Sartori said: “The global golf industry clearly has many challenges and this year’s Golf Business Forum has been an incredible opportunity for over 250 industry professionals to network and share business opportunities and best practice.”


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Other comments from speakers in the headline session, The New Golf Business Landscape, included:

Gary Michel, President and CEO, Club Car Inc
“The last 18 to 24 months have been difficult for most businesses. Customers have delayed purchases and it has given many businesses the opportunity to look at how they do things and adapt to what customers are looking for and, essentially, that is value.”

Marc Player, CEO, The Gary Player Group
“Our business has been spread internationally so our exposure in one particular area has been limited. The economic downturn has affected our business in the US and, like most companies, I can’t say we saw it coming, but we are now equipped to manage it.”

Steve Mona, CEO, World Golf Foundation
“On the operational side at resort golf destinations, people stopped travelling and the corporate market collapsed. On whatever metric you use, the US is way off where it should be, but it would be unfair to say every aspect of golf is down.”


A range of other topics were debated and voted on, during this year’s KPMG Golf Business Forum, including:

Which will hinder the growth of golf the most?

• Competing leisure activities -- 11%
• The time needed to play a round of golf (18 holes) -- 31%
• Inflexible membership opportunities -- 14%
• Affordability -- 27%
• Perception as elitism -- 17%

Steve Mona, CEO, World Golf Foundation
“In America, regions that have a lot of 9-hole courses which offer affordable, local golf give people the chance to take up the sport and try it for the first time. We have to get people into the game and I believe this is one way of doing it.”

Andrea Sartori, head of KPMG’s Golf Advisory Practice in EMA (Europe, Middle East and Africa)
“We must make the game of golf more accessible to women and families. If I take the United Kingdom as an example, only 15% of golfers are women, versus more than 35% in Austria, Germany and the Netherlands.”

Will golf see the benefit of becoming an Olympic sport?

• Significantly -- 48.1%
• Benefit, but not significantly -- 26.3%
• Limited benefit -- 23.3%
• Not at all -- 2.3%

Andrea Sartori, head of KPMG’s Golf Advisory Practice in EMA (Europe, Middle East and Africa)
“The benefits of The Olympics will be felt in emerging markets, China, India, Eastern Europe and South America, where more money will undoubtedly be released for the development of the game.”


Notes to editors:

The Golf Business Forum, developed by KPMG's Golf Advisory Services in Budapest, is a unique platform for professionals involved in the golf business industry to meet, learn, exchange ideas and do business in an exciting and memorable event. The GBF has quickly established itself as the foremost golf industry event, where relationships are forged and business is done. Since the event was introduced in 2004, KPMG has held seven successful Golf Business Forums, each year taken to a different venue and location, such as Budapest, Prague, Cyprus, Ireland, Wales and this year to Turkey. The 2011 GBF is to be held in Dubai.


For more information, visit: www.golfbusinessforum.com


Contacts:

KPMG contact:                      
Zita Válint                        
KPMG Golf Advisory Services               
zita.valint@kpmg.hu                    
tel: +36 1 887 7389                   

Media contact:
Gary Firkins
Landmark Media International Ltd
gary@landmark-media.com
tel: +44 1780 752790