Golf industry showing signs of recovery
Golf courses in Europe, the Middle East and Africa experienced an upturn in business in 2011, according to new research compiled by KPMG's Golf Advisory Practice.
Of the 380 golf course owners and operators surveyed, more than half reported more rounds played and higher revenues in 2011 compared to 2010.
It is the first time since the onset of the economic downturn in 2008 that the annual survey - free to download from www.golfbusinesscommunity.com - has returned positive results.
There was a similar improvement in sentiment, with 57% of all facilities surveyed saying their business performance was 'good' or 'excellent', and only 8% as 'poor' or 'very poor', compared with 44% and 17% respectively in 2010.
Golf courses in the Middle East and North Africa region outperformed other markets in 2011, with 78% of facilities surveyed reporting 'good' or 'excellent' results, although some courses in North Africa experienced poor results due to political instability.
Golf courses in Great Britain and Ireland, the largest golf market in the EMA region, reported strong results, with 61% of courses reporting 'good' or 'excellent' results. However, courses in Eastern Europe returned the weakest results with nearly a third reporting 'poor' results.
The survey, which also monitors golf facilities' future expectations, as well as measures taken to improve profitability, found:
- Three-quarters of all operators surveyed had taken specific measures to improve profitability - specifically, 56% cut costs and 37% cut staff
- 58% of courses were profitable in 2011, compared to 49% in 2010
- A quarter of golf courses reported an operating loss in 2011
- Golf courses in Great Britain and Ireland, and the Benelux countries were the most profitable (more than 70% each)
- Green fees were increased at 38% of facilities
- Annual membership fees were increased at 56% of facilities, each by an average of 5-10%.
- Half of golf course owners are making capital investments in 2012
- About one in ten golf course owners are considering selling their facility.
In terms of future outlook, 46% of golf facilities expect an improved year in 2012 and 37% foresee similar performance to 2011. Meanwhile, 17% of the operators surveyed forecast a decline in performance this year - operators in Western Europe, the South-East Mediterranean as well as in Great Britain and Ireland, being the most pessimistic.
Overall, only a quarter of operators surveyed have reached the same business performance level as before the economic downturn, while close to half do not expect to fully recover before 2014.
Andrea Sartori, head of KPMG's Golf Advisory Practice, said: "While there are signs that golf courses in Europe, the Middle East and Africa have started to recover from the economic downturn, the speed of that recovery is variable across the region and it will still take time to return to pre-downturn levels of business performance.
"Although much depends on the overall economic climate, active measures for improved business performance can significantly help facilities to develop. Our survey shows that the golf course businesses that are performing well are successfully identifying and reaching the right target customers via effective communication channels, offer a well-defined service mix within an appropriate pricing policy and are active in improving their cost efficiency."
The survey results will be addressed by key industry professionals at the upcoming Golf Business Forum, to be held at the Renaissance Tuscany Il Ciocco Resort & Spa, September 17-19, 2012.
To download the full report, please visit www.golfbusinesscommunity.com