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Golf Industry Set to ‘Tee Up’ in Central & Eastern Europe; 
Currently Fifteen Golf Courses Under Construction
December 2003 - Golf has seen a dramatic development in the last two decades worldwide. Although still regarded as a sport for the elite, it is becoming more and more popular in Central and Eastern Europe too. As the economic landscape of CEE continues to develop and households have more discretionary income for leisure activities, the number of golfers is expected to increase. This will also occur through television coverage and a greater proliferation of courses, according to dr. Andrea Sartori, Partner at KPMG Hungary and Head of Travel Leisure and Tourism group of KPMG in CEE.

Introduction

Traditionally Ireland and Great Britain have shown the greatest enthusiasm towards this sport, but the steady growth of golf in Western Europe over the past twenty years is well documented. While the number of courses has more than doubled since 1985 reaching close to 6,000 golf courses today, the number of registered golfers has also grown by an average 10% per annum to 3.8 million. In addition, the European Golf Association estimates that there are a further 2.4 million players in Europe who are not affiliated with any specific club.

Although supply varies greatly from country to country, the popularity of golf has clearly expanded across Western Europe. 

Since the early nineties, for example, the Nordic countries have experienced an accelerated growth in the demand for golf. Today Denmark, Norway and Finland exhibit a strong demand for this sport, with Sweden achieving an impressive 5.9% penetration (i.e. one in seventeen Swedes are registered golfers). It is important to note that the availability of golf courses has positively stimulated further demand in these countries.

Spain and Portugal are becoming increasingly popular with golfers from all over Europe. These counties have long been popular tourist destinations and golf is an added attraction to their fine weather conditions which lend to the availability of golf courses. As can be expected, most of these courses are situated near traditional tourist regions.

As a result of increases in both leisure time and disposable income, golf is forecasted to experience continued growth all over Europe, especially in non-traditional golfing regions like South Eastern Europe and Central and Eastern Europe.

Golf in Central and Eastern Europe – past and present

Previously, the game of golf was not up to par in CEE and has only recently been allowed the opportunity to properly develop after 1989. During the socialist era the sport was associated with capitalism and was consequently banned for more than 40 years. Golf courses were shut down throughout the region and golf, therefore, was unable to develop. This is an effect that can be still felt today in Croatia, Romania and Bulgaria, countries which only offer one golf course each.

As an exception to the rule, golf was permitted during the socialist era in the Czech Republic. The game, in fact, has a strong history there, with courses in Bohemia among the first in Europe dating back to 1904. With currently more than 40 golf courses (including 9-hole courses) and close to 16,000 affiliated players (i.e. 0.16% of the country’s population), the Czech Republic is by far the most developed golf market in the CEE Region. 

With eight golf courses and over 4,800 registered golfers, Slovenia is the market with the highest level of market penetration (i.e. 0.25% of the population) in CEE.

Since the political changes in the early nineties, awareness of and interest in the sport have grown dramatically. Today golf is re-emerging in the CEE Region as a premier leisure and sporting activity and it is becoming more popular every year. For part of the population golf has become fashionable and playing it confers status. As in Western Europe, organizing company golf tournaments has become more common throughout the region.

Developers have responded to the growing interest in the game, and the supply of golf courses has consequently grown at an impressive rate over the past few years. There is still sufficient land available, at much more affordable prices than in Western Europe, near urban centres and popular tourism areas.

The table below presents the development of golf courses in eight CEE countries: Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia.

Development of supply in the CEE Region (2000-2003)

Type of course
2000
2001
2002
2003
27-hole
2
2
3
7
18-hole
13
16
20
26
9-hole
23
32
36
47
Total
38
50
59
80
Growth
-
32%
18%
36%
Source: KPMG’s research based on National Golf Federations data (2003)

According to research performed by the Travel, Leisure and Tourism Group of KPMG in the CEE Region, there are currently fifteen golf courses under construction in the region and more than twenty in the planning stage (an impressive seven in Hungary alone). As in more mature markets, new developments tend to include a strong real estate development component (e.g. residential units, second homes, wellness hotels).

The availability of additional golf courses in recent years has positively stimulated the development of demand. According to the European Golf Association, there are approximately 25,000 registered golfers currently in the aforementioned eight countries, which means an average of 315 affiliated golfers per available golf course. With a population of more than 100 million people, the penetration of golf can still be considered very low in this part of the world.

The following table summarizes the current levels of demand for and supply of golf courses in the CEE Region.

Golf demand and supply in the CEE region (2003)

Country 
Population (000’s)
Registered golfers
Golf courses
Avg. # golfers per course
% of population
 
Slovenia
1,936
4,812
8
602
0.249
Czech Rep.
10,249
15,977
43
372
0.156
Slovakia
5,430
1,445
3
482
0.027
Hungary
10,045
1,330
8
166
0.013
Croatia
4,422
168
1
168
0.004
Poland
38,623
1,258
15
84
0.003
Bulgaria
7,538
70
1
70
0.001
Romania
22,364
70
1
70
0.000
 
Total CEE
100,607
25,130
80
314 
---
Source: KPMG’s research based on National Golf Federations data (2003)

The Future - a potential ‘hole in one’ for the region

All the trends indicate that the future of golf in Central & Eastern Europe looks bright. Golf is forecasted to experience fast growth over the next decade throughout the CEE Region for at least the following reasons:

  • EU funds made available for alternative utilization of agricultural land;
  • Rising discretionary income and leisure time for the region’s population;
  • Wider television coverage and the successful organization of international championships; and
  • The greater proliferation of courses.
Assuming an average annual growth rate of supply of 15% per year (i.e. twice the average in Western Europe in the last decade), it is not unrealistic to assume that in ten years there will be close to 300 golf courses available in the CEE Region.

From a demand perspective, assuming an annual rate of increase of 20% of the number of affiliated golfers in the CEE Region over the next 10 years (in Western Europe the expected growth is around 10%), we can estimate that by 2012 there could be more than 130,000 affiliated players in Central and Eastern Europe.

Golf tourism’s potential

According to the World Tourism Organisation, by the year 2020 it is estimated that nearly one in every three visitors to Europe will choose a Central or Eastern European destination. Golf can certainly be an added attraction to the regional supply of existing tourism assets.

In the region there is a tremendous potential for the development of golf tourism, especially in countries with magnificent natural assets like Croatia’s pristine beaches and islands, or in worldwide famous "spa countries" like Hungary and the Czech Republic, or in the unspoiled landscapes of Slovakia, Romania and Bulgaria.

Finally, international golf tourism is a market segment increasingly sensitive to the rising costs of golf and is constantly seeking novel and diverse golfing opportunities.

Conclusion

Golf as a sport will certainly receive more interest and gain local popularity in the future. Expected growth in the supply of golf courses will also help to stimulate demand for golf. However, if golf is to continue to grow in CEE, it should become more affordable through the realization of new projects which meet international standards, but which do not entail development costs that make green fees and membership unaffordable.

Golf tourism can play a vital role in the future development of the economies of Central and Eastern European countries, as the industry can be an engine for economic growth and job creation. Governments in this region would be wise to exploit the opportunities of this growing industry.


Dr. Andrea Sartori has been working for KPMG since 1994. He is a Partner at the Budapest office and joined KPMG Hungary in 1999 in order to establish the KPMG Travel, Leisure & Tourism Group in Central and Eastern Europe and increase the profile of the firm within the hospitality, travel and tourism industries. Before joining KPMG in Central and Eastern Europe, Andrea was the manager of the KPMG Leisure & Tourism Group at the Cape Town office. During the five years spent in Southern Africa and in the last fours years in CEE, Andrea has taken part in numerous golf related assignments.

Andrea's main areas of expertise include tourism development planning and implementation strategies; project conceptualisation and project management of hospitality and tourism related projects, market and financial feasibility studies, valuations, operational review and business planning for hotels, resorts, golf courses and timeshare developments.

.

 
Contact:

Andrea Sartori
andrea.sartori@kpmg.hu
KPMG
H-1139 Budapest
Váci út 99
Telephone: +36 1 270 7100
Fax: +36 1 270 7392
www.kpmg.hu

Also See: Hungaria Golf Ltd. Building a 200-room Radisson SAS Resort in Buk, Hungary / March 2002


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