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Talking Golf
Golf's big business in the 21st century (Bigger than big, if we're talking about the middle East). Dollars are spreading the game's gospel to nations where it's just a few decades (or years) old. Golf has long shed its homespun, rough-and-ready links-washed origins in the British Isles, but, as it continues to convert the unconverted, it has lost none of its capacity to captivate. The 5th KPMG Golf Business forum-held at the Ritz-Carlton Powerscourt Hotel, County Wicklow, Ireland-had as its theme this year, 'Golf Resorts and Golf communities'. It was more than a fascinating peek into the global industry golf has become.
By Sharad Kohli
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| The pastorally picturesque Irish countryside outside the Ritz-Carlton Powerscourt. (Inset) A panel discussion in progress (left), and an interactive audience. |
The KPMG Golf Business Forum shed much light on the burgeoning market for golf resorts and golf communities away from the United States and Europe and into newer territory. It's a trend that reflects golf's continuing growth and global reach. And hosting the Forum in Ireland, a land rich in golfing tradition and home to some of the world's most beautiful golf courses, was a way of looking back to look ahead.
There was plenty to interest India at the conference, which brought together over 300 participants from 46 countries, including representatives from the fields of construction, real estate, property development, public relations and marketing, masterplanning, golf-course design, project management, administration, recruitment, course maintenance and tourism, among others. This was much more than a talk shop, however. It was a platform to do business (and in a more relaxed setting), and strike deals (possibly over a Guinness or two). Indeed, it was at the 2007 Forum that the European Tour's 'Race to Dubai' was conceived.
Though there's a credit crunch facing the world economy, many of the up-and-coming golf markets seem to be immune to the crisis. "Outside the main areas and in the emerging markets, economies have a lot of momentum and there is a lot of domestic demand being generated," pointed out Andrew Smith, KPMG's Chief Economist.
"The good news is that these economies should continue to rack up strong growth. We are seeing a middle class, perhaps golfers, emerging quite quickly in countries around the world." The KPMG Golf Benchmark Survey 2007, in its regional report on India, paints an optimistic picture: "Market trends and recent investments seem to confirm that the future growth of golf in India could be linked to the development of a certain number of golf communities and golf resorts aiming at the local market and, to a certain extent, international demand."
"GOLF SHOULD BE FUN"
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| Jack Nicklaus has lost none of his enthusiasm for the game. |
At least until Eldrick 'Tiger' Woods slips past his 18-major mark, all talk of the "Greatest golfer to have walked the planet" can be quashed. That man is Jack Nicklaus, 'Championshipper' extraordinaire and a paradigm of the sportsman-gentleman. The 'Golden Bear' received the 'Lifetime Achievement Award' at the 5th KPMG Golf Business Forum.
He was paid a glowing tribute. "The legacy Jack Nicklaus has left as a player can be rivaled only by the legacy he is leaving as a golf-course designer." The 68-year-old legend quipped, "A lifetime achievement award? That means it must be getting near the end!"
Nicklaus' gusto for golf has not waned. "To see the game grow-it's been kind of fun," he enthused. And creating 18 holes from a piece of land was just another way to stay involved. "I've always been competitive and once I'd given up tournament golf, course design became my competition."
Nicklaus spoke insightfully on the changing face of a game that he embellished. His arguments for golf to be subsidized are sound ones for the Indian game.
"We should create enough facilities for the public, and the youth, to be able to play golf. If you want to take golf to the masses, get the government involved."
Nicklaus was especially forthright on the topic of equipment, which, he felt, had contributed to golf's declining appeal across all age groups. "The biggest problem we have today is keeping golfers in the game. You have golfers taking longer and longer to play the game because of the equipment.
"You used to have golfers being able to play golf in three-and-a-half hours or less. Now, if it takes four-and-a-half hours or less it's a miracle. What sporting event anywhere in the world takes longer than three hours? If golf took three hours you could tell your wife that if you left the house at 8 a.m., you'd be back for lunch at noon. Now if you leave the house at 8 a.m., you'll probably be home at 4 p.m., wasting a whole day!
"As a result we have a whole lot of kids in my country-never mind anywhere else-who don't play, or who don't play very much. They play other sports. That's a shame and it's all been dictated by equipment." Nicklaus felt that today's flying dimpled orb had taken the charm out of golf, and blamed the "ego of golf ball manufacturers" for this sorry state. "If you've got golf balls traveling that far, it just ruins everything that has been traditional about the game.
"It's all because of the threat of lawsuits. Frankly, it's ridiculous that manufacturers can control the game of golf. The game of golf should remain the same." He maintained that it is within the power of ruling bodies to stop technology swamping the game. "It would be very simple for the R&A and the United States Golf Association to bring the golf ball back 10-12 percent."
Nicklaus lamented the fact that the club golfer was getting an increasingly rawer deal. "The average golfer needs a golf course of around 6,500 yards or 5,900 meters-we try to keep it in that area.
"You can put the back tees anywhere you want. The worst thing that can happen is for the average golfer to walk out and say this golf course is too tough. You want the average golfer to walk out and have fun. If some people want to punish themselves, that's fine but to me the game is supposed to be fun."
And he added that making courses play longer, to stop the 21st century pro from continuously pounding it off the tee, would only punish the journeyman golfer. "You can't restrain length hitters. If you do that, you'll take the average pro away from the game, like it's been done at Augusta."
Times have certainly changed, both for the playing professional and the course architect. With ecological depredators the wrong side of political correctness, today's designers have to follow strict regulations. "Take Muirfield Village G.C. (host of The Memorial on the PGA Tour)-I couldn't build it today because of the rules," admitted Nicklaus.
"We play golf to bring man and nature together but we have to keep in mind local environmental issues. I want to build as good a golf course as possible, and as naturally as possible." All participants in the game would do well to heed the great man's words.
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The middle class that Smith referred to resides in central and eastern Europe, Russia, the Middle East, China and India, and South Africa (and, to a lesser extent, North Africa and Turkey). As ever, supply and demand dictate investment strategy: there has to be enough people teeing it up, and teeing it up frequently, for golf courses and golf resorts to be monetarily workable. Dana Garmany-Chairman and CEO, Troon Golf, the world's leading luxury-brand golf management, development and marketing company-observed a paradox. "Where there aren't any golf courses required, they're being built; where they're needed, there's no construction."
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| Tenniel Chu of Mission Hills spoke of Chinese golf's big ambitions. |
Garmany touched on the difficulty of getting people to start playing what is still perceived as a costly pastime. "In developing countries, government subsidies are required to get people to participate in golf in larger numbers." It was felt that the public sector has a crucial role to play. Public courses in the U.S., owned by municipalities, don't make money but make the game more accessible, while the public-private partnership in Australia has strengthened the game's grass-roots Down Under. Making golf an Olympic sport (to get access to public funding) was also broached.
"You don't need to be out on the golf course for 18 holes, or have a handicap," argued Garmany. "Open up the game to people; make it a fun game. Don't cut out the people in these emerging markets." Erik Larsen, Executive Vice President of Arnold Palmer Design, said golf needs to think out-of-the-box to broaden its appeal. There's "value", he said, in "alternative" golf courses like par-3s-a fun way to introduce kids to the sport.
THE HARRADINE WAY
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| Peter Harradine, a course architect from the old school. |
Peter Harradine, Managing Director and Chief Architect, Harradine Golf-designers of Boulder Hills Golf & Country Club, the new 18-hole championship layout in Hyderabad-has spent 40 years in his line of work. In that time, the golf course has gone from being, well, a golf course to just a bit-part player-and not necessarily the main part-in the colossal ambitions of developers.
"Golf's no longer a game. It has become an industry, a business," said the genial Harradine at the 5th KPMG Golf Business Forum. "In days past, golf courses were made for golfers to play golf. Now, it's to make money. That may be good for the real estate developers but not so for the golfers."
Harradine provided a quirky counterpoint to his fellow panelists in the discussion on the 'Latest trends and concepts in golf resort and golf community masterplanning'. A gadfly in the world of course design (much like Ronald Fream of the U.S.), Harradine has, with admirable pertinacity, refused to abandon the certainties and traditions that have served golf so beautifully-because they've served Harradine Golf well, too.
"I'm fighting for the golfer. The developers are fighting for profit. For me, the golfer is paramount-he should have a great experience playing my course."
Greed, believes this third generation Harradine, is the thrust behind many a 'golf resort' project. "For developers, the bottom line counts. The golf course actually becomes a liability once the project is finished." Harradine feels there's an over-obsession with building golf resorts; such a trend has drastically shortened the life-expectancy of the standalone.
"Yes, golf does sell real estate. But the golf course is just cosmetic," Harradine contends. "It's a bait, an accessory to the whole project to sell real estate. And it's all profit driven. The managers, rather than the greenkeepers and course superintendents, have the say. At the end of the day, it's a compromise between the golf course and the real estate. We want more for the golf course, the developer wants more for his villas and real estate.
"You can debate whether that's good or bad." Harradine did not shy away from adopting a contrarian stance at the Forum. While many were sounding the death knell of standalone golf courses, the Switzerland-based architect begged to differ, insisting you don't need real estate to bring in the dollars. "Standalone courses can and do work, even in this day and age."
Harradine has little time for former pros-turned-course designers, or those still plying their trade but already embarked on a career in designing. "They charge huge fees for their work, and are rarely on the ground supervising." For Harradine, these big names are lightweights in the field of golf course architecture.
"There are a lot of designers out there who do a lot of great work but you never hear of them. That's because they don't ever use PR." You don't need a marketing hot shot, says Harradine, to point out how good a golf course is. "Call me anti-marketing but your work should be able to speak for itself."
But despite his broadsides against developers, Harradine is pragmatic enough to admit that golf resorts have contributed to the game's health. "If we didn't have these developers, we wouldn't have these golf courses. I'm glad that golf does sell homes so that we can all play golf."
But, there's a Harradine caveat. "Keep those urban architects at a distance!
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"You don't need to be out on the Golf course for 18 holes, or even have a handicap... open up the game to the people, make it a fun game."
Dana Garmany, Troon Golf |
According to Larsen, a golf course should be "two courses in one"; this, he believed, acts as the best buffer against the space-age technology that is colonizing the game. "One course for the 24-handicapper and one for the pro. It's easier to do that now than it was in the past. It's easier for me, as an architect using the two-in-one theory, to compete with equipment advances."
TARUDHAN VALLEY GOLF RESORT, Gurgaon
Tarudhan is 75 acres of lush golf land and swish real estate next door to the Classic Golf Resort in Gurgaon. It is part of a new lifestyle trend in India, aimed at the aspiring, high-end client with money to spare.
Silverglades, the developers behind this gated golf community, were also responsible for the Classic. "Tarudhan's first customers came from Classic," reveals Silverglades' Director, Anubhav Jain, whose father, Pradeep Jain, conceptualized CGR. "The demand for CGR pushed the Tarudhan product."
Jain wants to give the customer an "international golfing experience". The concept of playing golf, which earlier involved turning up at the local club and playing your regular 18 (or nine) holes, has undergone a sea change. "The Classic changed all that," says Jain. Incidentally, apart from the 9-hole golf course (designed by Quebec-based Graham Cooke) and luxury homes (soon to be ready for occupation), Tarudhan will also have a resort with a 52-room hotel (including bar and restaurant), a conference center, and a golf academy.
Tarudhan has prided itself on its exclusivity; the buzz around it has been less through advertising and gimmicks than word of mouth and reputation. "We
were careful in building a brand, in associating with the best, be it architects, consultants or contractors," says Jain.
It's not just those who can swing their woods and irons who are the targets of this desirable piece of real estate in Gurgaon. Non-golfers eager to tee it up have also bought into the Tarudhan experience. "There are a lot of people who want to start learning the game, and also have their kids take up golf," says Jain.
Such getaways are the future. "Very few standalone golf courses make money," claims Jain. "There are 2500 rounds played on the Nicklaus course at Mission Hills (China) but they're making money on the real estate and not just on the golf."
Silverglades has already begun work on a mega township outside Ludhiana. The 280-acre site here will have an 18-hole Nicklaus design championship layout. And there are plans to set up across India; land, says Jain, has already been acquired in Mumbai.
Yet creating golf-centric communities from the dust (or farmland) is not in the least bit easy. Any developer, says Jain, can acquire land around a golf course: It's what you do with that land, and how well you implement your vision, which matters. "It involves a lot of work, a lot of money, and a lot of expertise. You need the right people working on the project.
"But, if you know what you're doing, and if you've got the resources to go forward with your project, then it's very much viable." Jain feels the current cost of land is a stumbling block to more such developments getting off the drawing board. "Once there is a correction in real estate prices, I foresee such projects becoming more feasible."
Jain also expects to see more tourists flocking to places like Tarudhan. "The tourists who have played at the Classic-Japanese and South Koreans-want to stay at Tarudhan. The hospitality standards have been set by the Classic, and Tarudhan has been born out of that."
It's a whole new ball game now.
S.K.
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But golf clubs also have to change tack or lose out altogether. The game is a long way off from its chummy male-bonding roots. "No longer is golf an old boys' club. Golf clubs these days have to be more family oriented," said Gerard Fagan, Director and Shareholder, Oceânico Group of Companies, Portugal's top leisure and golf resort developers.
Michael Davern, Chief Executive of the K Club (host of the 2006 Ryder Club), agreed. "If you want to sell real estate, you have to sell to the family." Above all, though, golf needs to be more inclusive. "Golf has to be made affordable to become more accessible," said Andrea Sartori-Partner, Head of Real
Estate, Leisure & Tourism Group, KPMG Advisory Services, and Founder of the Golf Business Forum.
OXFORD GOLF & COUNTRY CLUB, Pune
Built on rolling terrain a short distance from Pune, the Oxford Golf & Country Club combines the best of two worlds: it has a challengingly gradient-infested 7030-yard championship layout, and stunningly attractive residences. This golf-cum-real-estate project, aimed at the Indian middle-upper class, could well be the touchstone for future such developments in India.
The course-designed by Pacific Coast Design of Australia-is part of an integrated township (architects, Sandy Babcock of Miami, U.S.; masterplanners, EDSA, also of Miami). Once complete, the project will have a country club, spa, luxury hotel (with conferencing facilities), and serviced condominiums, but the draw will be the golf course. For, it's the golfer, says Anil Seolekar-Director, Oxford Properties (the project managers)-who makes up the "primary market".
"Oxford G&CC is fantastic value for the golfer, while for non-golfers, the appeal is the 150 acres of golf landscape." Clearly, the idea is to get more people hooked on to the game. Incidentally, an international-standard golf academy will also be coming up-added attraction for golfer husbands and wives and their families. Oxford is looking at wooing industrialists from Pune and Mumbai, corporate leaders from across the country, IT professionals, NRIs, and celebrities from the entertainment world-and maybe get a few to start teeing it up.
Building this golf-centered project outside Pune-the second 18-hole course in the area after Pune Golf Club-has involved much risk for Seolekar. "The market for golfers is still very much at an early stage as compared to mature markets in the U.S.A. and Asian countries. And that's mainly because of the viability [or, rather, the lack of it] of such a venture, the maintenance costs, and accessibility.
"It also depends a lot on the catchment area-there still isn't that many people playing the game." (Less, certainly, than in the north). But Seolekar is confident that Oxford will set standards both in India and globally. "We want to make Oxford G&CC a destination on par with similar international resorts, and also to make a name for the city."
Oxford will be homing in on Pune and Mumbai residents, enticing them to buy a weekend retreat. And by running coaching programs for juniors at the academy, Seolekar expects couples with children to drop in for the weekend. Golf, after all, is the centerpiece of Oxford G&CC. "The golf course is our USP, along with the location, as it is within the city limits.
"The area is a combination of hills and low-level areas-much like a horseshoe valley-which has worked in our favor as we have built the golf course in the middle and placed all the golf villas around it at different heights. Hence, 'golf view' is the main focus, with luxury living the by-product."
Tourists-both those flying in with golf bags, and without-will form a sizeable chunk of visitors to the property. "Our plan is to start with local people," explains Seolekar. "Once the hotel and spa develops three years down the line, tourists will play a major part. But we're going to tap golfing tourists from the very beginning."
With golf tourism having lain largely untapped in India, resorts like Oxford G&CC could well get the rupees flowing in.
S.K.
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The 'standalone vs. golf resort' debate got plenty of air. "A standalone golf course, built for members, won't work today," said Nicklaus Design's Executive Vice President, Timothy P. Kenny. To get a return on investment, the view was that a golf course has to be part of a resort or residential community; membership fees alone cannot make up for the cost of land and construction. Even "branding" a standalone golf course is no surefire way to profits (though a "signature," it was thought, certainly adds value, and brings cachet, to a golf course or resort).
"Golf tourism is critical for a country's economic well-being in the 21st century."
Matt McNulty, Tourism Development Services |
Matt McNulty-Managing Director, Tourism Development Services-was illuminating on how golf helped transform tourism in Ireland. Under McNulty's stewardship of the Irish Tourist Board, tourism went from a low-growth sector to becoming a mainstay of the Irish economy, accounting for 12.5 percent of the GDP. Between 1998 and '99, Ireland's tourism economy increased by an incredible 300 percent.
"The value of the golf economy in Ireland grew by 800 percent in a decade, while the tourist inflow doubled in five years and tripled in 10," revealed McNulty. Golf injected a vitality into the Irish tourism industry: 60 new championship layouts were built, and the Emerald Isle began hosting European and international events. The Ryder Cup, held at the K Club in 2006, was the zenith. (That Ireland had a golfing pedigree to boast of certainly worked in its favor).
What really helped in turning the Irish economy around was the public and private sectors joining hands, and the government recognizing golf as a business. So not surprisingly, McNulty is a passionate proponent of golf tourism. "It's critical for a country's economic well-being in the 21st century." Governments, he says, must think like investors-food for thought, hopefully, for Tourism Ministry mandarins here.
In the discussion on 'Taking Golf to Virgin Markets,' it was fascinating to hear about the development in Cape Verde (off the western coast of Africa, in the north Atlantic). "We're developing it as the 'European Caribbean'," said Sandra Ruttle, Director of Golf Development, Cape Verde Development. This is, incidentally, an Irish initiative.
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| There were plenty of topics on the agenda; the discussions were both informative and enlightening. |
The Republic of Cape Verde is an archipelago of 10 islands on the same level of Barbados. It has an ideal climate, allowing for a 365-day golf season, and is almost perfectly located-five hours by air from the U.S., South America, Europe and Africa. The government's refreshingly red-tape-free, and investor-and developer-friendly approach, has helped. "That's a big advantage in developing golf tourism," admitted Ruttle. So there's huge potential in Cape Verde. There's potential in Bulgaria, too (Gary Player is designing a course over there). This is a "cheap and cheerful destination," a golfing outpost if ever there was one, but the government needs to get more involved.
Meanwhile, to a rapt audience, Tenniel Chu-Executive Director, Mission Hills Golf Club-described the vision behind this astonishing, and unique, piece of golfing real estate. Only a nation with the millennial ambition of China's could have built a place like Mission Hills ("We wanted to create Asia's and the world's biggest golf 'club'"-Chu). And it's little coincidence that this $625 million development is in Guangdong province, China's biggest economy and the motor of her growth.
Credit crisis? You wouldn't know it if you visit Shenzhen and Dongguan (the cities across which this 12-course, 216-hole monster facility stretches). "Neither the downturn in the world economy, nor, earlier, the SARS virus, has affected Mission Hills," said Chu. "Our model will complement China's economic growth. It will be viable."
A booming GDP is driving China's golf development, and golf tourism is growing at seven percent per annum. "Golf is used as the driver for our real estate," said Chu. "We have built 1,800 homes to date and we have had immediate success with our residential developments, often selling out on the first day of launch."
It wasn't only Mission Hills that provided the 'wow' factor at the Forum. The Middle East, with its ingenious and often crazily ambitious plans to become a much-desired golfing destination, was as gasp-inducing. But much of the development is centered around Dubai, a city whose growth is too fast to keep pace with. As Nick Smith, CEO of The Wave-an integrated resort and residential project coming up in Muscat-said, "In Oman, we're hanging on to the coat-tails of Dubai."
But David Spencer, Chief Executive of Leisurecorp, developers of Dubai's luxury Jumeirah Golf Estates (which will soon become the European Tour's new HQ), feels, "(Dubai) will be a strong platform for the golf industry in the Middle East to grow."
This high-flying Emirate was described as a "city of superlatives," a place that's taking golf to "a new level". Certainly, the International Cricket Council was tempted enough by this 21st century El Dorado to shift its headquarters away from Lord's. The Ryder Cup in Dubai? "Who knows? With Dubai's ambition, they could host the Winter Olympics!" joked Spencer.
"This deal is not just to look after our players and make them richer; it is to develop the game of Golf, and develop the business."
George O'Grady, Chief Executive, European Tour, on the 'Race to Dubai' |
The 'Race to Dubai', the mega-lucrative long-distance 'pursuit' which will replace the European Tour's Order of Merit in November 2008, was also a talking point at the Forum. George O'Grady, Chief Executive of the European Tour, explained the thinking behind what's widely seen as a response to the PGA Tour's FedEx Cup. "Money wise, we can't take on the PGA Tour, but we do have a heritage that we work to maintain.
"The 'Race to Dubai' unites the European Tour on a global stage," enthused O'Grady. "It will inspire a new generation of golfers around the world.
"This deal is not just to look after our players and make them richer; it's to develop the game of golf, and develop the business-that's the deal's raison d'être." Far from the European Tour looking to take over the other, smaller tours (as was widely seen in India last year with the arrival of the Indian Masters), O'Grady said that his organization was only listening to the "golfing wishes of the rest of the world". "We've responded to the requests from South Africa, China, India and Australia."
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| ON A LIGHTER NOTE: After the business and the networking, it was time for entertainment. (Left) Breaking the ice over a pint of Guinness. (Center) One of the three superb opera singers at the gala dinner. (Right) The world-famous Riverdance troupe. |
O'Grady admitted that his organization cannot "limit itself geographically". "The world's a much smaller place than when we started." Clearly, going global is the way forward for the European Tour.
There was plenty else to chew on, and glean: Eddie Sammut, Regional Manager (Europe and the Middle East) of project managers Confluence, presented a case study on the 'Tiger Woods Dubai', a private residential community and resort which will feature Woods' first design. The Forum delved into many aspects of golf development, asking questions and provoking thought. By all accounts, the golf industry's in good health, and robust enough to meet future challenges. And it's the new markets that are taking the lead.
July 2008
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