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GOLF ADVISORY PRACTICE IN EMA

Golf Benchmark – The source of industry knowledge

Golf Travel Insightin EMA 2008

ADVISORY

Sponsors and

supporters of the

Golf Benchmark:

Golf, as a massive driver of high-quality tourism, can add significant value to adestination. It can create successful synergies with other tourism products likeconferences and exhibitions, spa and wellness, as well as culture and heritage.As such, golf tourism is an important revenue generator not only for thegolf courses, but for all the connected service providers of a destination.

Golf tourism, in its own right, has developed into a significant business.There are numerous tour operators tailoring their offers to the specific needsof golfers all over the world. Whether as a primary motivation for a holiday orsimply as a secondary activity, golf attracts millions of holiday makers worldwide,thus contributing to a great extent to the golf economy.

Our recent study, The Value of Golf to Europe, Middle East and Africa– A study on the Golf Economy1, shows that golf tourism is a EUR 6.5 billionindustry, employing approximately 60,000 people across the EMA region.Considering that golf tourism contributes – both in terms of GDP and employment– more than 13% of the EMA golf economy, we have prepared the Golf TravelInsight study, which aims to highlight some of the key characteristics of thisniche tourism product, its expected future trends, as well as to provide a betterunderstanding of the needs of golf tourists. Please note that this research wasconducted during spring 2008 and prior to the full scale unfolding of the financialand economic downturn. Difference in timing of the survey may have led todifferent research outcome.

We hope that this study, together with other research regularly published atgolfbenchmark.com – the source of industry knowledge – will support investorsin the private sector, as well as public institutions and tourism bodies,in their decision making process, especially when thinking strategically aboutgolf tourism development.

As initiator and coordinator of this study I would like to take this opportunityto thank the over 80 golf tour operators who have participated in this

research. Furthermore I would like to express my sincere gratitude tothe sponsors and supporters of the Golf Benchmark initiatives for theircontinuous support.

If you would like to receive any clarification or to discuss the researchresults, please feel free to contact the KPMG Golf Benchmark Team or myself.

Yours sincerely,

Dear Reader,

Andrea Sartori

Partner, KPMG Advisory Ltd.Head of Golf Advisory Practice inEurope, Middle East and Africa

[email protected]

Golf Trave l Ins ight in EMA 2008 3

1 The entire study can be downloaded from our web page golfbenchmark.com

© 2008 KPMG Tanácsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network ofindependent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

Golf tourism: a EUR 6.5 billion industry

In 2006, golf tourism in the EMA region earned a total of EUR 2.7 billion in directrevenue. Of this we estimate 82% was spent in Europe, 17% on the Africancontinent and the remaining 1% in the Middle East. Half of all tourism-relatedrevenue (51%) generated within the EMA region accrued in Western Europe(especially in Spain and Portugal), despite this sub-region hosting only 16% ofthe total number of golf courses in EMA. In stark contrast, the Great Britain andIreland sub-region generated only 12% of the golf tourism related revenuedespite hosting just over 40% of all the golf courses in our survey.

Once we include the knock-on effects on the golf tourism supply chain and theeffects of golf-tourism industry workers’ consumer spending, the total economicvalue of golf tourism is more than EUR 6.5 billion in revenue terms.

This equates to almost EUR 2 billion in GDP – the value of the golf tourismeconomy once its costs (for goods and services) have been subtracted – whichaccounts for over 13% of the entire EMA golf economy.

Overall, golf tourism supports the employment of approximately 60,000 people

throughout EMA. Golf also accounts for 1–1.5% of all leisure trips in the EMAregion, and our research suggests golf tourists spend an average of EUR 250per day on a week-long golf holiday, only 26% of which is spent directly on golf.

Compared to other leisure tourists, golf tourists spend significantly more,purchasing numerous and varied goods and services while on their trip,supporting a wide range of businesses such as hotels, restaurants, retailers,and of course, golf facilities themselves through the purchase of green fees,cart rental and expenditure in the pro-shop.

The following table summarizes the key indicators of the golf tourism economyin the EMA region in 2006.

1 For the purpose of The Value of Golf to Europe, Middle East and Africa study Western Europe includes:France, Italy, Spain and Portugal; Central Europe includes: Austria, Germany and Switzerland; NorthernEurope includes: Denmark, Finland, Iceland, Norway and Sweden; South-East Mediterranean includes:Cyprus, Greece and Turkey.

4 Golf Benchmark – The source of industr y knowledge

2006 Direct Indirect Induced Total

Total Revenues (million) € 2,737 € 1,801 € 1,995 € 6,533

Contribution to GDP(million)

€ 806 € 538 € 592 € 1,935

Employment 25,500 16,200 18,100 59,800

Total wage income(million)

€ 604 € 387 € 443 € 1,433

Source: KPMG and Oxford Economics,“The Value of Golf to Europe, Middle East and Africa – A study on the Golf Economy”, 2008

Source: KPMG and Oxford Economics,“The Value of Golf to Europe, Middle East and Africa – A study on the Golf Economy”, 2008

WesternEurope51.3%

South-EastMediterranean

2.8%SouthAfrica 3.0%

MiddleEast 1.3%

NorthernEurope 6.9%

CentralEurope7.2%

GB &Ireland12.1%

Other Africa14.4%

Benelux0.9%

EasternEurope

0.1%

Contribution to golf tourism

revenues in the EMA region in 20061


Recent trends in golf tourism

To help us outline the industry trends in recent years, we requestedgolf tour operators to disclose their experiences with golf tourism.

Considering the growing number of golfers in the EMA region in the past decade,it is not surprising that 73% of respondents reported an increase in the numberof golf tourists. At the same time, around 10% noted a decrease in golftourism demand. The average length of stay remained unchanged accordingto most respondents.

Almost half of the surveyed tour operators indicated that high-end golfholidays are becoming more and more popular and that allocated budgetsfor golf packages are also increasing.

Info box

According to our research,golf tourists spend on averageEUR 150–180 per day on a short trip,and approximately EUR 250 per daywhile on a long haul golf trip.The following chart presentsthe estimated breakdown ofgolf tourist spending duringa long haul trip of 7–9 days.

Source: KPMG research

Travel21%Accommodation

20%

Golf26%

Other15%

F&B18%

Source: Golf Travel Insight 2008

Trends in golf tourism according to survey participants

0% 20% 40% 60% 80% 100%

� Increased � Remained the same � Decreased

73% 18% 10%

14% 74% 13%

46% 47% 6%

Number ofgolf tourists

Averagelength of stay

Averagebudget spent




Who is the ‘typical golf tourist’?

Based on our survey findings, the typical golf tourist spends 4–7 dayson a short-haul golf holiday, and 7–14 days on a long-haul one.

With regards to playing activities, a golf tourist generally plays 4–6 roundsof golf on 3–5 different courses during a one-week golf holiday.

Tour operators were requested to rank on a 5-point scale the importance ofvarious factors to a golf tourist when choosing a golf destination. Based onour findings, golf tourists care most about the climate of a location andthe quality of the golf courses. Although preferring quality facilities, golfersare still quite price-sensitive. It may be somewhat surprising that golfers havea limited appetite for visiting local attractions and little interest in sightseeingopportunities.


How golf tourists choose their golf destination

Not important (1) Very important (5)

Climate

Quality ofgolf courses

Price of package

Accessibility

Quality ofaccomodation

Nr. of golf courses

Gastronomy

Relaxing surroundingsEntertainment

& nightlife

Golf tradition

Sightseeingopportunities

Monte Rei Golf & Country Club, Portugal © 2008 KPMG Tanácsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network ofindependent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

Golf Trave l Ins ight in EMA 2008 9

What future trends can be expected for golf travel?

We have asked our survey participants about their expectations for golf tourismgrowth in the forthcoming years.

The vast majority (82%) of respondents expect steady growth in the number ofgolf trips. A similar number of tour operators foresee stagnation or spectaculargrowth, 9% and 8% respectively.

Considering the importance of climate for golf tourists, it is not surprising that oursurvey participants have ranked Portugal, Spain, Turkey and Dubai among the topgolf tourism destinations of the upcoming years. These hot spots are consideredto have further growth potential for inbound golf tourism by most of therespondents. It is interesting to note that Portugal is more popular than Spain– a higher number of survey participants anticipated an increase in golf tourismin the previous than in the latter. Thailand, Malaysia and Indonesia were alsomentioned by several respondents as being emerging golf destinations withpotential for future growth.

In traditional destinations like Scotland and Ireland, tour operators mainlyexpect stagnation in inbound golf tourism. From our research it appearsthat well established destinations do not seem to be losing market thanks totheir deep golfing traditions and the quality of their supply, however, theincreasing competition does not leave much room for their further growth.On the other hand, the experience and quality of service of golf in the US,combined with the weakening of the US dollar, is making America very attractiveto European golfers.

Green fees in golf tourism destinations are usually not cheap. In fact, four of themost expensive countries in terms of green fees are strongly tourism based.An exception is South Africa, which, also due to the weakness of its nationalcurrency, is one of the most affordable countries for playing golf in EMA.

Source: Golf Travel Insight 2008Note: This research was conducted during spring 2008 and prior to the full scale unfolding of the financial and economic downturn. Difference in timing of the survey may have led to different research outcome.

Spectaculargrowth 8%

Steady growth82%

Stagnation9%

Gradualdecrease 1%

Future expectations of tour

operators regarding golf

tourism growth


Hot spots for golf tourism in the upcoming years

Modest demand (1) Strong demand (5)

PortugalSpain

Turkey

Dubai

USASouth Africa

Scotland

IrelandNorthern Africa

Thailand, Malaysia& Indonesia

FranceMexico & Caribbean

England

Eastern Europe

India

*For non-affiliated playersSource: Golf Benchmark Survey 2007

UAE 121

Portugal 78

Cyprus 76

Turkey 76

Luxembourg 75

Denmark 40

Iceland 40

Poland 39

Czech Republic 33

South Africa* 30

0 50 100 150

Most and least expensive countries

in EMA according to average

weekend green fees (EUR)




Germany20%

UK16%

Sweden11%

The Netherlands6%

Spain6%

Austria5%

Switzerland5%

Other 31%

Participating tour operators

by country

Methodology noteFor the purpose of this study a golf trip is defined as a leisure trip taken withina country or cross-border, which includes at least one overnight stay and whenthe traveler’s main motivation is to play golf.

The study was a questionnaire-based survey, complemented with in-depthtelephone interviews performed during spring 2008 among membersof the International Association of Golf Tour Operators (IAGTO).

Over 80 golf tour operators from 21 countries have participated in our survey.The majority of the responses were received from European golf touroperators, supplemented with responses from South Africa and theUnited Arab Emirates.


For further informationplease contact theGolf Benchmark Team:

KPMG Golf Advisory Practice in EMA

H-1139 Budapest,Váci út 99Hungary

Tel: +36 1 887 7100E-mail: [email protected]

golfbenchmark.com

The information contained herein is of a general nature and is not intended to address the circumstances ofany particular individual or entity. Although we endeavor to provide accurate and timely information, there canbe no guarantee that such information is accurate as of the date it is received or that it will continue to beaccurate in the future. No one should act on such information without appropriate professional advice after athorough examination of the particular situation. KPMG does not accept any responsibility for errors, omissionsor any consequence arising from the use of this report. KPMG reserves the right to alter at any time anyelement of this report. KPMG and the KPMG logo are registered trademarks of KPMG International,a Swiss cooperative.

© 2008 KPMG Advisory Ltd., a Hungarian limitedliability company and a member firm of the KPMGnetwork of independent member firms affiliatedwith KPMG International, a Swiss cooperative. All rights reserved.

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