Although it is obvious that golf is a large and successful sport, no-one has, up to now, been able to put a figure on its exact worth to the global economy. Now, though, a new study from KPMG's Golf Advisory Practice has revealed the value of golf in the Europe, Middle East and Africa (EMA) region.
And it is a vast figure: more than €50 billion a year.
Nine leading golf bodies joined forces with us to publish the report, which is available to download at www.golfbenchmark.com. Our figures show that golf business across the region generate total revenues of €53 billion, support almost half a million jobs and pay nearly €10 billion in wages.
In GDP terms (the value of the industry once its costs have been subtracted), the game contributes as much to the economy in a single year as the last six Olympic Games combined (prior to Beijing 2008) – €14.5 billion.
And while golf in the Europe, Middle East and Africa (EMA) region is about a third the size of the industry in the US, it is growing fast, especially golf tourism and golf real estate. According to our research, these key sectors now account for almost half of the game's total revenue. Real estate is the number-one money earner, bringing in almost €19 billion, which outstrips the total cash generated on-course (from green fees, memberships and the like).
The report reveals that in Europe alone, the number of both courses and players has doubled since 1985, whereas in the US, the number of courses and players has levelled off since 2000.
Golf courses are increasingly being used to support quality residential developments across EMA, and several countries, especially in the Mediterranean and the Middle East, are capitalising on the benefits that golf tourism can bring to their economies. These figures also reflect the near-global growth of the European Tour.
The study, titled The Value of Golf to Europe, the Middle East and Africa, was produced in association with Oxford Economics. We used the most recent full year statistics, which were from 2006, to calculate the value of the game by combining six industry sectors: golf course operations (such as green fees and memberships); capital investments (for example new course developments); golfer supplies (such as equipment and clothing); golf tournaments; golf tourism; and golf real estate.
The €53 billion total revenue figure represents €21 billion in direct income, plus the knock-on effects on the golf supply chain and golf-industry workers' consumer spending.
Here are some of our other interesting findings:
• Revenue raised directly from golf courses (green fees, memberships etc) totalled €7 billion in Europe, compared with approximately €23 billion in the US
• In 2006, more than 160 new golf courses and almost 100 major course expansion projects were under way in EMA. When also considering investment in renovations and improvements of golf facilities, the revenue generated by these capital projects was €4 billion – almost twothirds of that generated in the (much bigger) US golf economy
• The golf real estate business is now almost five times bigger than the investment in golf courses themselves
More than 150 golf-related real estate projects came to fruition in the region in 2006, providing 17,000 new villas, houses and apartments and generating a total of €18.8 billion. This outstrips the revenue from core activities at golf courses, such as green fees and memberships (€18.5 billion). Buyers are prepared to pay up to a 30 per cent premium on a property located in a golf community or golf resort
• Golf tourism is now worth €6.5 billion in total revenue terms, of which 50 per cent was accrued in Western Europe (France, Italy and especially Spain and Portugal). Holidaying golfers account for more than one in 100 leisure trips across the EMA region, and spend an average €250 per day on week long golf holidays, only 26 per cent of which is spent directly on playing golf
• Golf tournaments and endorsements generated €820 million in 2006, including the €103 million revenue from the endorsement income of the top 150 players on the European Tour
• The retail sales market for golf equipment and apparel in EMA is €1.9 billion.
Andrea Sartori is a partner with KPMG in Budapest and heads the firm's golf advisory practice in Europe, the Middle East and Africa. The study is now available to download, free of charge, on the Golf Benchmark site.
This article first appeared in issue 14 of Golf Course Architecture, published in October 2008.