Eddy Leong of Malaysian developer Destination Resorts and Hotels talks to GCA about the group's huge investment in two new golf resorts
Malaysian developer Destination Resorts and Hotels is making a big play to increase the country's share of the Asian golf tourism market. Backed by the country's sovereign wealth fund, DRH is currently constructing two huge resort projects, one at Desaru Coast, just across the border from Singapore, and the other on the coast of the popular tourist island of Langkawi.
Both projects include signature golf courses. Current Open Champion Ernie Els's design firm is building eighteen holes in Langkawi, and 27 holes at Desaru, and the latter project will also have another course, created by Els Design in association with Vijay Singh.
Golf Course Architecture: Could you explain a little about DRH's business strategy, and what part golf development plays in it?
Eddy Leong: Destination Resorts and Hotels (DRH) is the strategic owner and developer of world class destinations, established by the Malaysian Government's investment arm, Khazanah Nasional Berhad. We have a clear vision, and that is to transform Malaysia’s tourism landscape, by delivering commercially sustainable resort destinations which can compete on a global stage. Golf will be a significant driver for our business strategy and we currently have three developments in our portfolio that are using golf as a key business tool.
As part of our golf strategy, we wanted to create a unique platform for our golf clubs to further enhance our destinations. Els Club Malaysia is being developed which encompasses the various golf clubs in our portfolio and provides a unique membership model across all three golf clubs totalling more than 63 holes of golf. Els Club Teluk Datai is an 18-hole championship golf course at Teluk Datai, located on the island of Langkawi in the Andaman Sea. Els Club Desaru Coast is a 27-hole championship golf course at the much-anticipated integrated luxury destination Desaru Coast, located on the South China Sea in South Eastern Johor. Both have been designed by four time Major winner Ernie Els' firm. Els Club Desaru Valley is the third championship golf course, which is an 18-hole championship golf course designed by Vijay Singh together with Ernie Els Design. All three golf clubs will be under the watchful eye of Troon Golf, the leader in upscale golf course management, development and marketing.
GCA: Golf tourism in Asia is growing rapidly and a recent piece of research said that Thailand could well be the most popular golf destination in the world within three years - but that also means that competition is getting fiercer. What do you think are Malaysia's – and your projects' specifically – key sources of competitive advantage?
EL: Malaysia has a rich cultural history and offer visitors a truly Asian experience. Malaysia's tourism sector has doubled in arrivals since 2000 and continues to focus on furthering its growth. The country as a whole has much to offer, from stunning beach resorts offering a haven in which to unwind and relax, city shopping experiences, and of course our diverse selection of world-class championship golf courses. The news on Thailand’s success demonstrates the consumer appetite to experience South East Asia and establish the region as a central hub for golf tourism. This is encouraging for us and as a destination, we are on the right track.
There is certainly the opportunity for Malaysia to become an even bigger player on the global golf tourism stage with improving access, increasing awareness amongst target markets and exciting future developments that will build on the 200-plus golf courses already in existence around the country.
In line with increasing golf tourism in Malaysia, DRH will assist in further developing premium golf resorts, engaging the desired demographic, enhancing golf tourism and the international inbound dollars.
All of our current golf development sites have considerable USPs about them. Firstly, the championship golf courses have been created by one of the greatest design minds in the business. Secondly, we will be introducing Asia’s first ever Els Club, also the third in the world. Troon Golf, the world leader in club management has been selected to operate our clubs to ensure consumer confidence is instilled with first class service and superb playing conditions. The developments are located on two of the world’s most stunning coastlines, amongst tranquil surroundings and have been carefully chosen to create an exclusive guest experience.
GCA: Where do you believe the key markets for your destinations will be? Why?
EL: We will have a strong domestic as well as regional market attraction, with golf being very popular not only in Malaysia but the South East Asia region as a whole. Singapore will also be a major market for us, as the development in Desaru Coast is just an hour ferry ride away, so naturally we are expecting to see a considerable uptake in our early membership offering from both Malaysia and Singapore market. Wider Asian markets such as China, Japan, Korea also present an opportunity with their volume of golf consumer and growing disposable income. We will be making efforts to ensure our golf developments strike the desired chord in these culturally diverse markets. We will of course be targeting the Middle Eastern and European market as well. If you look at examples of where our tourism guests currently visit from, Middle Eastern and European tourists showed a steady increase of arrivals as they are becoming the most important market for us.
When you factor in golfer numbers in the likes of the UK, Germany and Sweden and their propensity to travel, we will be focussing much effort there, not to mention some of the other markets such as Benelux, Italy and France.
GCA: Thinking specifically about golf, rather than resort services in general, what do you think potential visitors to your resorts are looking for that will make them successful?
EL: The research we have conducted and crucial insights from our industry partners have given us the confidence in creating a premium golf experience. From the quality of the design, to pristine course conditioning and first-class service, our mission is to deliver an unrivalled and unforgettable golf experience. As a standalone asset, the championship golf courses will be able to compete against the very best in world golf, having benefitted from Ernie’s vast international experience as well as the expertise and hospitality Troon brings to manage our portfolio of golf courses.
However, as a business we do believe the peripheral elements to the golf course play an equally important role in creating the brand experience. The property, hotels and activities are all combine to give our developments the international appeal that will assist in delivering success. When you add the charm and mystique of a truly Malaysian experience, we feel this will give us the edge and see guests returning year after year.
GCA: Why did you choose to partner with Ernie's firm?
EL: In Ernie, we have one of the finest players and designers of his generation. As a brand he is hugely popular with consumers and the industry on global level.
From the very start, Ernie and his design team shared our vision in creating one of the world’s most distinct golf experiences. When you have someone of Ernie’s calibre as enthused about the potential of the developments and the professionalism in which he and his team approached the first stages of discussions, for us it became a very easy decision. Ernie is also a great role model. Committed to his wonderful family at home and striving for perfection – both on and off the course. His brand values match ours at DRH and we look forward to a strong future. In addition, Ernie’s stock will continue to rise in the design sector creating Asia’s first ever Els Club.
GCA: Once these developments are complete, do you anticipate more golf developments in DRH's future?
EL: In short, our focus is on launching the eighteen hole Teluk Datai and 27-hole Desaru Coast championship golf courses in the fourth quarter of 2013 and the third quarter of 2014 respectively. We are soon to break ground on the Desaru Valley championship golf course with Ernie's firm as well as Vijay Singh and anticipate this course opening in 2015. These are extensive developments that require the utmost attention to detail and we want to ensure that we are 110 per cent ready when we open our doors. With this being said, we do have an appetite for golf development and feel that it plays a major USP in our overall destination developments. Other courses are certainly a possibility in the future provided we find the right site for golf developments.