Golf participation in Europe 2011 golfbusinesscommunity.com

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1 GOLF ADVISORY PRACTICE IN EMA Golf participation in Europe 20 golfbusinesscommunity.com

2 While golf is not considered a bellwether for economic conditions in Europe, there is little doubt of the cause-and-effect link between the economy and the success of golf as a participation sport. The number of golfers in Europe has more than doubled in the past 25 years, buoyed by economic growth and the spread of the game to both developed and emerging economies. However, in 20, European golf experienced its first fall in participation in more than two decades. Which countries lost golfers in 20, and why? Which countries enjoyed golfing growth? This snapshot report of golf participation in Europe will provide an insight into recent trends across the region, based on available statistics. Headline facts After more than 20 years of growth, Europe s golf market experienced the first decline in golf participation, with a net loss of 46,000 registered players in 20. Nine countries experienced a decline in the number of registered golfers, but the most significant falls were in three large golf markets: UK & Ireland -42,700 (-3.1%), where the number of golfers has been falling since 2007, Sweden -21,000 (-4.1%) and Spain -,700 (-2.%). Some countries have counterbalanced Europe s overall decline in golf participation: Germany +10,800 (1.8%), the Netherlands +7,600 (2.2%), Finland +4,600 (3.6%) and Eastern Europe s most established golf market, the Czech Republic +3,500 (7.6%). Despite their potential, the growth in demand for golf in Eastern European countries was insignificant, in absolute terms, in 20. German-speaking countries 1 and the Netherlands, remain flagship markets for female participation, with more than 30% of players being women. Female participation is also high in these countries in absolute terms, providing a total of 430,000 women golfers (40% of the total in Europe). Some emerging markets encourage golf participation through junior programmes, which is reflected in the notably high share of junior golfers in some countries (e.g. Turkey, Serbia, Greece). While in absolute terms this represents only a few thousand young players, this is a potentially important factor in the future development of the game in these countries. No countries experienced a significant growth in golf supply, but some new courses opened in Germany, the Netherlands, the Czech Republic and Poland, for example. Development of golf participation in Europe At the end of 20, there were a total of 6,740 golf courses and nearly 4.4 million registered players in Europe, resulting in an average participation rate of 0.7 (based on a total population of 600 million) 2. Following dynamic growth (6% per year) since the 180 s, and a modest increase (1-2%) in the last five years, Europe s golf market entered a downturn in 20. While the number of golf courses has remained stagnant, participation in the game started to decrease, resulting in a net loss of 46,000 registered golfers last year. It is generally believed that the stagnation of Europe s golf market can be attributed to two principal factors: Significant decrease in registered golfers in some of Europe s largest golf markets, notably the UK & Ireland; Lack of dynamic growth in Europe s emerging markets (e.g. Eastern Europe and the South-East Mediterranean). It should be highlighted however that in the UK & Ireland golfers do not need to be registered to play, and, as such, the reduction of registered players could be attributed to cancellations of club memberships. Many of these so-called casual golfers continue to play the game on a green-fee (daily pay-and-play fee) basis, on which there aren t any accurate statistics available. As such, although the significant drop in registered golfers is a clear indication of decreasing demand, it is harder to measure the impact on the number of rounds. Development of golf in Europe Players 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Thousands ,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Courses Players Courses Source: EGA and local golf federations with KPMG elaboration Golf participation in Europe 20 / Golf Advisory Practice in EMA 1 Germany, Austria and Switzerland 2 We have only considered the population of countries with at least one golf course.

3 Supply and demand characteristics in 20 The golf market in Europe remains concentrated, with 2% of all golfers and 0% of courses focused in only 10 countries. The UK & Ireland alone have the highest share of demand in Europe with 30% of players and the highest share of supply with 44% of courses. In recent years golf supply and demand has been relatively stable in most European countries, resulting in little change in market maturity. The UK and Ireland remain Europe s most mature markets, along with the Nordic countries. In fact, Sweden, Iceland, Denmark, Finland and Norway have the highest participation rates in Europe, paralleled with a strong supply relative to the population size. Distribution of demand in Europe Composition of golfers in countries across Europe UK & Ireland Germany Sweden France Netherlands Spain Denmark Finland Norway Austria Other 30% % % % 8% 8% 4% 2% 8% Distribution of supply in Europe UK & Ireland Germany France Sweden Spain Italy Netherlands Denmark Norway Austria Other 44% 10% % 7% 5% 4% 5% 10% The following maps indicate the maturity of Europe s golf markets, according to the size of population per golf course, and the proportion of the population playing golf. Market supply: Population per golf course mature 25,000 people developed 25, ,000 growing 100, ,000 infant 300,000 Market demand: Participation rate (affiliated golfers only) mature 5% developed 1%-5% growing 0.2%-1% infant 0.2% Croatia* Poland UK & Ireland Portugal Hungary Cyprus Bulgaria Lithuania Spain Estonia Latvia Norway Italy Netherlands Denmark France Sweden Greece Iceland Romania* Slovakia Finland Belgium Czech Rep. Slovenia Switzerland Luxembourg Germany Austria Serbia Turkey 34 0% 20% Male % % Female 80% 100% Juniors *2010 data, no data available on 20 Although the composition of golfers changed in some countries in 20, male golfers continue to dominate Europe s golf market, representing approximately 65% of all players. Women and junior golfers make up 25% and 10% of the total, respectively. Source: EGA, local golf federations and Eurostat, with KPMG elaboration While total female registrations have been decreasing across Europe in 20 by about 2%, Germany, Switzerland, Finland and the Czech Republic managed to notably increase the number of their female golfers Germany by more than 5,700, and the latter three by 1,000-1,400 each KPMG Tanácsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved.

4 German-speaking countries and the Netherlands remain the flagship markets for female participation, with more than 30% of their players being women. Germany and the Netherlands are not only among the top -five countries in terms of proportion of women golfers, but also in absolute terms: both countries boast significant numbers of female players. Top five countries in terms of share of female golfers (compared to all golfers in the country) Germany 35% Austria 35% Switzerland 3 Netherlands 31% Denmark % 25% 27% % 31% 3 35% 37% Top five countries in terms of absolute female golfers Germany 2,663 UK & Ireland,564 Sweden 1,836 Netherlands 0,345 France 104,3 0 50, ,000 0, , ,000 The junior game also dropped last year, with the three largest markets, the UK & Ireland, Sweden and Germany recording a total decrease of 25,000 in the number of junior golfers in 20. Although starting from a low base, Bulgaria, Serbia, Slovakia and Greece have seen a positive shift towards a higher composition of junior golfers. Turkey is still experiencing junior growth from the Golf Junior League initiative, having added more than 00 golfers since the programme was introduced in 200. Top five countries in terms of share of junior golfers (compared to all golfers in the country) Turkey 52% Serbia 34% Greece 25% Romania* % Latvia 2 0% 10% 20% 30% 40% 50% 60% Top five countries in terms of absolute junior golfers UK & Ireland 2,855 Sweden 53,01 Germany 52,881 France 46,107 Netherlands 17, , ,000 0,000 Key initiatives across Europe Grow the Game of Golf is an initiative set up in conjunction with a number of organisations including the EGCOA, The European Tour, and the EGIA with the common goal of inspiring and encouraging golf clubs and associations to help grow the game from a grass roots level. They advertise many initiatives from national and local bodies which have proved successful, indicating the need for structure and support to develop the sport from a participation perspective. Clubgolf is a government-backed initiative to give every child in Scotland the chance to play golf following the country s successful 20 Ryder Cup bid. One hundred forty thousand juniors have already been introduced to the concept. Germany is a leading example in encouraging women to play, allowing higher handicaps (a maximum of 54). In the Netherlands, Kids4Golf is a non-profit organisation aimed at 8-12 year-olds, providing fun golf events in public recreation areas, with special balls and child friendly hole-lengths. Again in the Netherlands, Fun Factories is for children aged 5-12 years, with 10- events held annually. Established in 2002, there are now 50 participants at each event, on average. Slovenia Plays Golf is a package deal the Slovenian Golf Association is running, where EUR enables a player to acquire a licence and a 54-handicap. The scheme started in April 20 and there are currently 1,800 players enrolled, from which 1,000 are projected to become full club members KPMG Tanácsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved.

5 2012 KPMG Tanácsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. What s next for golf in Europe? While we expect 2012 to remain a tough year for Europe s golf market, a recovery in the Eurozone and an overall upswing in the world economy would play an important part in the uptake of golf by new and returning players. However, the timing and nature of such a recovery is obviously difficult to forecast. Some of the countries where golf continued to grow in 20 notably, Germany and Finland have benefited from relatively resilient economies, given the scale of the economic downturn across Europe, and enduring uncertainties. These countries remain well positioned to see a growth in both numbers of players and, to a lesser extent, courses. Where golf had previously been tipped to grow significantly was the emerging markets of Central and Eastern Europe (CEE). Despite the Czech Republic s impressive growth figures (7.6% increase in the number of players to nearly 50,000, and seven new courses), demand and course development has slowed down across the region. However, based on our survey of industry experts, expectations for the CEE as well as the Mediterranean region remain high, following a recovery from the economic downturn. Once again, the timing is hard to predict. There is no doubt the apparent drop-off in the number of registered golfers in Europe s largest golf market, the UK and Ireland, was significant in 20, and follows an ongoing trend. However, it is difficult to determine how much of this is as a result of golfers giving up club memberships in favour of playing golf on a casual or daily fee basis, or giving up the sport altogether. (Unlike other European countries, golfers in the UK and Ireland don t have to be registered.) There are several initiatives aiming to offset this negative trend. For example, the Over 45 s Project is a local scheme that has been running in conjunction with England Golf to involve people aged over 45 as part of a fitness and social concept. Significant funds have been allocated for this initiative between 200 and 20. A future project set to be rolled out in 2012 is a new concept with the English Golf Partnership encouraging adults to start playing quick, social golf with rounds lasting no longer than 60 minutes. While these are all positive examples, the lack of proper promotion often hinders the success of such initiatives. In Wales, the Ryder Cup Legacy has put significant effort into growing the youth game, which saw peaks in But, just two years after the Ryder Cup, there is a call for continued support and investment in fresh and new initiatives to turn around the recent reduction of junior players. While much of the golf market stagnation in Europe may be attributed to the overall economic climate, continued support and investment in new programmes will be needed to sustain demand and generate further growth in the game, especially in mature and developed golf markets. Golf clubs need to proactively and effectively face up to the challenging economic climate to retain members or attract new golfers. Based on our survey, rather than introducing youth and family promotional programmes, 30-40% of Europe s operators and club managers actually increased prices in 20. On the other hand, more than half of clubs have not enhanced marketing efforts and (somewhat surprisingly) many have not yet capitalised on the opportunities provided by online marketing and social media. Today, there is a need for joint efforts by industry stakeholders arguably more so now than at any time in the past two decades. Therefore, whatever aspect of the industry you represent, we invite you to share your thoughts, best practices and creative ideas on For clarification regarding the results of this report, please contact us at gbc@kpmg.hu.

6 Appendix Country statistics: Affiliated players and regular golf courses in Europe, 20 Country Players % Change from 2010 Courses % Change from 2010 Participation Population per rate golf course UK & Ireland* 1,326, % 2,8-0.1% 1.8% 22,388 Germany 610, % % 0.75% 5,468 Sweden 41, % % 5.22% 20,73 France 407, % % 0.65% 10,232 Netherlands 351, % % 2.% 82,865 Spain 328,45-2.% % 0.71% 2,3 Denmark 1,185-0.% % 2.72% 30,722 Finland 2, % % 2.65% 42,661 Norway 121, % % 2.47% 28,441 Austria 104,40 0.0% % 56,404 Italy 100, % % 0.17% 222,075 Switzerland 7, % 4 0.0% 1.01% 83,686 Belgium 55, % 7 0.0% 0.50% 8,6 Czech Rep. 4,84 7.6% 8 8.5% 0.47% 8,346 Iceland 16, % % 5.04% 4,825 Portugal, % % 0.% 120,875 Slovenia 8,45 7.5% % 7,707 Slovakia 6, % % 418,08 Turkey 5,64 2.0% 1 5.6% 0.01% 3,880,7 Luxembourg 4, % 6 0.0% 0.7% 85,307 Poland 2, % 20.8% 0.01% 1,317,3 Estonia 2, % % 167,5 Hungary 2, % 0.0% 0.02% 768,2 Greece 1, % 1,4,736 Cyprus 1, % 10.1% 0.% 80,444 Latvia % 3 0.0% 0.04% 743,2 Romania** % 4 0.0% 0.00% 5,353,454 Croatia** % 3 0.0% 0.01% 1,470,712 Bulgaria % 0.01% 1,250,8 Serbia % % 0.01% 3,638,08 Lithuania % % 0.01% 540,767 Europe total 4,38, % 6, % ,823 * Please note that, as opposed to most European countries, in the UK & Ireland golfers do not have to register to play. As such, there are a good number of additional players who are not members of a golf club but regularly play golf. We have not considered these unregistered golfers in our statistics. ** 2010 data, no data available on 20 Sources: European Golf Association, local golf federations and Eurostat, with KPMG elaboration KPMG s Golf Advisory Practice in Europe, Middle East and Africa H-3 Budapest, Váci út Hungary T: E: info@gbc.hu The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. The KPMG name, logo and cutting through complexity are registered trademarks or trademarks of KPMG International Cooperative ( KPMG International ) KPMG Tanácsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved.