Golf Travel Insights Future Trends in Golf Demand

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1 Golf Travel Insights Future Trends in Golf Demand Alastair Graham Director, Golf Advisory Practice in EMA 18 June 2015, Portugal

2 Introduction to KPMG Golf Advisory Practice KPMG Golf Advisory Practice possesses in-depth knowledge and experience of the business side of the golf, lifestyle real estate, hotel and tourism industries. Our team has worked on over 150 golf related assignments in 30 different countries in the EMA region and beyond. Together with the assistance of local KPMG member firms, we are able to provide global experience combined with local knowledge and expertise. Work we do Market and financial feasibility study Project conceptualization and investment planning Business plan Project management Valuation service Transaction service Operational review Supplier selection 1

3 Thought Leadership KPMG Golf Advisory Practice prepares regular reports and thought leaderships for the golf industry 2

4 Registered golfers, 000 Milhares Golf in Europe Approximately 4.2 million registered golfers in Europe in 2014 Additional 3.5 million non-registered or casual golfers Estimated 82% of non-registered golfers in GB&I Top 10 European golf markets by number of golfers Development of golf in Europe Registered golfers Courses Courses Between 1985 and 2010, Europe s golf demand and supply grew steadily Since 2010, the number of registered golfers has fallen each year In 2014 the number of golfers in Europe fell by 1.8% in 2014 The size of the decrease in the number of golfers across Europe has reduced. -4.4% GB&I, -1.2% Denmark, +0.2% Sweden, -1.5% Norway, +0.2% Germany, - 0.7% Austria, +1.4% Switzerland 3

5 Golfers, 000 Participation rate (%) Golf in Europe Main feeder markets to Portugal (the UK, Scandinavia and Germanspeaking countries) showed some signs of recovery: the number of golfers is expected to stabilize in the short-term and slowly grow in the midterm period. Countries with highest participation rates, Europe 6% 4% 2% 0% 5,09% 4,97% 4,2% 3,8% 2,69% 2,63% 2,31% 2,02% 1,6% 1,3% Trends of golfers in main feeder markets, Golfers per golf course - Top 10 European Markets Austria Denmark France Germany Iceland Norway Sweden Switzerland UK&I 4

6 Golf Resorts in the European Mediterranean Region European market is clearly dominated by Spain, followed by Portugal, Italy and France Portugal is the second biggest coastal golf integrated resort market 90% Hotels in golf resorts Main feeder markets are the UK, Scandinavia and German-speaking countries Main selling points are climate and availability of direct flights 60% 30% 0% Spain Portugal Italy France 5

7 Coastal integrated golf resorts Golf Resorts in the European Mediterranean Region Development activities fell drastically during the global crisis. Openings of coastal integrated golf resorts by decade per year 5.8 per year Spain Portugal per year 0.8 per year 1 per year 1.7 per year 3 per year France Italy Turkey Cyprus 0 Croatia ~70% Established golf markets - luxury developments rather than mid-market New destinations emerging competition 6

8 Golf Travel Insights KPMG s Golf travel Insight is a snapshot of the golf tourism market, which provides golf tour operators, suppliers and other industry stakeholders with a better understanding of the key factors influencing the development of the game around the world. Golf Travel Insight 2015 survey (preliminary results for Europe): The volume of trips has slightly increased in 2014 compared to 2013 Package prices (including accommodation and golf, excluding flight) 100% 80% 60% 40% 20% 0% Below EUR 300 EUR EUR More than EUR 900 Majority of the trips are 4-7 nights long followed by longer than 8-nights trips and 1-3-nights weekend breaks Prices of golf travel packages slightly increased in 2014 but generally remained on a similar level as in 2013 Some indicated that Algarve had an upward change in price in 2014, while prices for golf destinations in Spain went down 1-3 nights 4-7 nights 8 nights or longer 7

9 Golf Travel Insights Price, quality and number of courses, accessibility and weather were among most important factors when choosing a holiday destination last year (Scandinavians value weather more than other feeder markets) Product mix is important - combination of golf and wine was most appealing to European golfers last year Portugal and Spain were among three most popular destinations for the key-feeder markets Booking is shifting more from in person type towards phone and online booking, as gadgets (phones and tablets) are becoming more in use 39% of all booking were made well in advance (more than 6 month before) and 46% in advance (1 to 6 month before) IAGTO: forward bookings for European based golf tour operators are up 7.3% in 2015 compared to the same time last year. European golf holiday sales grew in three consecutive years: 9.4% in 2012, 10.1% in 2013 and 9% in Outlook for the rest of 2015 is positive, as the whole tourism in Europe is growing 8

10 Conclusions? Perhaps a corner has been turned in terms of the drop in the number of registered golfers Changes in demand single golfers? Lady golfers? There are signs of new resort developments and changes in supply Portugal maintains a sound positioning in the golf tourism market, which itself continues to grow. Is this a sustainable position? Do current concerns about golf as a pastime paint a different picture? 9

11 Golf does face challenges Demand Time Cost Low participation The image of golf Technology No activity diversification: the issue of family Membership retention Supply Oversupply Closures Alternate Use Financial sustainability Funding Maintenance issues The environment and climate change 10

12 Does golf need a snowboard? 11

13 Some current thinking Shorter formats of the game Large holes Easier courses Relaxed dress code Less formality Is the change required really about the game? 12

14 An Example - Is Cycling a Threat? Cycling is rivalling golf for the leisure time of middle-aged men As golf participation has fallen dramatically in recent years, cycling has boomed in Europe and the US Cycling has become a competitive sport for affluent middle-aged men, who are traditionally the core market for golf Why? Quantifiable sport Pace of business life - impact on the sport of choice Travelers crave authentic experiences filled with activities not possible at home. Cycling tourism allows travelers to get a unique sense of the destination. Mark Thomsen, Marketing Manager of Trek Travel We foresee more demand for high performance trips where training and nutrition tips are integral to the experience. Also, combining bike travel with other active pursuits, like kayaking and hiking, will be essential to keep the experience fresh and to attract new active travelers. Michelle Duffy, DuVine Cycling + Adventure Co 13

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