Golf Business Monitor

Golf participation in Europe 2010

Those who are familiar with the golf industry they know that KPMG prepares from year to year a survey about golf course development and golf participation trends. 2010 is not an exception. ;) Since the last decade of the 20th century the pace of golf course building and participation is much slower that worsen in the past five years. Last year there was in fact a 4% decrease in the number of golfers in Europe's largest golf market: UK&Ireland.

 
KPMG tries to keep up the illusion that it is still lucrative to invest in golf industry. He does not mention the current economic climate that recently hit Ireland. Ireland is now asking for EU financial help, just like Greece, Spain and Portugal. You can imagine what will be next year when you try to play in Spain and Portugal...prices will reach the sky and people will abandon this lovely sport.

KPMG also forget to mention other curcial factors that I mention in my previous post, namely golf course owners' lack of relevant management knowledge and education.

Two other interesting facts from this survey: in Germany is the highest ratio of female golf players. In Turkey is the highest ratio of junior golfers.

Golf Salary & Benefits Study 2010

After a big break I am back. I hope you forgive me for such delay. Recently I came across with Club Managers Association of Europe (CMAE)and and executive recruitment specialist, Colt Mackenzie McNair's new findings about golf salaries and benefits study (2010). The survey focused on Golf Clubs and Resorts.

Here are the main findings of the study:

• A degree-level education or professional qualification was not a prerequisite of a senior role and only 50% had either of these. It seems to me that time stopped in the golf industry in the last 60-70 years or we are not in such a bad condition if we can afford such luxury. By reading Colt Mackenzie McNair's job positions I had different impression...
• Salaries reflected the caliber and experience of the respondents. 40% of the respondents said their earnings excessed 60,000 Euros annually. Both in UK and Ireland the bonus schemes were almost the  same and it was not unusual to have bonuses above 10,000 Euros.  In these countries the  basic salary was much lower unlike in Germany or in Scandinavia. The question and challenge of every employer to find the right ratio of  basic salary and bonuses. Do we consider the market situations and economic climate? Or whether the employee will be able to earn satisfyingly?
• Amongst other employees, Golf Course Managers (green-keepers) earned the highest salaries, with a third paid in excess of 50,000 Euros per annual. 
• Cca. 60% of Club House Managers/F&B Managers/Stewards and Membership Managers/Administrators earned less than 30,000 Euros annual.
• On average, over 90% of golf clubs perceived a need for training staff. Scandinavian golf courses received much more trainings than their British partners. This finding proves me that there are managers who do not recognize the importance of on-the-job trainings (also as part of a motivation system).Do you know that it is cheaper to retain qualified employees than find somebody to replace them? 
• Nearly 75% of the golf clubs (who participated in the survey) had a gross annual revenue under 2 million Euros. The situation is even worse in the US, where golf course revenues (median) fell by 5.1%. 
• Surprisingly 2009 was stronger than 2008 for many golf clubs in Europe from membership and visitors fee. At the same time in the US it fell by 4.6%.
• In spite of these sad facts staffing levels has not changed between 2008 and 2009. One in 5 increased their numbers of employees in this period. How is it possible? I am sure it has not happened in CEE region.

Golf course insurance as is should be

Spring is coming soon, and with it also "side effects" of post-winter time like inland waters and floods are endangering golf courses at least in Europe. But we should be also prepared for hurricanes whenever they likely to occur. As a result of increased number of environmental disasters, many insurance companies are reducing their risk exposures for property insurance primarily in coastal areas of US. Due to the increased number of hurricanes made it less lucrative for these insurance companies. I think these phenomenons will not decline as we are still do not take environment protection more seriously.

Nevertheless, most common types of claims of golf courses are (still) involved in general liability and property losses continue to occur as a result of fires; slips, trips and falls; and wind damage according to Travelers (official partner of National Golf Foundation).

Nevertheless, we hardly can find any article in golf magazines and golf industry websites about golf course insurance issues. They make as it is not effecting golf course operations. This is also true regarding personal insurances on golf courses. You will not believe, but even on R&A's website (Royal & Ancient) there is no info about this topic.

As I looked for golf course insurance solutions I found some insurance companies and brokerages who provide such services in UK and in US:

• Bradley's Insurance: http://www.bradleysinsurance.com/tee_to_green_b.html
• Allen Financial Insurance Group: http://www.eqgroup.com/afgolf.htm
• Alliant Insurance: http://www.alliantinsurance.com/Services/Specialty/MoreIndustries/Golf/default.aspx
• Golfplan (UK; official supplier of PGA): http://www.golfplan.co.uk/default.asp
• Golf Insurance Services: http://www.golfinsuranceservices.com/
• Live Asset Insurance: http://www.liveassetinsurance.com/secondary/golf-course-insurance.html
• Golfcare (UK's largest golf insurance company supported by Lloyd's): http://www.golfcare.co.uk/ - although it claims that they have solutions for golf course insurance, however there is no link on their website.
  
• Golfshield (UK): http://www.golfshield.co.uk
  
• Philadelphia Insurance Companies: http://www.phly.com/products/Golf.aspx
  

GCSAA (Golf Course Superintendents Association of America)provides two kinds of insurances, one for directors and officers liability and the second is a general/property liability insurance. Participants in the GCSAA-sponsored insurance program should plan to budget about $1,100 per year for insurance coverage.

US golf courses' revenues are sharply falling in 2009

As it was expected golf courses' revenues declined significantly not just because of the economic climate, but also the stubborn attitude of golf course owners and managers. These golf course managers should understand that as a result of macroeconomic forces they must locate new opportunities for growth and increase productivity (e.g. new payment models, second-hand balls, co-branded cards, affiliate program, artificial truffgrass, up-to-date irrigation system etc.). John Kotter says in his book, Leading Change, that managers, leaders will not make changes until they feel urgency to do so. I hope the figures of US PGA will motivate them to start thinking about changes:

 

These changes not necessarily should come overnight or to be big, rather systematic. I would say we should create short term, tangible wins.