The golf course has been one of Western Europe’s better job factories. The continent now has some 6m golfers, who spend an average of $1,700 a year each on their addiction. This $10 billion golf industry is already bigger than wine-making – and it accounts for roughly 150,000 jobs. A biggish course can employ 50 people directly – to say nothing of the architects, construction staff, equipment suppliers, clothing makers, golf writers and other hangers on.
Recently, this success story has run into the rough. Part of the problem is over-expansion. In 1992 alone, 255 new golf courses opened in Western Europe, nearly 6% of the total ever built there. Once open, few golf courses actually close: running costs are far smaller than building costs. But many keep going courtesy of their bankers. “A lot of people have had their fingers burned in the golf boom,” says Michael Ford of Golf Enterprise Europe, a publishing company. In Britain, Compton Holdings, which as backed by Peter Alliss, a golf commentator, and was developing a dozen or so courses, recently went bust.
Although the recession is partly to blame, so are the course designers. The continent relative beginners have been confronted with punishingly difficult courses, where woods and lakes swallow up their balls. Some 93% of French golfers have a handicap of 16 or more – ie they hack. These failed Faldos want easy courses, near cities, nine cheap-and-cheerful holes rather than 18 dear-and-difficult ones. France is now embarked on a programme to build 100 golf courses where green fees are around FFr100 ($12). In America, whose golf industry is twice as big as Europe’s. four in five new courses are the easier kind Joe Public wants, at an average green fee of $24 a go.
Another problem is that most European golf courses are owned by individual developers. In America and Japan bigger firms dominate. Now these outsiders are invading Western Europe. Japanese firms already own several smart new clubs around London as well as the Penha Longha club in Portugal, which boasts five villages, 26 greenkeepers (for 18 holes) and an irrigation system controlled by satellite. Membership is a pinch at $36,000.
As America’s home market matures – it had 14,375 courses at the end of 1992, 18 holes for every 22,000 golfers, compared with 18 for every 84,000 in Europe – big firms are turning their eyes to Europe. For example, Club Corporation International is the world’s largest golf-club operator, with revenues of $850m in 1993: Jim Maser, the head of ClubCorp Europe, says he has been “nosing around for a year and a half trying to learn the markets”. He expects his first deal this year, with Britain, France, Spain and Italy his targets. American Golf Corporation has just bought four British courses from the defunct Compton Holdings. The big airline companies and hotel chains will not be far behind.
With the prices of golf clubs still falling and much of the hard work already done, profits are there to be had. “It’s not the first, or even the second owner of a golf course who makes the money,” argues Colin Hegarty of the Golf Research Group. “It’s the third owner.” Bad luck for the entrepreneurs who first sent in the bulldozers. But good for the army of workers who earn a living from the appetite for hitting a ball into a hole with a stick.