GOLF ADVISORY PRACTICE IN EMA

Golf participation in Europe 2011

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Golf participation in Europe 2011 / Golf Advisory Practice in EMA

Headline facts

• Aftermorethan20yearsofgrowth,Europe’sgolfmarketexperiencedthefirstdeclineingolfparticipation,withanetlossof46,000registeredplayersin2011.

• Ninecountriesexperiencedadeclineinthenumberofregisteredgolfers,butthemostsignificantfallswereinthreelargegolfmarkets:UK&Ireland-42,700(-3.1%),wherethenumberofgolfershasbeenfallingsince2007,Sweden-21,000(-4.1%)andSpain-9,700(-2.9%).

• SomecountrieshavecounterbalancedEurope’soveralldeclineingolfparticipation:Germany +10,800(1.8%),theNetherlands+7,600(2.2%),Finland+4,600(3.6%)andEasternEurope’s mostestablishedgolfmarket,theCzechRepublic+3,500(7.6%).

• Despitetheirpotential,thegrowthindemandfor golfinEasternEuropeancountrieswasinsignificant,inabsoluteterms,in2011.

• German-speakingcountries1andtheNetherlands,remainflagshipmarketsforfemaleparticipation,withmorethan30%ofplayersbeingwomen.Femaleparticipationisalsohighinthesecountriesinabsoluteterms,providingatotalof430,000womengolfers(40%ofthetotalinEurope).

• Someemergingmarketsencouragegolfparticipationthroughjuniorprogrammes,whichisreflectedinthenotablyhighshareofjuniorgolfersinsomecountries(e.g.Turkey,Serbia,Greece).Whileinabsolutetermsthisrepresentsonlyafewthousandyoungplayers,thisisapotentiallyimportantfactorinthefuturedevelopmentofthegameinthesecountries.

• Nocountriesexperiencedasignificantgrowthin golfsupply,butsomenewcoursesopenedinGermany,theNetherlands,theCzechRepublicandPoland,forexample.

Development of golf participation in Europe

Attheendof2011,therewereatotalof6,740golfcoursesandnearly4.4millionregisteredplayersinEurope,resultinginanaverageparticipationrateof0.73%(basedonatotalpopulationof600million)2.

Followingdynamicgrowth(6%peryear)sincethe1980’s,andamodestincrease(1-2%)inthelastfiveyears,Europe’sgolfmarketenteredadownturnin2011.Whilethenumberofgolfcourseshasremainedstagnant,participationinthegamestartedtodecrease,resultinginanetlossof46,000registeredgolferslastyear.

ItisgenerallybelievedthatthestagnationofEurope’sgolfmarketcanbeattributedtotwoprincipalfactors:• Significantdecreaseinregisteredgolfersinsomeof

Europe’slargestgolfmarkets,notablytheUK&Ireland;• LackofdynamicgrowthinEurope’semergingmarkets

(e.g.EasternEuropeandtheSouth-EastMediterranean).

ItshouldbehighlightedhoweverthatintheUK&Irelandgolfersdonotneedtoberegisteredtoplay,and,assuch,thereductionofregisteredplayerscouldbeattributedtocancellationsofclubmemberships.Manyoftheseso-called“casualgolfers”continuetoplaythegameonagreen-fee(dailypay-and-playfee)basis,onwhichtherearen’tanyaccuratestatisticsavailable.Assuch,althoughthesignificantdropinregisteredgolfersisaclearindicationofdecreasingdemand,itishardertomeasuretheimpactonthenumber ofrounds.

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Source: EGA and local golf federations with KPMG elaboration

1 Germany,AustriaandSwitzerland2 Wehaveonlyconsideredthepopulationofcountrieswithatleastonegolfcourse.

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 2011, European golf experienced its first fall in participation in more than two decades. Which countries lost golfers in 2011, 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.

Supply and demand characteristics in 2011

ThegolfmarketinEuroperemainsconcentrated,with92%ofallgolfersand90%ofcoursesfocusedinonly10countries.TheUK&IrelandalonehavethehighestshareofdemandinEuropewith30%ofplayersandthehighestshareofsupplywith44%ofcourses.

� UK & Ireland 44%� Germany 10%� France 9%� Sweden 7%� Spain 5%� Italy 4%� Netherlands 3%� Denmark 3%� Norway 3%� Austria 5%� Other 10%

Distribution of supply in Europe

� UK & Ireland 30%� Germany 14%� Sweden 11%� France 9%� Netherlands 8%� Spain 8%� Denmark 4%� Finland 3%� Norway 3%� Austria 2%� Other 8%

Distribution of demand in Europe

Source: EGA and local federations, with KPMG elaboration

ThefollowingmapsindicatethematurityofEurope’sgolfmarkets,accordingtothesizeofpopulationpergolfcourse,andtheproportionofthepopulationplayinggolf.

Market demand:Participation rate(affiliated golfers only)

Market supply: Population per golf course

� mature ≤ 25,000 people� developed 25,000 – 100,000� growing 100,000 – 300,000� infant ≥ 300,000

� mature ≥ 5%� developed 1%-5%� growing 0.2%-1%� infant ≤ 0.2%

Source: EGA, local golf federations and Eurostat, with KPMG elaboration

InrecentyearsgolfsupplyanddemandhasbeenrelativelystableinmostEuropeancountries,resultinginlittlechangeinmarketmaturity.TheUKandIrelandremainEurope’smostmaturemarkets,alongwiththeNordiccountries.Infact,Sweden,Iceland,Denmark,FinlandandNorwayhavethehighestparticipationratesinEurope,paralleledwithastrongsupplyrelativetothepopulationsize.

� Male � Female � Juniors

0% 20% 40% 60% 80% 100%

Croatia* 86 14

Poland 80 15 6

UK & Ireland 75 15 10

Portugal 73 19 9

Hungary 71 19 10

Cyprus 70 24 6

Bulgaria 70 11 19

Lithuania 69 15 17

Estonia 67 24 9

Latvia 66 11 23

Norway 66 24 11

Italy 64 24 12

Netherlands 64 31 5

Denmark 63 29 8

France 63 26 11

Sweden 62 27 11

Greece 62 13 25

Iceland 62 25 14

Romania* 61 15 24

Spain 67 29 5

Slovakia 61 26 13

Finland 60 27 13

Belgium 59 29 12

Czech Rep. 59 27 15

Slovenia 58 28 14

Switzerland 58 33 9

Luxembourg 57 29 13

Germany 56 35 9

Austria 55 35 10

Serbia 55 11 34

Turkey 34 14 52

Composition of golfers in countries across Europe

*2010 data, no data available on 2011Source: EGA and local federations, with KPMG elaboration

Althoughthecompositionofgolferschangedinsomecountriesin2011,malegolferscontinuetodominateEurope’sgolfmarket,representingapproximately65%ofallplayers.Womenandjuniorgolfersmakeup25%and10%ofthetotal,respectively.

WhiletotalfemaleregistrationshavebeendecreasingacrossEuropein2011byabout2%,Germany,Switzerland,FinlandandtheCzechRepublicmanagedtonotablyincreasethenumberoftheirfemalegolfers–Germanybymorethan5,700,andthelatterthreeby1,000-1,400each.

©2012KPMGTanácsadóKft.,aHungarianlimitedliabilitycompanyandamemberfirmoftheKPMGnetworkofindependentmemberfirmsaffiliatedwith KPMGInternationalCooperative(“KPMGInternational”),aSwissentity.Allrightsreserved.

German-speakingcountriesandtheNetherlandsremaintheflagshipmarketsforfemaleparticipation,withmorethan30%oftheirplayersbeingwomen.GermanyandtheNetherlandsarenotonlyamongthetop-fivecountriesintermsofproportionofwomengolfers,butalsoinabsoluteterms:bothcountriesboastsignificantnumbersoffemaleplayers.

0 50,000 100,000 150,000 200,000 250,000

Germany 214,663

UK & Ireland 193,564

Sweden 131,836

Netherlands 110,345

France 104,315

Top five countries in terms of absolute female golfers

25% 27% 29% 31% 33% 35% 37%

Germany 35%

Austria 35%

Switzerland 33%

Netherlands 31%

Denmark 29%

Top five countries in terms of share of female golfers (compared to all golfers in the country)

Source: EGA and local federations, with KPMG elaboration

Thejuniorgamealsodroppedlastyear,withthethree largestmarkets,theUK&Ireland,SwedenandGermanyrecordingatotaldecreaseof25,000inthenumberofjuniorgolfersin2011.

Althoughstartingfromalowbase,Bulgaria,Serbia,SlovakiaandGreecehaveseenapositiveshifttowardsahighercompositionofjuniorgolfers.Turkeyisstillexperiencingjuniorgrowthfromthe”GolfJuniorLeague“initiative,havingaddedmorethan900golferssincetheprogrammewasintroducedin2009.

0 50,000 100,000 150,000

UK & Ireland 132,855

Sweden 53,901

Germany 52,881

France 46,107

Netherlands 17,260

Top five countries in terms of absolute junior golfers

0% 10% 20% 30% 40% 50% 60%

Turkey 52%

Serbia 34%

Greece 25%

Romania* 24%

Latvia 23%

Top five countries in terms of share of junior golfers (compared to all golfers in the country)

Source: EGA and local federations, with KPMG elaboration

Key initiatives across Europe• Grow the Game of Golfisaninitiativesetupin

conjunctionwithanumberoforganisationsincludingtheEGCOA,TheEuropeanTour,andtheEGIAwiththecommongoalofinspiringandencouraginggolfclubsandassociationstohelpgrowthegamefromagrassrootslevel.Theyadvertisemanyinitiativesfromnationalandlocalbodieswhichhaveprovedsuccessful,indicatingtheneedforstructureandsupporttodevelopthesportfromaparticipationperspective.

• Clubgolfisagovernment-backedinitiativetogiveeverychildinScotlandthechancetoplaygolffollowingthecountry’ssuccessful2014RyderCupbid.Onehundredfortythousandjuniorshavealreadybeenintroducedtotheconcept.

• Germanyisaleadingexampleinencouragingwomentoplay,allowinghigherhandicaps (amaximumof54).

• IntheNetherlands,Kids4Golfisanon-profitorganisationaimedat8-12year-olds,providingfungolfeventsinpublicrecreationareas,withspecialballsandchildfriendlyhole-lengths.

• AgainintheNetherlands,Fun Factories is for childrenaged5-12years,with10-15eventsheldannually.Establishedin2002,therearenow 50participantsateachevent,onaverage.

• Slovenia Plays GolfisapackagedealtheSlovenianGolfAssociationisrunning,whereEUR99enables aplayertoacquirealicenceanda54-handicap. TheschemestartedinApril2011andtherearecurrently1,800playersenrolled,fromwhich 1,000areprojectedtobecomefullclubmembers.

©2012KPMGTanácsadóKft.,aHungarianlimitedliabilitycompanyandamemberfirmoftheKPMGnetworkofindependentmemberfirmsaffiliatedwith KPMGInternationalCooperative(“KPMGInternational”),aSwissentity.Allrightsreserved.

What’s next for golf in Europe?

Whileweexpect2012toremainatoughyearforEurope’sgolfmarket,arecoveryintheEurozoneandanoverallupswingintheworldeconomywouldplayanimportantpartintheuptakeofgolfbynewandreturningplayers.However,thetimingandnatureofsucharecoveryisobviouslydifficulttoforecast.

Someofthecountrieswheregolfcontinuedtogrowin2011–notably,GermanyandFinland–havebenefitedfromrelativelyresilienteconomies,giventhescaleoftheeconomicdownturnacrossEurope,andenduringuncertainties.Thesecountriesremainwellpositionedtoseeagrowthinbothnumbersofplayersand,toalesserextent,courses.

WheregolfhadpreviouslybeentippedtogrowsignificantlywastheemergingmarketsofCentralandEasternEurope(CEE).DespitetheCzechRepublic’simpressivegrowthfigures(7.6%increaseinthenumberofplayerstonearly50,000,andsevennewcourses),demandandcoursedevelopmenthassloweddownacrosstheregion.

However,basedonoursurveyofindustryexperts,expectationsfortheCEE–aswellastheMediterraneanregion–remainhigh,followingarecoveryfromtheeconomicdownturn.Onceagain,thetimingishardtopredict.

Thereisnodoubttheapparentdrop-offinthenumberofregisteredgolfersinEurope’slargestgolfmarket,theUKandIreland,wassignificantin2011,andfollowsanongoingtrend.However,itisdifficulttodeterminehowmuchofthisisasaresultofgolfersgivingupclubmembershipsinfavourofplayinggolfonacasualordailyfeebasis,orgivingupthesportaltogether.(UnlikeotherEuropeancountries,golfersintheUKandIrelanddon’thavetoberegistered.)

Thereareseveralinitiativesaimingtooffsetthisnegativetrend.Forexample,theOver45’sProjectisalocalschemethathasbeenrunninginconjunctionwithEnglandGolftoinvolvepeopleagedover45aspartofafitnessandsocial

concept.Significantfundshavebeenallocatedforthisinitiativebetween2009and2013.

Afutureprojectsettoberolledoutin2012isanewconceptwiththeEnglishGolfPartnershipencouragingadultstostartplayingquick,socialgolfwithroundslastingnolongerthan60minutes.Whiletheseareallpositiveexamples,thelackofproperpromotionoftenhindersthesuccessofsuchinitiatives.

InWales,theRyderCupLegacyhasputsignificanteffortintogrowingtheyouthgame,whichsawpeaksin2008.But,justtwoyearsaftertheRyderCup,thereisacallforcontinuedsupportandinvestmentinfreshandnewinitiativestoturnaroundtherecentreductionofjuniorplayers.

WhilemuchofthegolfmarketstagnationinEuropemaybeattributedtotheoveralleconomicclimate,continuedsupportandinvestmentinnewprogrammeswillbeneededtosustaindemandandgeneratefurthergrowthinthegame,especiallyinmatureanddevelopedgolfmarkets.

Golfclubsneedtoproactivelyandeffectivelyfaceuptothechallengingeconomicclimatetoretainmembersorattractnewgolfers.Basedonoursurvey,ratherthanintroducingyouthandfamilypromotionalprogrammes,30-40%ofEurope’soperatorsandclubmanagersactuallyincreasedpricesin2011.Ontheotherhand,morethanhalfofclubshavenotenhancedmarketingefforts–and(somewhatsurprisingly)manyhavenotyetcapitalisedontheopportunitiesprovidedbyonlinemarketingandsocialmedia.

Today,thereisaneedforjointeffortsbyindustrystakeholders–arguablymoresonowthanatanytime inthepasttwodecades.Therefore,whateveraspect oftheindustryyourepresent,weinviteyoutoshare yourthoughts,bestpracticesandcreativeideason www.golfbusinesscommunity.com.

Forclarificationregardingtheresultsofthisreport,pleasecontactusatgbc@kpmg.hu.©

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KPMG’s Golf Advisory Practice in Europe, Middle East and AfricaH-1139 Budapest, Váci út 99 Hungary

T:+3618877100 E:info@gbc.hu

Theinformationcontainedhereinisofageneralnatureandisnotintendedtoaddressthecircumstancesofanyparticularindividualorentity.Althoughweendeavourtoprovideaccurateandtimelyinformation,therecanbenoguaranteethatsuchinformationisaccurateasofthedateitisreceivedorthatitwillcontinuetobeaccurateinthefuture.Nooneshouldactonsuchinformationwithoutappropriateprofessionaladviceafterathoroughexaminationoftheparticularsituation.

TheKPMGname,logoand“cuttingthroughcomplexity”areregisteredtrademarksortrademarksofKPMGInternationalCooperative(“KPMGInternational”).

©2012KPMGTanácsadóKft.,aHungarianlimitedliabilitycompanyandamemberfirmoftheKPMGnetworkofindependentmemberfirmsaffiliatedwithKPMGInternationalCooperative(“KPMGInternational”),aSwissentity.Allrightsreserved.

Appendix

Country statistics: Affiliated players and regular golf courses in Europe, 2011

Country Players % Change from 2010

Courses % Change from 2010

Participation rate

Population per golf course

UK & Ireland* 1,326,663 -3.1% 2,989 -0.1% 1.98% 22,388

Germany 610,104 1.8% 708 1.1% 0.75% 115,468

Sweden 491,401 -4.1% 454 -0.4% 5.22% 20,739

France 407,530 -0.7% 578 0.7% 0.65% 109,232

Netherlands 351,640 2.2% 201 4.7% 2.11% 82,865

Spain 328,495 -2.9% 349 1.2% 0.71% 132,243

Denmark 151,185 -0.9% 181 0.6% 2.72% 30,722

Finland 142,184 3.6% 126 0.0% 2.65% 42,661

Norway 121,736 -2.7% 173 -0.6% 2.47% 28,441

Austria 104,490 0.0% 149 -1.3% 1.24% 56,404

Italy 100,548 0.2% 273 1.5% 0.17% 222,075

Switzerland 79,843 4.1% 94 0.0% 1.01% 83,686

Belgium 55,206 3.8% 79 0.0% 0.50% 138,629

Czech Rep. 49,849 7.6% 89 8.5% 0.47% 118,346

Iceland 16,054 3.4% 66 0.0% 5.04% 4,825

Portugal 14,656 0.8% 88 4.8% 0.14% 120,875

Slovenia 8,495 7.5% 13 8.3% 0.41% 157,707

Slovakia 6,732 12.2% 13 8.3% 0.12% 418,098

Turkey 5,649 2.0% 19 5.6% 0.01% 3,880,157

Luxembourg 4,023 -2.1% 6 0.0% 0.79% 85,307

Poland 2,750 0.0% 29 20.8% 0.01% 1,317,243

Estonia 2,088 6.8% 8 14.3% 0.16% 167,524

Hungary 2,028 -19.2% 13 0.0% 0.02% 768,132

Greece 1,780 33.3% 8 14.3% 0.02% 1,413,736

Cyprus 1,227 -9.2% 10 11.1% 0.15% 80,444

Latvia 900 16.1% 3 0.0% 0.04% 743,214

Romania** 551 0.0% 4 0.0% 0.00% 5,353,454

Croatia** 550 0.0% 3 0.0% 0.01% 1,470,712

Bulgaria 535 222.3% 6 50.0% 0.01% 1,250,811

Serbia 440 46.7% 2 100.0% 0.01% 3,638,098

Lithuania 408 -5.1% 6 20.0% 0.01% 540,767

Europe total 4,389,740 -1.0% 6,740 0.7% 0.73% 88,823

*Pleasenotethat,asopposedtomostEuropeancountries,intheUK&Irelandgolfersdonothavetoregistertoplay.Assuch,thereareagoodnumberofadditionalplayerswhoarenotmembersofagolfclubbutregularlyplaygolf.Wehavenotconsideredtheseunregisteredgolfersinourstatistics.**2010data,nodataavailableon2011Sources:EuropeanGolfAssociation,localgolffederationsandEurostat,withKPMGelaboration