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China Now One of World's Most Expensive Places for Golf


China has become one of the most expensive places in the world to play golf, surpassing even the Middle East, according to a report by KPMG Golf Advisory Practice.

The study, published on December 1 after the completion of the World Cup of Golf at Mission Hills Country Club in Shenzhen, China, is part of KPMG's third annual Golf Benchmark Survey, which analyzes the state of the golf business across Europe, the Middle East, Africa and beyond. This is the first time China has been included and the findings reveal a unique and rapidly developing golf market that is also one of the most expensive and elitist in the world.

According to the report, China now contains some 300 courses, more than half of which have opened since 2000. While reliable statistics on the number of golfers are not available, KPMG estimates there are approximately 300,000 people who are either members of clubs or who play regularly.

However, club memberships and green fees are among the most expensive in the world. The average initiation fee of a golf club is a staggering $53,000 - more than four times the cost of a club membership in Spain and Switzerland, the countries with Europe's most expensive entry fees. One in 10 Chinese clubs charges initiation fees exceeding $100,000, with annual dues ranging between $1,500 and $4,000.

What's more, green fees are the highest of any country studied by the Golf Benchmark Survey. Chinese golfers pay on average $161 to play an 18-hole weekend round, topping the average green fee in Dubai ($152).

The report, which surveyed 70 clubs across China, cites three main factors behind the growth in golf: the rapidly expanding economy, which has generated corporate demand for the game; the burgeoning leisure and tourism industry; and media exposure driven by professional tournaments like the World Cup of Golf, which will be staged in China every year until 2018.

"There's no doubt that golf in China is catching on fast, but it is an elitist sport," said Andrea Sartori, head of KPMG's specialist Golf Advisory Services Practice in the EMA (Europe, Middle East and Africa).

"Asked about their future expectations, 98 percent of the golf course operators we surveyed said prospects were either 'excellent' or 'good.' Our analysis was conducted prior to this autumn's global financial crisis, but we still expect the medium to long-term prospects for Chinese golf to be strong," Sartori added.

"If even one in every thousand Chinese played golf by 2030, that would add up to 1.3 million golfers, requiring perhaps 1,700 new courses over the next two decades. But the extremely high pricing policy and the government's continuing ban on the development of golf courses on agricultural land could be barriers to that kind of growth."

Other key findings in KPMG's study reveal that:

* Golf is dominated by men in China: 87 percent of club members are men;

* Annual club subscriptions vary greatly in China, and are often negotiated privately with individual members, according to the member's "business value to the club";

* 86 percent of Chinese courses are rated by their operators as "good quality" or better. Many golf complexes incorporate lavish hotels and property developments, plus other leisure facilities like accommodation (46 percent), tennis courts (43 percent) and health clubs (43 percent);

* Membership numbers per course are relatively low, averaging 403 players per 18-hole course, compared with 1,094 in South Africa and 703 in Great Britain and Ireland;

* Staffing at Chinese courses is extremely high, higher than any region covered by the Golf Benchmark Survey. An 18-hole course employs on average 258 full-time staff, more than 10 times the number employed by courses in Western Europe;

* 94 percent of courses are owner-operated, and outsourcing of activities is rare. Most courses run their own pro shop (86 percent), food and beverage operations (85 percent) and golf academies (95 percent).

As well as Europe, the Middle East, Africa and elsewhere, the 2008 Golf Benchmark Survey includes three new regional reports on China, South America and North Africa. Golf courses submitted key data from 2007 financial results to the overall Golf Benchmark Survey, which is designed to help golf course owners and operators to compare their own business against high, average and low performers in their geographic markets.

The China regional report is now available to download free of charge, from: www.golfbenchmark.com.