70% of British clubs were in profit last year

A major new survey of the golf industry has found that 70 per cent of British golf clubs reported a profit last year – up from 56 per cent in 2010.

In general, golf clubs performed better in 2011 than in any other year since the economic downturn started.

The KPMG Round and revenue trends in Europe, the Middle East and Africa 2011 report showed that just seven per cent of British courses rated their business performance as ‘poor’ in 2011, down from 17 per cent in 2010. By contrast half of all UK clubs felt they had a ‘good’ year and one in 10 described 2011 as ‘excellent’. While seven in every ten British clubs made a profit last year, one in 10 stated they made a loss.

One in five UK clubs revealed they have now reached the same performance level as before the financial crisis started, although 38 per cent of UK clubs do not expect to reach that level for at least another three years, and more than half of all British clubs do not believe 2012 will be better than 2011.

Three in five British clubs are embarking on a major capital investment project this year while, for all the clubs surveyed, more than half brought in cost cutting measures, with the most popular being staff costs, in 2011. A similar number changed their pricing structure, with the vast majority of them being a reduction in the joining fee. More than two in five golf clubs also changed their approach to marketing in 2011, with many looking at social online media opportunities.

British clubs also saw 59 per cent of all the rounds on their golf courses being played by members, with the remainder by visitors. This was almost exactly in line with the average for the Europe, Middle East and Africa regions.

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It is the first time since the onset of the economic downturn in 2008 that the annual survey has returned positive results,” said Andrea Sartori, head of KPMG’s Golf Advisory Practice. “Of all the golf course owners and operators surveyed, 58 per cent of courses were profitable in 2011, compared to 49 per cent in 2010, and more than half reported more rounds played and higher revenues in 2011 compared to 2010.

“Overall, green fees were increased at 38 per cent of facilities and annual membership fees were increased at 56 per cent of facilities, each by an average of five to 10 per cent.”

The survey, of 380 golf venues across three continents, found that golf courses in Eastern Europe had both the toughest and most exceptional year, with 29 per cent stating it was poor and 35 per cent describing it as excellent.

“Elsewhere, golf courses in the Middle East and North Africa region outperformed other markets in 2011, even though some experienced poor results due to political instability, with 78 per cent of facilities surveyed reporting ‘good’ or ‘excellent’ results,” added Sartori.

“While there are signs that golf courses in Europe, the Middle East and Africa have started to recover from the economic downturn, the speed of that recovery is variable across the region and it will still take time to return to pre-downturn levels of business performance.

“Although much depends on the overall economic climate, active measures for improved business performance can significantly help facilities to develop. The golf course businesses that are performing well are successfully identifying and reaching the right target customers via effective communication channels, they offer a well-defined service mix within an appropriate pricing policy and are active in improving their cost efficiency.”