Sunday 5 July 2020

IMPACT ON THE GOLF INDUSTRY – POST COVID 19


Despite the setback the golf industry has faced in the first half of 2020, the outlook for the growth of golf is still positive. This is because golf continues to be an aspirational sport in this country. State governments, realizing its value, place a premium on the development of a golf course in order to attract international investors and cater to a more global audience for their projects. This is especially true in the proposed SMART City development projects being undertaken across the country. In order to attract, investment and interest in the project, the government is looking to provide world class amenities in these proposed cities and golf development is an important element. 
Despite the temporary shock experienced during the COVID 19 lockdown period, development of these projects will continue. State governments are also seeing the potential of golf tourism and actively encouraging the development of golf in tourist spots to promote these zones. As states look to appeal to not just a domestic but international audience, among other facilities, golf stands out as an activity which they are keen to embrace. 
In addition to renewed interest from the public sector, in a post COVID 19 world golf development will also find favor with the private sector developers. The reforms brought about by introducing RERA and the access to funds from REIT will provide immense support and stimulus to developers. These reforms bring a uniform level of quality and higher standards of quality required for golf development projects. It is expected that larger companies will be more aggressive with their expansion and launch projects targeting an affluent segment. As a luxury lifestyle development golf stands to benefit from this expansion. 
With regard to the consumer market, the initiatives launched by the government so far have increased access to credit for individuals and the moratorium on loan repayments is also a positive move. As home buyers have more credit, the demand for residential projects will increase. This growth will also be seen in secondary and tertiary towns which will see more new projects as against the saturated metros in the country. Going forward the demand for golf can be from these secondary cities as they seek attract ‘second home’ buyers from the cities as well as premium customers from those locations. 
The philosophy of using golf to add value to a development continues to be sound. However, our engagement with developers must evolve. Designers must be more sensitive to the costs involved in golf course construction and land aggregation in India. Golf course designs must be environmentally sensitive and conservative in resource utilization. Golf courses have always provided multiple benefits to urban and suburban locations: 
1.    Golf courses act as buffer zones, protecting local flora and fauna 
2.    In major towns and cities golf courses act as important lung spaces 
3.    Local labor employed on golf courses as caddies or maintenance personnel will provide invaluable employment for underprivileged youth in secondary towns and the urban poor 
4.    Golf courses can be partially utilized as environmental parks and access can be allowed to the public in certain areas of the course at certain times.  
5.    It is possible to develop golf courses on landfill sites of the city, allowing the land to be utilized rather than leaving it undeveloped, ugly, unhealthy and in-arable  
6.    Areas surrounding the golf course also benefit as the land value around a golf course appreciates faster than those further away 

It is important to highlight these ideas around development of golf especially in a post Covid 19 world. Golf facilities need to be sensitive to conditions of the environment and needs of the community. The positive changes in real estate development policy offers the opportunity to change the way golf development is perceived. If more golf courses are successful, they will set powerful precedents for the future. Post Covid 19 offers a new future where golf is not viewed as a resource consuming enterprise, but an enterprise that is sustainable, ecofriendly and positive to the community. It is time to write the next chapter in the growth story of golf in India and learn from earlier mistakes.  

Tuesday 7 April 2020

Golf after a pandemic – Where do we go?

The world is experiencing unprecedented times; a severe pandemic, the economic repercussions from countries enforcing nationwide lockdowns, global supply chain networks have come to a virtual standstill, people are changing their lifestyles – either working from home, or social distancing – the fallout of all this will have lasting impacts on our society and world view. 

One of the earliest industries to be impacted by this pandemic was the sports industry. As news of infections spread, sports associations and bodies announced cancelation of events/matches, isolation for players and suspension of matches held in stadiums to prevent spreading the infection to unsuspecting fans (Of course as the virus become more contagious, with WHO directives, governments began preventing people from gathering in large numbers and this included sporting events). 
The loss of revenue across the globe translates to billions of dollars (there is a loss of sponsorship, loss of TV revenue as well as loss to players who have to retrain to again achieve match fitness after such a unprecedented and extended break. 

The sport I would like to focus on, is golf. Even before the novel coronavirus outbreak, golf had been going through a silent crisis. The repercussions from the global 2008 financial crisis had left the industry reeling with extraordinarily high course closures, very limited new golf course construction and even fewer new participants into the game. 
In an effort to counter this, the industry tried various methods of engagement, a drive pitch and putt program was introduced by the USGA to promote golf across the USA and get youngsters excited about the game by reducing the distance factor. Many developers began constructing shorter golf courses (par 3 or 9 hole courses) thereby reducing the capital cost of land required. You did not need over 150 acres to create 18 holes of golf. New events promoting the ‘fun’ aspect of golf, were created such as the ‘World Long Drive Championship’ which featured ‘pros’ who were specialized in only long driving. The European tour began introducing ‘skills challenges’ before tournaments for participating pros such as a 14 club challenge, horse etc. 
Top Golf in the USA began operations and captured the imagination of the non golfer by making the concept of a driving range fun and similar to going to a bowling alley. It has now grown outside the US to Europe and parts of the middle east. 
All this finally culminated, with the R&A and USGA taking some bold decisions in 2019 to do away with unnecessary rules and simplifying procedures for golfers across the globe. 

At the end of 2019, the industry was in an exciting place. There were encouraging numbers emerging about youngsters taking the game, developing countries were looking to embrace golf through golf tourism, course construction numbers were on the rise; albeit in a different style – 9 hole and par 3 courses; professional golf tours were seeing some increased numbers in spectators and viewership both from online platforms and TV coverage. 

And now a lockdown. 

So, what lies ahead for the industry and how can we as golfers pick ourselves up from here. 

There is no secret, the growth of the golf industry is tied to the economic climate of the country – favorable and growing economy will encourage golf development and growth in club memberships. 

The novel coronavirus has dealt a body blow to global economies. Major economists are even suggesting a paradigm shift with countries looking at their own self interest rather than the good of their neighbors. 
In this scenario, golf being a lifestyle and luxury industry will be impacted (Some sections of the industry more severely than others). For example though professional tournaments will resume, the number of spectators for non major events may see a decline (due to social distancing advisories or even lack of disposable income to purchase tickets) 
In this new world, the industry must embrace changes positively and proactively. The governing bodies of the sport must start to recognize multiple alternative formats of the game that exist. Rules the regulations must be formatted to encompass these styles of play. The bodies must be proactive in reaching out for new ideas that will be beneficial to all participating countries for the sport. This dovetails into the next crucial point which is to establish a global council for golf, with representatives from penultimate national bodies in each country. 
The professional tours of the PGA, European and Asian tours are doing their bit to get involved with the participating regions. From profiling professionals from various backgrounds, to announcing a schedule that takes the tour to new and developing locations, to announcing even a back to back schedule, this takes golf to the spectators and also ensures more events and more opportunities for upcoming professionals. 
Golf course designers and developers need to now design golf courses that are sustainable and environmentally sensitive. Developers need to be advised to look at alternative golf course designs such as par three’s, pitch and putt facilities, which offer the look and feel of the golf but at a fraction of the cost. Affordability needs to be a buzz word for designers. 
Unfortunately as a player and member of a golf club, the impact of the virus will leave me with less disposable income. Reducing numbers of members, no appetite for high green fees, is going to hurt golf courses. 

The pandemic has pushed the golf industry to a cross roads. The band aids introduced post the 2008 financial crisis, were only temporary, but a further more deeper view needs to be taken. The governing bodies of the sport must evolve to truly look at controlling, developing and nurturing this industry in a hands on approach rather than the back seat. National bodies for the game must embrace stakeholders of the industry in their region to discuss future development, growth, new technology and new ideas. This could include – highlighting new golf courses through the professional, community engagement is another, enforcing engagement with home clubs. 

I would like to conclude with a thought - Some time ago a debate raged about the length of courses, professionals are hitting the ball longer our golf courses are not long enough. The courses need to be longer to be tougher. What should we do? I believe the novel corona virus pandemic answers this question. Golf courses need to be built to be sustainable and profitable. Creating a course for a tournament held once a year is not a viable solution. In fact it is a major reason why golf courses are closing down. If football players are fitter and have more stamina, you don’t build bigger football pitch. When athletes push their bodies to run faster and faster, do you change the size of the track?
You adapt what you have to accommodate this new dynamic. Courses can alter their designs to factor the new further length, new hazards can be developed using natural topography, careful selection of golf courses for the schedule is also critical. Setup of those courses also becomes a new area to develop ad explore.
What I am trying to say is the mind set around golf needs to change. We need to think out of the box, because though we may apply another band aid, the old wounds have not yet healed.