This KPMG report for Europe, the Middle East and Africa provides a wealth of information on the cost of developing a golf course, based on the responses from owners and developers from over 100 recently constructed or under development facilities.
Some of the main difficulties for developers are obtaining necessary permits (35% of respondents), environmental opposition (23%) and water availability (15%). Not surprisingly, water availability was a major issue for developers in the Middle East. Of all pre-construction costs, 21% was spent on obtaining permits.
The total cost for developing and constructing an 18-hole course across the EMA varied from €2.4 to 11.7 million. A 9-hole course was, typically, three to four times less costly to develop, averaging between €1.5 to 2 million. 24% of the cost of construction was spent on irrigation and drainage, with 32% spent on earthwork and shaping.
Whilst the main drivers for developments are financial, with 72% of respondents citing a positive impact in the surrounding development or expected profitability as the key motivational factors for developing or extending a course across the EMA region, an encouraging 47% in Eastern Europe were motivated by a personal interest in golf.
100% of respondents in the Middle East (100%), 91% in Sub-Saharan Africa and 88% in Eastern Europe stated that their developments were integrated with tourist resort or residential community, averaging at 55% over the region. 46% of respondents reported that the golf course delivered a premium element to the selling price of related real estate units above 20%. 82% reported an anticipated return over 11%. Over two thirds of respondents expect the golf course to provide a satisfactory return on investment in its own right. This suggests that developing a golf course as part of a resort or real estate complex is not merely mitigation for a significant concrete footprint.
Golf course architects surveyed foresee China, India, Russia and CIS, South America and Caribbean and South-East Asia as the future hot spots for growth in golf course development, though 40% of the architects reported stagnation in their business in the last 6 years.
The KPMG report is available from their Golf Benchmark website here.
There are a number of surveys on the state of the game in the Industry Intelligence section of the HSBC Golf Business Community website here.