In a new quarterly column, Eric Lynge, Head of SMS Asia, looks at some of the striking trends affecting sport and leisure in Asia. His first piece focuses on Korea’s role as the next driver in global golf.
The next driver in global golf
A few years ago, I was invited by one of Korea’s leading groups to address a group from the global golf industry at a summit alongside one Korea’s most prestigious golf tournaments.
At that time, to communicate what I saw as the growing global impact of the Korean golf industry, I told the audience that Korea was the “New Home of Golf”. While ticking off the reasons for this moniker, I realized that it did not really hit the mark nor resonate accurately with the audience. Nothing can replace nor duplicate Scotland as the true home of golf.
What may be a more accurate descriptor for Korea would be “the next driver in global golf”.
Why do I think that’s the case? There are a number of reasons that are even truer now than they were then.
Domestic demand rising in Korea
Firstly, on the domestic side, when travelling to Korea, it is hard to miss the prominence of golf in the fashion and media. At the airports, airbrushed images of fashionable male and female golfers with the appropriate brands are part of the advertising panel parade to customs and beyond. When you check into a hotel and browse the local TV offering, many broadcasters are airing Golf Dramas and Golf Variety Shows where K Pop and Korean Golf Player Legend and Celebrity influencers have merged into a golf centric idealized aspirational lifestyle tableau. The breadth of apparel and equipment on offer is far broader than most markets with niche European and Asian brands being sold in addition to traditional golf offerings.
Korean golf fans can watch PGA Tour, LPGA Tour, DP World Tour, Asian Tour, KLPGA Tour and KGT Tour Golf, all commentated in Korean with studio analysis and presentation equivalent to watching the Golf Channel in the US. This is reflective of the universal success of Korean golfers spawned by success of Se Ri Park on the women’s game and KJ Choi and YE Yang in the men’s game and continuing to this day with the historic form on Jin-Young Ko and other young guns on most professional golf tours. Indoor golf tournaments are also televised and commentated upon with prize funds and a fan base as well.
Golf course acquisitions surge
The golf course industry in Korea is also booming. Recently, an 18-hole public golf course near the capital city of Seoul was sold for the astronomical price of USD 160 Million, which is close to USD 9 Million per hole. Only a few years ago, many courses were financially stressed due to the practice of courses in development committing to return of initial investment within 5 years. This model worked well in the golf boom up to 2008, but it was followed by a period of membership price decline. Some clubs restructured to go public. Others stayed private but allow public play at a premium fee. With the growth of golf in Korea accelerated by the COVID-19 pandemic, the restructured models are now resulting in a renewed speculative membership market while offering broader access to golf for the non-member public. With record prices being paid for golf courses in Korea and green fees increasing, the demand for foreign acquisition is being felt globally, with Korean companies on buying sprees of golf clubs and resorts outside their border.
Travelling golfers provide food for thought
The travelling Korean golfer has also had a huge impact on the golf economies within Asia. Pre-pandemic, the power of the travelling Korean golfer, whether a high-spender or a medium spender, supported many golf clubs in South East Asia. Whole courses would be leased during winter months for Korean golfers in Thailand, the Philippines and other markets. Kimchi and Bulgogi are more ever-present dining option than Hamburgers and Club sandwiches in most clubs in Asia. It is safe to say that the travelling Korean golfer is more adventurous than most and huge travel tour groups often serve their interests. The travelling Korean golfer is now taking his/her travel bag out of storage and planning resumption of overseas golf junkets. With travel opening up now, many markets in South East Asia are waiting for the floodgates to open and Koreans who have been finding tee off times at a premium due to overdemand and undersupply of tee times at home, are ready to start travelling again and providing a huge boost to the golf economics of their destinations.
Corporate investment is fuelling the surge
On the corporate side of golf, the influence of Korea is well established. Golfzon and its success has been a harbinger of the development of robust domestic golf-related consumer businesses in Korea which are now being exported to overseas markets. In the international arena, Fila Korea Ltd. and Mirae Asset Private Equity, which are both Korean firms, acquired Acushnet, the owner of Titleist and FootJoy, in 2011. This started a trend that has recently been highlighted by the major purchase of TaylorMade Golf by Korean private equity firm Centroid Investment Partners in 2021. This trend will undoubtedly continue, with Koreans’ affinity for golf merging nicely with the uptake in the industry globally and the growing financial power of Korean investors.
So, with globalization of the game and the resumption of travel, expect Korea and its golf crazy players and investment community to be a major contributor to the growth of the game for years to come.
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