South America’s rapidly developing golf market has “phenomenally high potential,” according to a report released today by KPMG.
The Golf Benchmark Survey regional report for South America reveals that the number of registered golfers is increasing by a staggering 10 percent per year.
Fuelled by high growth economies, extensive media exposure of successful international golfers such as Argentina’s Angel Cabrera and Colombia’s Camillo Villegas, plus ideally suited weather conditions and varieties of terrain, there are an estimated 130 courses currently under construction or in advanced stages of planning across South America.
“We believe there is phenomenally high potential for golf in South America,” says Andrea Sartori, head of KPMG’s Golf Advisory Practice in EMA (Europe, Middle East and Africa). “The popularity of the game has increased significantly in the past 10 to 15 years, helped in part by a growing media interest in the sport, but also because the game is becoming more accessible to more people and is slowly losing its elitist image, underlined by the development of more driving ranges and semi-public golf courses.
“The promotion of several areas of South America as golf tourism destinations also has helped popularize the game and the development of new golf resorts.”
There are currently 550 golf courses in South America, almost half of which (264) are in Argentina, played by the country’s 48,300 registered golfers. Brazil is the next largest golfing nation, having experienced a boom in the past 10 years, with the number of players growing from 7,000 to 25,000, and the number of courses doubling to 107.
There are approximately 120,000 golfers in South America, out of a population of 380 million, which represents a low participation rate (just three golfers per 10,000 people) – but the numbers are growing significantly and the potential for acceleration is high, says KPMG.
Other findings from the South America regional report include:
• More than 30 new golf course projects are either under construction or in an advanced planning phase in Brazil.
• Golf clubs in South America have a relatively high share of female members (25 percent). The experience of Austria, Germany, the Netherlands and the Scandinavian countries shows that growing numbers of female (and junior) golfers can be one of the key drivers for the explosion of demand and development of new golf courses.
• The average annual membership fee for an 18-hole golf courses in South America is USD $1,349, with an initiation (joining) fee of USD $2,108.
• The average number of members at South American 18-hole golf clubs is 550.
• The average number of rounds played at 18-hole courses in South America – approximately 13,500 – is relatively low compared to other surveyed regions with similarly favorable climates including Western Europe (27,000), the Southeast Mediterranean (18,800) and the Caribbean (20,000). However, the top 20 percent performers in South America averaged 26,600 rounds with some courses reaching 30,000-35,000 rounds.
• The average green fee for one round at an 18-hole course is USD $40 on weekdays and USD $52 at weekends – less than half the price of the Caribbean, significantly lower than in Spain and Portugal, but higher than in South Africa and India. Brazil is the most expensive country with weekend green fees in the USD $75-$100 range, while green fees in Argentina are low and often below USD $30.
• Average revenues for 18-hole golf courses in South America are approximately USD $1.2 million, although top performing golf courses achieve revenues of more than three times this figure.
“The low number of courses in certain countries of South America, combined with the large population base of most countries, high growth economies, tourism attractiveness and favorable climate, are reasons that support our very positive outlook for the development of both golf course supply and demand, from both locals and international tourists, in the continent in the coming decades,” adds Sartori.
The comparative Golf Benchmark Survey report for EMA and the three new regional reports for China, North Africa and South America, are the culmination of a number of research projects published this year as part of the Golf Benchmark initiative, including the ‘Golf Travel Insight’ report and ‘The Golf Course Development Cost Survey’. In addition, KPMG published ‘The Value of Golf to Europe, the Middle East and Africa’, in cooperation with Oxford Economics. All the reports are available as free downloads at www.golfbenchmark.com.