1. Overview: Current market research on the Irish golf industry
Ian Duffy, FGS Partner,
Corporate Turnaround & Change Management

2. Background to research
Research undertaken during the summer of 2010.
FGS and Carr Golf Services, in conjunction with the GUI and the ILGU.
On-line survey to Ireland’s 433 golf courses.
This is the first comprehensive survey into the Irish golf industry.
The GUI has undertaken some research in the past. A similar survey was conducted in the late 90’s and more recently a survey relating specifically to membership.

3. Background to research
A total of 151 actual responses were received (or an effective response rate of approximately 35%).
All survey respondents details were confidential and broken down into regions for the purpose of analysis.
but it is a good response for the first time that research has been done in this area and hopefully this initiative starts a trend to make this happen.
There is little track record of formal cooperation between clubs in terms of sharing information, ideas etc.
Also, the response rate reflects the individuality of the sector, as there are not necessarily platforms/forums amongst clubs to share ideas on issues and little evidence of the industry working together.
Clubs need to cooperate rather than viewing themselves as competitors. There are regional examples of clubs working together but these examples are limited.

4. Introduction
Significant growth and investment in the industry over the last 15 years.
Excellent courses, facilities and standards with a wide range of availability and choice
Strong international reputation as desirable golfing destination
The good news
50 million golfers in the world. Certainly for the Americans and UK visitors Ireland is top two in terms of desireable destinations

5. Introduction However, the industry does face major challenges given:
Decline in golfing tourists
Debt levels
Falling memberships
Excess capacity
Increased costs
Fragmented industry

6. Golf industry in Ireland overview
One in every 25 people a golf club member and these figures (excludes casual golfers).
Golf industry in Ireland gives rise to the employment of approximately 8,000 persons (both full and part-time)
433 courses throughout the 32 counties (increase of c. 100 clubs over the last 15 years).
Where is this versus Europe/U.S.?? High penetration statistically compared to our American and European colleagues

7. Trends in the Number of Golf Clubs 1995-2009
Mostly proprierator- owned clubs account for most of the growth

8. Golf industry in Ireland overview
Golf club membership growth over the last 10 years was driven by increased;
Population
Disposable income
Profile of the sport.
Tax reliefs for hotel developments (and the expansion in the number of hotels and resorts in recent years) indirectly drove the number of golf courses.
Artificial is a major point. Investment and trophy driven rather than demand driven.

9. Golf industry in Ireland overview
‘Our golf product is among the best in the world and it is up to us to ensure that all is being done to fully promote what is on offer’.*
Major operation, structural and marketing issues that need to be resolved.
*Chair of Failte Ireland
Redmond O’Donoghue, Chairman of Failte Ireland said earlier this year.

10. Research findings The report can be broken down into the key areas of:
Running efficient golf club operations;
Under-utilisation in the Irish golfing industry;
Sustainability;
Representing the Industry and;
Marketing

11. Running efficient golf club operations
55.4% decreasing membership. ¼ flat. ¼ increase.
Swapping and settling down of membership in downturn
Increase maybe consolidation or multiple memberships.

12. Running efficient golf club operations
Breakdown by region.
Connacht took a hammering!
May be due to a cancellation of country memberships.
Could be because people living in Dublin / Leinster who had second memberships in the West have cancelled these memberships.
Other potential reasons could be emigration from Connacht being higher than other regions or a possible higher growth in unemployment.
Nobody immune!

13. Running efficient golf club operations
Higher number of clubs are serving the same pro-rata number of people/members.
The number of members per club in 2002 was 661 and in 2009 was 590. Significant fall there.
Number of Persons (1,000 of population) per Golf Club dropped from in 1996 to in 2009.
Reduction of over 10% in 7 years on no of members per club
No of persons down 3%

14. Trends in the Number of Golf Memberships (‘000), 1995-2009
Golf as a sport has become more popular
Ladies peaked 2005 and men peaked 2004.

15. Running efficient golf club operations
Based upon the data received, the estimated average cost of operating a golf club in 2009 was €990,000.
The equivalent figure in 1999 was €266,000 (in 2009 prices) which indicates that costs have risen by 270% in just over a decade.
This could be a combination of things, but most likely due to:
Increased costs
Maybe also higher standards as members/customers demand excellence in the golfing product.
The available facilities now versus 15 years ago show the higher cost of running a golf club.
This, in turn, indicates that today’s golf clubs require far more members to cover operating costs than in the past.

16. Running efficient golf club operations
Course maintenance is 40% of operating costs is largest cost centre.
Administration costs are 18% of operating costs.
Clubhouse operations are16% of operating Costs
There is significant scope for future saving by moving towards a model based around outsourcing.
Outsourcing can reduce costs by 30%.

17. Running efficient golf club operations
Broken down by region, Dublin course maintenance even higher.
Munster admin costs as a percentage seem to be significantly higher
Anecdotedly, this figure does not produce bottom line margin.

18. Running efficient golf club operations
Trends in the operating costs incurred over the past three years.
So have seen some reductions in costs 60% but nearly 30% saw increases

19. Under-utilisation in the Irish golfing industry
The Irish golfing industry has the capacity to support up to 23m rounds of golf in a given year.
Analysis shows that a maximum of 13.3m rounds were actually played in 2009 suggesting that the level of under-utilisation is close to 42%.
Ballpark figures. Main point is substantive.
This will undoubtedly exercise downward pressure on revenues and profitability going forward
As price of green fees and membership drops. Industry need to be careful here to avoid canalibilism

20. Under-utilisation in the Irish golfing industry
Oversupply of golf clubs range from 35% in Dublin to 53% in Leinster.
Industry needs to consider new and innovative approaches and solutions, including a programme of consolidation.
Within 1 hours drive of the K-club if I said there are 50 golf clubs you would say, wow, that is very high,
then if I said what if it was closer to 75 golf clubs you might say that’s incredible
well the actual answer is closer to 100 golf clubs.

21. Under-utilisation in the Irish golfing industry

22. Under-utilisation in the Irish golfing industry
C. 50% of all respondents reported rounds played had decreased over the last 3 years.
This downward trend was most pronounced in Connacht (71%) and Dublin (50%).
However, 40% of respondents in Munster reported that the number of rounds played had actually increased.
Decline of the Munster team playing more golf but then they go and beat Australia.

23. Under-utilisation in the Irish golfing industry
Rounds played increasing could be consolidation of memberships; better value for money.
Decreasing is less tourists; less corporates; less time.

24. Sustainability
Almost 27% of respondents reported that revenues had increased since 2007.
A further 17% reported that revenues remained unchanged.
Almost 57% of respondents reported that revenues had decreased.

25. Sustainability Green Fees account for 17% of all revenues nationwide.
Local authority-owned golf clubs Green Fees account for nearly 50% of revenues.
By contrast, Green Fees account for just 15% and 20% of all revenues in the case of member-owned and proprietor-owned golf clubs, respectively.
Not a substantial contributor to member owned clubs.
If you drop Green fee prices by 50% then you have to double the number of players to standstill.
Some of the speakers later will deal with this issue.

26. Sustainability
‘Membership’ fees (i.e. subscription and joining) account for less than 20% of total revenues for local authority-owned golf clubs.
Such fees contribute 65% and 27% of all revenues in the case of member-owned and proprietor-owned golf clubs, respectively.
Again with more pressure of membership subscriptions you can see the effect that this can have on membership clubs were 2/3rd of the income are subscriptions.

27. Sustainability
Food and Beverage and, to a lesser extent, the Pro Shop accounted for 35% of the revenues of proprietor-owned golf clubs.
In comparison with member-owned golf clubs (15%).
Suggest that proprietor-owned golf clubs have a greater focus on multiple sources of revenue.
It can be done!
For many clubs F&B is loss leader so actually distorts the figures and puts a further reliance on Subscriptions and Green fees.

28. Sustainability
Significant amount of debt in the Irish golf industry especially amongst newer clubs who would have made large capital investments in the last years.
The level of debt as a % of revenue in 2009 was greater than 100% for 1 in 5 respondents with the highest number of cases in Connacht at 31%.
This represents a clear challenge for industry not renowned for making profits.
Property play now redundant for short term

29. Sustainability
3 out of 4 golf clubs in Ireland made capital investments over the past 3 years.
The highest number of these was in Dublin, where almost 93% of all golf clubs incurred capital expenditure.
The vast majority of this (70%) was targeted at golf courses whereas 17% was applied to clubhouses.
Significant expenditure not necessarily matched by corresponding increase in revenue.

30. Marketing
Less than 2 in every 3 golf clubs had a strategic plan in place for 2009
40% of respondents did not have a Strategic Plan in place for 2009 whilst 80% did not have a Yield Management Strategy.
Sales and marketing accounts for just 1% of operating costs nationwide.
I think that 1% is Donnbeg. Buddi you might confirm that later.
For me, this highlights the amateurish approach in overall terms across the industry where well meaning but part time committees or in the case of proprietor-owend golf courses, people of little experience of maximising the revenue opportunities of the golf course leads to the current deficit of strategic planning and yield management strategies drive a significant.

31. Marketing
There is clearly a need for strategic planning in the golf industry.
Many golf clubs need help in developing a business turnaround plan that will addresses strategic deficiencies and operational ineffectiveness.
Of those golf clubs that did have a strategic plan, 64% of them saw their membership numbers increase.

32. Marketing
Golf clubs with increasing revenues in 2009 were more than twice as likely to employ a yield management strategy compared to golf clubs with decreasing revenues
Almost 31% of golf clubs with increasing revenues employ such a strategy
New approach to neighbours – Friend or Foe

33. Representing the Industry
Fragmented representation of the industry
Should we look at an umbrella body that could play a constructive role in presenting the industry’s view with regard to issues such as;
Bench-marking
Training
Co op and buying Power
Labour costs negotiations
Liaising with State agencies
Capacity and yield management
GUI,
ILGU
Golf Tour Operators
Club Secretaries
Club Managers
Green Keepers
PGA
and more

34. Conclusions Running efficient golf club operations;
Marty Carr of Carr Golf Services & Mark Nolan, the Dromoland Collection
Under-utilisation in the Irish golfing industry;
Buddy Darby (Kiawah Partners), Marty Carr
Sustainability;
Declan Taite (FGS) particular emphasis on debt restructuring and management
Representing the Industry and;
Marty Carr, Frank Bowen (GUI), Sinead Heraty (ILGU) and Keith McCormack (Failte Ireland)
Marketing/New Media/Online Sales
Buddy Darby (Kiawah Partners), Keith McCormack (Failte Ireland) and Mike Lasoulat (Golf Channel Solutions)

35. FGS team here today Ian Duffy
FGS Partner, Corporate Turnaround & Change Management
Dublin Office T:
Declan Taite
FGS Partner, Corporate Restructuring & Insolvency
Dublin Office T:

36. For further information about FGS visit our website:

37. Thank you
Registered to carry on audit work and authorised to carry on investment business by the Institute of Chartered Accountants in Ireland (ICAI). Chartered Accountants Ireland is the operating name of ICAI. FGS is a member of the RSM International network. The RSM International network is a network of independent accounting and consulting firms, each of which practice in their own right. The RSM International network is not itself a separate legal entity in any jurisdiction.