The recession is striking hard at the golf industry in Ireland and Scotland, where there are more courses per person than anywhere else in Europe.
Workers at Gleneagles, the five-star Scottish hotel set to host the 2014 Ryder Cup, have until today to take buyouts because of a slump in bookings, spokesman Simon Brown said. In Ireland, Dublin’s Luttrellstown Castle and Harbour Point, in the southern part of the country, have said they will close in 2009.
“Golf membership is one of those items that maybe comes under the spotlight in times of economic hardship,” said Colm Hannon, chief executive officer of Luttrellstown, where England soccer player David Beckham married his wife Victoria in 1999. “People are weighing up their priorities.”
Ireland’s economy is shrinking at a record pace amid a property slump, while Britain is facing a recession that may be the worst since World War II. Golf contributed about 4 billion euros ($5.1 billion) to the gross domestic product in the U.K. and Ireland in 2006, KPMG’s Golf Benchmark report shows.
That’s all changing as companies spend less on entertaining, said Andrea Sartori, author of the KPMG report.
“Corporate events like golf days, taking a client out for a round of golf, those kinds of activities will suffer,” said Sartori. “There will definitely be a cut.”
‘Taken a Knock’
Gleneagles, owned by Diageo Plc, the world’s biggest liquor producer, has three 18-hole golf courses, an equestrian center, shooting, fishing and a spa at its complex in Perthshire, about an hour’s drive north of Edinburgh.
It sent letters to its 700 employees on Jan. 27 asking them to look at voluntary severance, unpaid leave, reduced working hours or early retirement, Brown said by telephone.
“Like all hotels the corporate side of the business has taken a knock because corporates don’t have the money to spend,” Brown said. “We are in the fortunate position that we have a strong leisure market that is not so affected.”
The stakes are high for the club as it prepares for the Ryder Cup, the biannual match between the top U.S. and European professionals. The contest generated 143 million euros in revenue when held at the K Club in Ireland in 2006.
The K Club, 30 kilometers (18 miles) west of Dublin, says on its Web site that “2009 presents a whole new set of challenges for our guests and the K Club.”
Home of Golf
Britain and Ireland have about 3,000 regular courses and 1.5 million affiliated players. Scotland has more golf courses per capita than any other country in the world, with about 9,000 people for each of its 550 courses. Ireland is second in Europe, with one course for about every 14,000 people, according to data compiled by Golf Digest magazine.
Scotland, where golf started in the 15th century, is using the 250th anniversary of the birth of national poet Robert Burns to bolster tourist numbers, including golfers.
“Everybody knows times are tough,” Scottish First Minister Alex Salmond said at the Dalmahoy golf resort near Edinburgh on Feb. 4 in support of the campaign. “This is something we should have done earlier. I don’t think we are anywhere near saturation point as new markets open up.”
Scotland is also relying on the decline in the British currency to attract more tourists, he said. The pound has fallen 15 percent against the euro and 27 percent against the dollar in the past year.
The recession is already taking its toll on Luttrellstown, a five-star course on the grounds of a 15th century castle in north Dublin. It will shut on Dec. 31. Further south, Harbour Point golf club will close in May.
Cutting Prices
Dromoland Castle, a club in the west of Ireland set on 410 acres of land, has cut its green fees in half and is offering a mid-week round of golf and a steak dinner for 60 euros.
“We decided a year ago to get realistic with our pricing,” said Mark Nolan, its managing director. “It’s kept the clubhouse going.” Business from North American visitors is expected to be “substantially” lower in 2009 and 2010, he said.
It’s not only golf revenue that suffers when players desert clubs. Golf tourists spend an average of 250 euros a day on a week-long holiday, with a quarter of that spent on teeing off, and the rest on travel, accommodation and food, Sartori’s report shows. That turns golfing across Europe, the Middle East and Africa into a 53 billion-euro industry, the report shows.
One person who is still playing is Ron Kirby, the course architect who worked on Dromoland.
“There isn’t any new business, it’s cut right back,” said Kirby. “I’m playing more golf recently.”
(Source: Bloomberg)
