Is Scottish golf getting a bit buggy?

Is the game’s traditional home losing its primacy as players reject high prices and dreary weather?

Ian Fraser, Camagonline, May 2008

It may be the home of golf, but factors such as cost, weather and old-fashioned attitudes are leading some to turn to warmer climes such as Dubai, South Africa and even China. Still, major investment is under way to create more top quality golf resorts in Scotland

A recent survey about the future of golf tourism must have made uncomfortable reading for anyone involved with it in Scotland. The survey, which sought the views of 120 golf course architects and tour operators around the world, found that Turkey, Dubai and South Africa are likely to be among the most popular destinations for golfers in the future.

Conducted by KPMG Golf Advisory Services last year, the survey also found that the top destinations for golf and other sporting pursuits are currently Spain, Portugal and North America. Andrea Sartori, of KPMG Golf Advisory Services, said: “The traditional golf markets of Europe and North America can expect increasing competition from the emerging golf destinations that offer high quality golfing experiences at more affordable prices.”

If this survey is correct, Scottish golf tourism is facing some interesting challenges. The country may be the “home of golf”, but this is no longer enough to bring the world’s golfers flocking to our shores.

This became plain from another survey conducted by Scottish Enterprise some years ago. This found that the phrase “home of golf” had negative vibes for some prospective visitors. Some Dutch and German golfers said the phrase made Scotland seem “a bit stuffy”, “a bit expensive”, and “a bit old-fashioned” as a golfing destination. “Some said they wouldn’t dare play here as they feared the inadequacy of their game might make them a laughing stock,” said Mike Williamson, director of Edinburgh-based golf consultancy MW Associates.

The world’s most affluent golfers – those with polished swings, low handicaps and who are prepared to fork out £160 plus for the privilege of playing on some of Scotland’s finest links (traditional sandy courses on dunes near the coast) – will probably continue to brave Scotland’s relative costs and unpredictable weather.

However there is a danger that mid-range golfers will drift away to much cheaper destinations that enjoy better weather. Indeed, with data on the value of golf tourism to Scotland’s economy notoriously unreliable (it varies from £100m per year to £300m a year depending who you listen to) there are signs this already may be happening.

Williamson says there are very few countries that have not set themselves up as golf tourism destinations – and many provide better value, better quality accommodation, and much better weather than Scotland.

He says: “Scotland has often been seen as resting on its laurels. The competition has really intensified. What we need to do is ensure we have got the product, the services and the marketing right. We need a joined-up effort, we need the public sector and the private sector to put their resources together.”

He adds: “People need to have a very good reason to come to play golf in Scotland – and one of those is undoubtedly the quality and number of our links courses.”

There are only 170 such courses in the world and more than half are in Scotland. Williamson says the very best, such as the St Andrews Old Course, Royal Troon, Muirfield, Turnberry, Carnoustie and Royal Dornoch, have little trouble in attracting golfers from all over the world and particularly from the US. However after an ill-judged spate of golf course construction during the 1980s, some of the 700 or so standard courses in Scotland are likely to suffer – especially since member numbers are declining.

Neither the uncertainty of Scotland’s once pivotal position, nor the gloomy economic outlook, have deterred a number of entrepreneurs and private equity players from betting billions on the future of Scottish golf. In recent years several state-of-theart course have opened in Scotland, including the Kingsbarns Golf Links near St Andrews and the two courses at St Andrews Bay (now called the Fairmont). De Vere Hotels has spent millions on a new course on the banks of Loch Lomond.

In addition, 13 new courses are under development around Scotland at a total cost of £250m, according an article titled “Scotland’s golf boom” recently published in Bunkered magazine. This will take the total number of courses in Scotland up to 570, cementing its position as the country with the most courses per head in the world.

The most prominent and controversial plan is that of the bouffant-haired New Yorker Donald Trump for a new linksstyle course and development of 1,450 homes at Menie, Aberdeenshire. For the time being at least these have landed in the rough, partly due to opposition from conservationists. (The proposed development, which “the Donald” modestly proposes to call Trump International, is to go on a site of special scientific interest).

The controversy surrounding Trump’s proposals has obscured the fact that several other world class golf courses are under development in Scotland. The Australian businessman Brian Keating, who made his money as a dotcom businessman, is investing £30m in a links course at Machrihanish near the Mull of Kintyre, in partnership with Boston-based Southworth Development.

“This is nothing like the Trump project,” says Keating. “For a start it is primarily about golf. It will have 32 holiday houses situated next to the existing Machrihanish course and a further 30 timeshares. What Trump is proposing appears to be a small town of some 1,500 houses that happen to have a golf course attached.”

Keating is confident that, despite the geographic remoteness of Machrihanish (it is a three hour drive from Glasgow at the end of a long peninsula), the economics of his planned course stack up. He believes it makes much more commercial sense to build a state-of-the-art links course rather than to go for yet another parkland course – of which he believes there are already too many. “There are 33,000 parkland courses in the world but only 170 links courses,” he says.

Mark Parsinen, the American who was behind the Kingsbarns links course near St Andrews, is also involved in a 36-hole development at Castle Stuart, between Inverness and Nairn. The project will include 148 lodges and is being led by Parsinen’s Cornerstone Golf, with backing from Paul and Erik Olson of EPO Development & Construction and Dan Reiner, owner of Pebble Beach and a shareholder in ClubCorp.

Another project is nearing completion near St Andrews. Like Machrihanish Dunes, the Castle Course has been designed by David McLay Kidd of Essex-based golf course designers DMK. The course, due to open this summer, is being developed by the St Andrews Links Trust, which operates the Old Course.

In addition, the Renaissance Club is nearing completion at Archerfield in East Lothian. It will feature an 18-hole course designed by the US golf course architect Tom Doak of Renaissance Golf Design, and will also be accompanied by a resort and spa. Other schemes include FM Developments’ planned golf course at Ury House in Aberdeenshire (also to be accompanied by a spa, beauty and fitness facilities) the Muir Group’s proposed redevelopment of Blairs College, a former Catholic seminary in Kincardineshire.

However Keating points out that, of the courses under construction in Scotland, only Castle Stuart and Machrihanish Dunes are “true” links courses, though he says the Castle at St Andrews “will play like a links”.

To Keating, links courses are both the past and the future of golf. “They are the original game, the real game.” To him, they are almost the crown jewels of golf, and the sort of thing that will continue to command a premium and to act as a magnet for discerning golfers in an increasingly crowded market.

Nor is Keating worried about any slowdown caused by the economic downturn or the sub-prime crisis. “This is a 20-year business plan,” he says. “I am more concerned about currency differentials than the effects of the sub-prime mortgages.”

With US golf declining (partly because younger people cannot bear to be parted from their BlackBerries for the four hours or so it takes to play 18 holes), Scotland’s golf community is divided about the future of the US market.

Keating has no intention of being too dependent on US visitors. He predicts half the players at Machrihanish Dunes – where a round is slated to cost £89 – will come from elsewhere in Scotland, with 20 per cent from Scandinavia and only 5 per cent from the US.

Stephen Walker, sales and marketing director at Turnberry, says that earlier this decade the Starwood-owned resort got its fingers burnt as a result of being too dependent on US visitors.

He says: “After 9/11 we were forced to do many things differently. Now, we have a thriving domestic market year-round with other feeder markets like Sweden and Ireland making a significant revenue contribution. The development of Prestwick as a Ryanair hub has helped us hugely.”

Williamson said there is an ongoing debate among Scottish golf tour operators about whether it is preferable to target the US or emerging markets such as China and India. “US golfers are bigger spenders, but they tend to be very focused on a small number of traditional links courses – the Old Course, Turnberry, Troon, Muirfield, Cruden Bay, Carnoustie, Dornoch. Some people would say that market looks after itself. There’s also a view that with the US market you get a downturn whenever there’s a terrorist attack or the dollar falls.”

It is therefore perhaps unsurprising that some industry players are keener to woo prospective golfers from emerging markets. Angus Council, for example, has been trying to ensure that Carnoustie Country is seen as a leading golfing brand in China. Steps taken by the council include twinning Carnoustie links with Tiger Beach course in China’s Shandong Province and its sister course Shanghai Silport. “The link means Carnoustie is featured at least twice per year in every major golf publication there,” says Councillor David May, who went on a recent delegation to Shanghai. “The value of this alone would reach a six figure sum.”

However, Keating acknowledges that, in a marketing sense at least, the Irish have the upper hand over the Scots when it comes to promoting golf tourism. “I think the Irish have taken the lead on that kind of thing.” he says.

Ireland seized the marketing initiative thanks to a spate of exciting new courses which opened there in recent years. These include the impressive Greg Norman-designed Doonbeg course in County Clare, which has the advantage of being near Shannon International Airport. Ireland is also seen as having had a shot in the arm from hosting the Ryder Cup in 2006. “New projects along these lines give a country the initiative, generate excitement and are sure to get editorial coverage in the US,” said Keating.

However Keating is optimistic that the SNP government will improve Scotland’s performance where marketing and communications of golfing holidays are concerned. “Tourism Minister Jim Mather is very receptive” said Keating. “He is the new sheriff in town and he is talking a different game [to former First Minister Jack McConnell] in relation to golf.”

Williamson also believes there is a new mood at public sector bodies such as EventScotland and VisitScotland. “The impression I get now is that VisitScotland is more willing to listen than it has been for some years,” he says.

Another area of debate is whether hosting the Ryder Cup in 2014 will bring any lasting benefits to Scotland’s position.

Turnberry’s Walker says: “From my perspective the Ryder Cup coming to Scotland is a good thing.” However Williamson says: “I suspect that there is an awful lot of hype about the Ryder Cup.”

He believes the British Open, which is due to come to Scotland in 2009 (Turnberry) and in 2010 (St Andrews) is much more important in economic terms.

“I think we should be making more of the Open championship,” says Williamson. “There may be some reasons for bringing the Ryder Cup here but it is very short-lived, very focused and has very few beneficiaries.”

The recently founded organisation Golf Tourism Scotland has argued that a proportion of the millions of taxpayers’ money being invested in the hosting of the Ryder Cup would have been more productively spent in supporting and promoting golf in Scotland “before, during and after 2014”.

Williamson also points to the importance of not neglecting the “value” end of the golf tourism. He recently helped to develop a new product called “First in Fife” which offers three rounds of golf for £59 or five rounds for £92 on a choice of twelve 18-hole courses in the Kingdom of Fife, including Aberdour, Kirkcaldy and Burntisland. “In volume terms. that is a very important part of the market,” says Williamson adding that value packages like these have strong appeal to groups of golfing visitors from English cities such as Newcastle.

However, the biggest conundrum for Scottish golf is this. With the world on the brink of major economic slowdown and with other, cheaper destinations increasingly stealing Scotland’s thunder as a world class golfing destination, how long will it take the investors who are injecting £250m into 13 new layouts to see a return on their investment?