China’s new rich go for golf
Page last updated at 9:00 am, Wednesday, December 24th, 2003
By Mary Hennock, BBC News Online business reporter in Guangzhou, China
This story was published in the Academex newsletter for the Club Industry, firstname.lastname@example.org
China will soon boast the world’s biggest golf club. Mission Hills, perched on the Hong Kong border, is transforming itself into a 10-course, 180 hole mega club.
Golf is seen as wealthy pastime. Most non-golfers are puzzled at the appeal of a sport often played in tartan trousers and pastel-coloured sweaters.
But makers of those garments have every reason to smile. Golf is taking off in China, the world’s most populous country, where its appeal rests on its image as a sport for corporate achievers.
“China is the biggest market for golf course development right now,” says Mark Adams, in charge of course building in Asia for sports event giant IMG, where he is a senior vice-president.
Board room image
A roster of world class players have designed courses in China, including Colin Montgomerie, Nick Faldo and Ernie Els. Many courses include villas and hotels.
China is also beginning to produce top professionals, like Zhang Lianwei, who beat Ernie Els on the last hole of the 2003 Calpex Singapore Masters and once saw off seven-times European No.1 Colin Montgomerie. “For Chinese white-collar people it is very important to play golf because it means you‘re rich,” says Domenico Palumbo, business development manager at swanky Luhu Golf & Country Club in the southern city of Guangzhou.
Being rich is essential to join Mission Hills, where individual membership costs from US$315,000, though the club thoughtfully offers loan finance. Luhu is so exclusive that memberships were sold out before it opened in 1996. Members trade them privately.
But China’s new middle class is keen to play. “It’s just starting to really take hold and become more of a popular pastime,” says Ian Stirling, client manager at IMG’s Asian Golf Division.
Golf was not always acceptable to China’s ruling Communist Party, which ran media campaigns against it to discourage officials from bunking off work on public funds. “What you‘re seeing is the first wave of mainland Chinese” says Mark Adams. “It’s a game that consumes a lot of time and money to play,” explains Mr Stirling. As a result, golf was limited to expatriate business people, middle class Hong Kongers and holidaying Asian millionaires.
China remains a golfing newcomer compared to Asian nations with much smaller populations like South Korea, Thailand or Japan. China has only 198 courses nationwide – about 60 of them under construction – and 30,000 club members, according to China Golf Association (CGA) figures.
But many observers think there are closer to 100,000 players if weekend club memberships and driving range rentals are included. TV golf highlights can pull in up to three million viewers.
Even now, about 70% of China’s golf courses are in Guangdong province, bordering Hong Kong.
Driving range day trippers
But the balance is shifting, geographically and socially. New clubs are springing up around other wealthy cities, particularly Beijing, and Shanghai. Golf remains a sport for the rich, but it is no longer confined to the super-rich.
Golf is popular for corporate hospitality “What you‘re seeing is the first wave of mainland Chinese, that’s the key to the whole success of this wave of projects,” says Mr Adams.
The traditional view of golf was that “If you have to ask (how much), you can‘t afford it,” says Mr Palumbo. At Luhu, even life members must fork out fees every time they play – caddy fees, buggy fees, monthly fees and a daily fee. And joining for the weekend costs 1,380 yuan (US$166).
But there are cheaper options. Guangzhou city official Francis goes to a development zone an hour’s drive away, where one day’s play costs 200 yuan. Cheapest of all is hiring a bucket of balls for an hour on the driving range. Even Luhu offers that for 30 yuan. It is a popular choice. “They want to be able to hit the ball. They may never have the chance to play on a course,” says Luhu course superintendent Keith Pegg.
Cars and country clubs
Guangdong’s oversupplied market is forcing many clubs to drop their prices, says Spencer Robinson, publisher of Asian Golf Monthly. “Developers thought that building golf courses was a licence to print money; they have been very badly burned,” he says.
Golf is set to expand in China as urban living standards improve. “Automobiles seem to be the first thing that mainland Chinese are aspiring to make as their first big purchase, and owning their own flat,” says Mr Stirling.
With private car ownership growing fast, many new drivers are heading straight to their nearest golf course. “This is where you‘re going to find an absolutely pristine environment. The grass is green, there’s no pollution,” says Mr Pegg.
China suffers serious shortages of agricultural land and, in some provinces, water. But developers do not fear an official backlash against golf for these reasons. “They‘ve seen it as a viable business…this is revenue stream for the government,” says Mr Stirling.
Companies are increasingly willing to sponsor golf too, raising prospects of more tournaments and a better professional circuit. China’s biggest domestic mobile phone maker TCL put its name to a new tournament last year.
With prize money of $1m, the TCL Open – which was won by Colin Montgomerie – is now the most lucrative tournament on the Asian PGA circuit, worth 10% of total winnings.
“The potential for expansion is enormous, we‘re exploring all sorts of opportunities,” says Simon Wilson, a spokesman for the Asian Professional Golfers Association.