There has been an incredible amount of money invested in cricket’s Indian Premier League. This is great for the maturity of the Indian sports management and promotion industry. Finally domestic cricketers beyond the starting Indian 11 are getting paid decently. Their earnings are starting to match the earnings of India’s top golfers like Jeev Milkha Singh and Jyoti Randhawa who routinely have been pulling in an average of Rs 3-4 crore per year for the past 5-8 years.
However the Indian golf industry is about far more than the earnings of its top players through tournaments. Golf is a multi faceted industry encompassing real estate development, tourism facility development, tourism revenues as well as apparel, equipment and accessories.
While the Indian golf industry is in its infancy, signs point to a high growth phase. If all goes well we will see the golf industry in our country outstrip the size of the cricket industry within 5- 10 years.
Let us take a look forward at a mature golf economy – the United States. Recently, Stanford Research International, a highly reputed not for profit Research Company published a US Golf Economy Report based on 2005 figures. Check out the facts: The US golf economy directly was valued at US$ 76 billion and including indirect revenues it was worth US$ 195 billion.
The report confirmed that golf remains a very significant segment of the US economy. At $76 billion in 2005 direct revenues, the U.S. golf economy is larger than the motion picture and video industries industry. At $28 billion, revenues from golf facility operations exceed facility revenues from all professional and semi-professional spectator sports combined.
The report identified the financial contributions from the game’s core segments, including golf facility operations ($28 billion); golf course capital investment ($3.6 billion); golfer supplies ($6.1 billion); tournaments, golf associations, and endorsements ($1.7 billion); and charities ($3.5 billion). Also included is the impact on “enabled” industries, such as hospitality/tourism ($18 billion) and real estate ($15 billion).
These totals represent increases in the previous 5 years in each respective category, with the exception of a decline in golf course capital investment, a category that encompasses both existing facility capital investment and new golf course construction. The decline in this category was expected and reflects a slowing rate of golf course construction as part of the market’s correction to an oversupply of courses.
These numbers augur well for the development of the Indian golf economy. Even if India achieves only 1% of the size of the US golf economy it will be worth US$ 760 million or Rs 3000 crore approximately. This figure is not far fetched.
An average 18 hole championship golf course which occupies around 150 acres of land requires an investment of between Rs 25 – 50 crore and each such development usually is supported by the sale of 400 residential plots worth an average of Rs 1 crore and a 100 room hotel worth Rs 50 crore for a total of Rs 500 crore approximately in a typical full scale golf development. If there are 6 such developments created in India, the industry will generate the Rs 3000 crore figure.
So golf is not about hitting a white ball around a green course, it is about enhancing lifestyle, real estate values and tourism revenues. Countries are capitalizing on this industry at a furious pace. Current hot spots growing the world golf economy are the Caribbean, Eastern Europe and China. The Mission Hills Golf Resort in Shenzen near Hong Kong has built 12 courses and three five star hotels with an estimated investment of Rs 1500 crore and will generate an expected Rs 5000 crore in real estate sales and Rs 200 crore of tourism revenues annually.
Investment is flowing into golf through private developers, but governments have to recognize the potential of the industry and create policies that will promote and facilitate more such developments. We have just touched the tip of the iceberg in India so many years of swinging times ahead will follow.