Golf Resorts in the European Mediterranean Region

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Golf Resorts in the European Mediterranean Region KPMG GOLF ADVISORY PRACTICE IN EMA Golf Resorts in the European Mediterranean Region Current Trends and Future Outlook golfbenchmark.com Sponsors: Golf Resorts in the European Mediterranean Region 2 Current Trends and Future Outlook Golf Resorts in the European Mediterranean Region 3 Current Trends and Future Outlook Dear Reader, I am pleased to present the latest publication from KPMG Golf Advisory which covers the current trends and the future outlook of integrated golf resort development in the European Mediterranean region. Besides bringing socio-economic benefits to local communities, integrated golf resorts can create significant value for key stakeholders. Developers, investors, operators and residential real estate owners can all benefit. The success of this type of real estate development depends on a wide variety of factors including the overall concept, master planning, operating model, the quality of each component of the resort and the services and facilities offered Andrea Sartori to a targeted demand group. The right combination of these factors can result Partner, KPMG Advisory Ltd. in the memorable visitor experiences required to generate buyers’ interest and Head of KPMG’s Golf Advisory Practice investment return. in Europe, Middle East and Africa KPMG’s Golf Advisory Practice has been advising on the development of [email protected] integrated golf resorts in the Europe, Middle East and Africa (EMEA) region for the past 15 years. We have prepared this publication with the goal of providing readers with an overview of recent trends in the integrated golf resort market in the European Mediterranean region and also of the post-crisis situation in this potentially lucrative development segment. Since 2009 development activity has slowed down significantly in the European Mediterranean region compared to the boom experienced during the 90s and the first decade of the new millennium. However, some indicators suggest better prospects for new developments in emerging golf resort markets. We are also seeing the repositioning of existing resorts and the reconceptualization of projects which were previously halted due to economic restraints in the more established markets. Our experience has shown that developers looking to establish integrated golf resorts must have a full and deep understanding of the requirements of their respective target markets and in the post-crisis economy this is truer than ever. Consumers are ever more demanding and this must be reflected in how resorts are conceived and developed. I hope you find the results of our research interesting. If you require any further clarification or if you wish to discuss our findings, please feel free to contact the KPMG Golf Advisory Team or myself. Yours sincerely, Andrea Sartori Cover image: Monte Rei Golf & Country Club – Nicklaus Design © 2015 KPMG Tanácsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Golf Resorts in the European Mediterranean Region 4 Current Trends and Future Outlook Table of contents What is a resort? 5 Where are coastal golf resorts located in the European Mediterranean? 6 Golf tourism and the coastal integrated golf resort market 7 What are the key components of a coastal integrated golf resort? 8 Golf 10 Residential real estate 11 Hotels and rental units 13 Looking ahead 15 Conclusion 17 © 2015 KPMG Tanácsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Golf Resorts in the European Mediterranean Region 5 Current Trends and Future Outlook What is a resort? The definition of what constitutes a “resort” varies greatly: it can refer to How has the resort supply evolved? a single destination such as a large hotel in a coastal or ski area, or to a The history of golf resorts can decade, with one third of the geographic region or to a town that is, be traced back to the early 20th currently operating coastal golf in itself, a popular touristic destination. century, with the earliest resorts resort supply opening in the 10 In Resort Development1, a publication opening in France, Portugal and years up to 2000. Development of the Urban Land Institute, a resort is Spain. activity continued in the first decade of the new millennium, defined as: The development of golf resorts with an average of six resorts increased slowly up to 1980, • A real estate project that has been opening annually across the region. developed and planned by a master with, on average, 1 or 2 resorts developer; opening each year. These were Following the global economic predominantly in Spain, Portugal, crisis, development activities fell • A site which offers proximity and easy France and Italy. Development drastically. Between 2010 and access to significant natural, scenic, activities peaked in the 90s and 2014 an average of three resorts and recreational amenities that make into the first decade of the new per year opened, half as many as in the site attractive to visit; and millennium. During this time 70% each of the previous two decades. • The site includes accommodation of coastal integrated golf resorts 80% of these more recent projects and timeshare ownership options currently operating in the European opened in the four established and/or accommodation available Mediterranean region opened. markets (Spain, Portugal, France, largely to tourists, vacationers, The number of new openings Italy) and the majority of these weekend travelers, seasonal during the 90s tripled in openings were resurrected residents and/or owners or users comparison to the previous projects from the pre-crisis period. of units on site as second homes. Resorts can further be classified Openings of coastal integrated golf resorts by decade by their key components or activity 70 profiles (e.g. ski resorts, beach 6.1 per � Spain 5.8 per resorts, golf resorts, etc.) and by year � Portugal 60 year accommodation types (resort hotels, � Italy vacation ownership, etc.). � France s 50 In the context of this study we define rt � Turkey integrated golf resorts as follows: reso � Cyprus golf 40 • A planned development comprising ated � Croatia gr of one or more golf courses, te in 30 l hospitality facilities and / or ta as 1.7 per Co residential real estate for sale; and 20 year 3 per 1 per 0.8 per year • The resort’s components were year year planned and developed as part 10 0.1 per year of one mixed-use project. 0 The subjects of this study are Before 1960- 1970- 1980- 1990- 2000- 2010­ integrated golf resorts located within 1960 1969 1979 1989 1999 2009 2014 20 kilometers of the coast in European ~70% Mediterranean countries. Source: KPMG research 1 ­ Resort Development Second Edition, ULI Development Handbook Series © 2015 KPMG Tanácsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Golf Resorts in the European Mediterranean Region 6 Current Trends and Future Outlook Where are coastal golf resorts located in the European Mediterranean? Based on the European Golf Number of coastal integrated golf resorts by country Association (EGA) statistics, there are some 1,400 golf facilities in European 8 Mediterranean countries. Of these, 12 382 (i.e. 30%) are located within � Spain 20 km of the coast. These are made up 19 � Portugal of 212 standalone facilities (i.e. courses 73 � Italy 170 which are not directly associated � France with a hospitality facility or a residential resorts � Turkey real estate development) and 170 25 � facilities which we consider as being Other part of coastal integrated golf resorts. 33 The majority of European Source: KPMG research Note: Other includes Greece, Cyprus and Croatia Mediterranean coastal integrated golf resorts are located in Spain and Portugal. Although Portugal, geographically, does not belong to the European Mediterranean region, it is included as part of our survey, as it is a traditional golf holiday destination in competition with others in Southern Europe. Condado de Alhama Resort – Nicklaus Design © 2015 KPMG Tanácsadó Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( “KPMG International ”), a Swiss entity. All rights reserved. Golf Resorts in the European Mediterranean Region 7 Current Trends and Future Outlook Golf tourism and the coastal integrated golf resort market Globally, the golf tourism market is These destinations are mainly visited Top 10 golf tourism destinations growing. According to the 2014 IAGTO2 by tourists from the UK, Scandinavia globally3 Golf Tourism Report, global golf holiday and the German-speaking countries. sales grew by more than 20% from In addition to good climates, they offer Spain 2011 to 2013. an appealing golf tourism product, including many golf courses relatively Portugal According to KPMG’s Golf Travel close to each other and easy (and often Insights Survey (2013), the outlook low cost) air access from the main Ireland for golf tourism in the future remains feeder markets. Innovative sales and positive, with the vast majority of Scotland marketing strategies are also in place surveyed tour operators expecting to attract golfers and residential buyers. further growth in the short to mid term. Turkey Italy and France together account for It is also important to note that five USA approximately a quarter of coastal golf out of the top ten destinations named resorts in the region, but it appears that as most important globally by IAGTO Thailand many of the golfers in these resorts are golf tour operators are located in domestic tourists. the European Mediterranean region, France showing the significance of this region Turkey, with its impressive Belek Morocco on the global golf tourism map.
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