Country Snapshot Spain Golf Supply and Demand Trends

Country Snapshot

Spain

KPMG Golf Advisory Practice in EMEA

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. GOLFBENCHMARK.com The KPMG name and logo are registered trademarks or trademarks of KPMG International. © 2015 KPMG Hungária/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. 2 Country Snapshot Spain Golf supply and demand trends

Golf was first introduced in Spain in 1891 when a Overview Spain Europe group of British nationals living in the Canary Islands founded the Real Club de Golf Las Palmas. Since then, Number of golf courses 349 6,924 golf has grown and expanded throughout Spain. Today, Number of registered golfers 270,463 4,186,116 the country has 349 golf courses and 270,463 players affiliated to the Royal Spanish Golf Federation. Average golfers per course 775 605 Average golf participation rates 0.58% 0.92%

Source: European golf associations with KPMG elaboration

Change in supply and demand State of participation of registered golfers in Spain, 2015-2017 in Spain, 2010-2017 290,000

Supply 285,000 (+4 golf 280,000 courses) +1% 275,000 270,000 Demand Registered golfersRegistered 265,000 (-61,070 -18% golfers) 260,000

Source: Royal Spanish Golf Federation with KPMG elaboration Source: Royal Spanish Golf Federation with KPMG elaboration

Number of golf courses by region France

Asturias Cantabria P. Vasco Galicia Navarre

La Rioja

Cataluña Castilla y León Aragon

Portugal Madrid

C. Valenciana Castilla-La Mancha Extremadura I. Baleares

Murcia

I. Canarias Andalucía

Algeria Morocco • Cueta Melilla Source: KPMG research

© 2018 KPMG Advisory Ltd., 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. 3 Country Snapshot Spain

Supply Distribution of golf courses in Spain by size, 2017 Over the past seven years, the Spanish golf market has been 9 18 stable in terms of golf course 27+ supply. Since 2010, there has been a net increase of four new golf 24% facilities or +1%. In 2017, the Royal 13% Spanish Golf Federation tallied a total of 349 golf clubs. 63% The majority of golf clubs in Spain consist of 18-hole courses, representing 63% of the total supply. Nine-hole golf clubs, and 27-hole or larger clubs, represent 24% and 13% of total supply respectively. 221 18-hole equivalents 349 Golf courses

Source: Royal Spanish Golf Federation with KPMG elaboration

Demand Distribution of registered golfers in Spain, 2017 Based on our research, the distribution of registered golfers in Spain has seen a slight decline in recent years. Golf is dominated by adult-males (63%), females account for 24%, and junior participation is at 13%. With, more than 34,000 registered junior players, Spain is ranked in the top five countries in terms of the total number of junior golfers in Europe.

Source: Royal Spanish Golf Federation with KPMG elaboration

Evolution of the Spanish golf market, 2010-2017 350,000 400 300,000 350 rs fe

250,000 300 s 200,000 250

course ered gol 150,000 200

100,000 150 Golf Regist 50,000 100 0 0 2010 2011 2012 2013 2014 2015 2016 2017

Golfers Source: Royal Spanish Golf Federatio n with KPMG elabor ation

What are the key trends shaping Based on our research, relationships in a crowded sport the state of the Spanish Industry? domestically Spain is looking marketplace. Therefore, golf clubs healthy, also it is in the top five and facilities have developed loyalty We can distinguish two key profiles countries in Europe in terms of schemes and implemented policies of potential players: under 16 total number of junior’s golfers. aimed at involving and acquiring new and over 30-35 years. The direct What can be done to encourage members. engagement in the game is only a female participation? 7% between ages 16-30. All our programmes (Golf in Schools, Almost one third of golfers in Spain Junior Academies, Friends Cup and Our programme Golf in Schools are women. We are satisfied with other campaigns) are being run as part takes place nationwide and is this figure. Our efforts have boosted of a web platform where each Regional supported by all local Federations. the percentage of new young golfers Federation as well as the National It has a double objective. On the under 16 years. Programmes like Federation (RFEG) can monitor how one hand, all children can discover Golf in Schools and also the TV the four programmes are working. the game at school in Physical show Holagolf, broadcast free-to air, Education classes, as a regulated has an exclusive section dedicated What are your thoughts about the subject. The second objective is that to female golf and it is creating a biggest opportunities to the golf children, who want to take their golf positive impact on women by making industry in the coming years? a step further, can sign up for free golf accessible and it seems to be introductory courses. The Golf Industry goes hand-in-hand increasing women’s participation. with tourism, both domestically and Finally, we promote a kind of internationally, so I think Spain, even Open Day initiative named Friends How do you see golf facilities if it is ranked top in Europe, still has Cup. Friends Cup is a non-official involving to accommodate a positive outlook about welcoming competition in which an active golfer costumer behavior? more tourists. We must remain can invite a friend, a non-player, to More and more golf clubs and vigilant in order to ensure that the the golf day. Twenty one per cent of facilities are aware of the need to product offered maintains the right those who try it, went on to take up adapt to the new times, the way standard. regular golf. of life of their customers and their

Picture: Centro Nacional de Golf, Madrid, Spain

For more than 40 years, Spain has In 2016, Spain was the third most 357,000 golf tourists) already present been established as one of the world’s visited country in the world. In in Spain, as the table indicates. The leading golf tourism destinations. terms of travel and tourism’s total most active golf travellers still come Spain’s success in achieving this contribution to annual GDP, Spain from the more affluent nations with position has been a result of the focus ranked amongst the top 10 countries long-standing golfing traditions, i.e. on tourism for the country, and its in the world. Taking a closer look Britain, France, Germany, Ireland, strengths as a destination: climatic at Spain’s source markets, we see and Scandinavia. Furthermore, the conditions which provide excellent that its top three tourism markets most preferred touristic golf facilities playing conditions throughout the year; (England, France and Germany) are located on the coastline in the relatively simple access and strong represent 71% of the nation’s overall region of Andalucía, Murcia, C. connectivity to the rest of Europe; arrivals in 2016. In order to broadly Valenciana and Cataluña, and on the and the development of clusters of assess demand potential, if we apply Islas Baleares. high quality golf, accommodation, and the golf participation rates in these supporting infrastructure and amenities source markets, there appears to be in strategic locations. an estimated demand (up to almost

Travel and tourism's total Tourism in Spain – estimated golf demand, 2016 contribution to GDP, 2016

Top 3 source Share Total Golf Potential Ranking Country (EURbn) markets of total arrivals participation arrival of 3 Germany 320.2 arrivals rate golfers 5 UK 240.7 1. England 31% 16,961,140 1.2% 205,230 6 France 188.1 2. France 20% 10,767,308 0.6% 67,834 8 Italy 176.5 3. Germany 20% 10,734,120 0.8% 83,726 9 Spain 150.6 Total of the top 3 71% 38,462,568 356,790 14 Turkey 74.8 Source: Spanish Tourism Organization, KPMG reasearch Note: Potential arrival of golfers based on numbers of arrivals 2016 EU average 51.1 World average 48.7

Source: World Travel & Tourism Council

Oslo 4h Major markets' Stockholm 4h 15min accessiblity by air The top four Spanish Edinburgh 3h 10min airports in terms of Copenhagen 3h 35min arrivals in 2017: Madrid, Dublin 2h 50min Barcelona, Palma de Berlin 3h 15min Mallorca and Malaga. London 2h 35min

Prague 3h 10min Paris 2h 20min Munich 2h 45min

Barcelona Madrid Lisbon 1h 05min

Palma de Mallorca Source: KPMG research Malaga

6 Coín 1 1 8 Istán Monda Málaga Alhaurín Alhaurín Benahavís 1 3 15 el Grande de la Torre • 8 Málaga Marbella Ojén Casares Estepona 3 1 12 Benalmádena Torremolinos 1 Marbella • Mijas Manilva Fuengirola 9

San Roque

Sotogrande

Gibraltar Total golf courses in Costa del Sol: 69

Source: KPMG research Costa del Sol

Overview Supply characteristics Costa del Sol, located in Southern The supply of golf courses in Costa Andalucía, has an excellent climate del Sol is mainly concentrated in with year-round playability, as the central-southern part of the well as a strong tourism demand, region, where 35 golf courses and offers a wide range of are located, or 35% of the total alternatives to play golf with almost supply. Marbella hosts the highest 70 facilities. “Costa del Golf” number of golf facilities, followed represents one of the biggest by Mijas, San Roque, Estepona golf clusters in Europe and hosts and Benahavis. Fifty-two per cent some of the most recognized and of the golf clubs are semi-private, prestigious venues in Europe. 31% are members clubs with restricted tee times for visitors, and the remaining 17% operate alongside hotels.

Demand characteristics Green fees: Costa del Sol – Average green fees (EUR) Research conducted by KPMG Almost all members clubs have shows, during the high season one published green fee price for (February – May and October – the whole year. Sufficient member Green fee Members Semi- November), the average green fee rounds combined with high demand club private in semi-private clubs is EUR 89, from guests enables those clubs High season 244 89 while the average green fee during which do change green fee pricing low season (June – September and each season to only make subtle Low season 233 65 December – January) is EUR 65. adjustments, by as little as EUR 11 in some cases. Source: KPMG research

What are the key trends shaping Based on our research, How do you see golf facilities the state of the Costa del Sol domestically Spain is looking evolving to accommodate Industry? healthy, also it is in the top five customer behavior? countries in Europe in terms of The key priorities for the promotion We are accommodating customer total number of junior golfers. of this destination are strategic and behavior need patterns and constantly What can be done to encourage centered on specific source markets: improving, adapting and innovating. female participation? UK, Germany, Scandinavia, France, The satisfaction surrounding golf on Ireland, Belgium, The Netherlands A lot can be done and that is one of the Costa del Sol is extremely high. and Switzerland. There is another our main strategies for this year and Another thing which stands out, is grouping of markets, which are high- for the coming years. A very high the tradition we have in golf, not only end clients coming from the United percentage of women when travelling as a tourism destination but also States and the Middle East. accompanied, make the decision with regards to the sensitivity and about the destination which is visited. The Costa del Sol is the leading golf implication of the local industry and Hence, not only is the lady golfer destination in southern Europe. It has population towards golfers, even important in volume, it also important an excellent image in the global golf when the service supplier is a non- as far as their position as decision market and it offers real quality. golfer. It is so important to have a golf maker. culture that goes further than just the How important is golf for the As part of our strategy, we have been golf course and I think that here on tourism economy? What new supporting ladies’ golf via sponsorship the Costa del Sol that is the key. markets are built up to target new of the Andalucía Costa del Sol audiences? Spanish Open (LET) to reach out to What are your thoughts about the female golfers. biggest opportunities to the golf I would like to highlight how industry in the coming years? important golf is for the tourism When we refer to aiming at female economy and not only in figures golf; we would be aiming at Although we already have a very because the direct income from golf presenting the destination with all successful golf industry, which grows is EUR 760 million and indirectly the attributes which have special year on year, with very good results another EUR 660 million. importance for the female golfer. over 2017-2018, there are still massive For example we have an exceptional opportunities. I think in the golf We are talking about the range of wellness amenities, spa industry, in comparison to the hotel employment, directly and indirectly, centers and shopping facilities. These industry, there is a gap, and this gap is of 7,700 people. But even more factors have a great influence on the basically to do with e-commerce, and importantly, is the fact that we are a holiday experience and are just as revenue managements. destination, which has a year-round significant as golf. This can also be operation and golf tourism has quite Finally our biggest challenge is that said of gastronomy, wines and the a specific high season, which happily we are market leaders; we have an cultural environment. coincides with the low season for our excellent leading product but we traditional sand and beach tourism. The ladies can travel as a group, must continually strive for further as a couple or as a family. So, we excellence. Bear in mind that almost 90% of shouldn’t forget family packages in what we classify as high intensity which we include children. Women golf tourists, that is to say, those tend to have many family and work whose principal motivation is playing commitments which negatively affect golf, have an average stay of 12 days, their free time, so perhaps we should and a daily spend of almost EUR 150, be looking at promoting more short which is consistently higher than the games (9 holes). average visitor.

Did you know?

The firstRyder Cup in continental Catalunya Resort is ranked the #1 at Spanish masterpiece courses Europe was played in 1997 at Real course in Spain, #5 in Continental such as Club de Campo, RCG Club Valderrama, which is still Europe and named among the Guadalmina, RSG Neguri, RACE, ranked among the globe's top 50 World's Top 100. Rio Real, El Saler, and Aloha. golf courses and is considered one Real Club de Golf Sevilla hosted The Madrid Golf Federation of the best in Europe. the WGC-World Cup. developed the initiative Golf en los Finca Cortesin is recognized as colegios (“Golf in schools”) and Javier Arana (1905-1975) was one of the best resorts in Europe has seen the programme expand one of the founders of the Royal and was the venue of the Volvo to include 47 schools across the Spanish Golf Federation and he World Match Play Championship in community in 2016, with one is considered the most prolific 2009, 2011 and 2012. school recently building an artificial and perhaps most respected putting green on its campus. According to top100golfcourses. golf course architect of Spain. com, the Stadium Course at PGA His designs can be still enjoyed Future outlook

Spain is one of the traditional golf some schools and junior leagues, the 2017 Masters, and the 2017 markets that suffered from the which is helping to promote golf Andalucía Valderrama Masters global economic downturn when and increase participation in a which he also hosts. Jon Rahm, it hit Europe. The consequences broader segment. Golf instructors who was the number one golfer in affected the sport hard at the time are also playing an important role the World Amateur Golf Ranking and in the years after with a decline in the game’s development, e.g. for 60 weeks, is now one of the in the number of registered golfers the Royal Spanish Golf Federation young upcoming stars on the and some facilities being forced to is introducing new educational world stage. Jon reached a career close. programmes, which aim to support high-ranking (No.4 in the world) the industry by growing golf at age of 23 by winning the 2017 In recent years, the country is instructor numbers. Farmers Insurance Open (PGA enhancing its efforts to increase Tour), the 2017 Dubai Duty Free golf participation back to its On a global perspective, golf is Irish Open (European Tour) and the previous levels. Introducing receiving greater visibility in the 2017 DP World Tour Championship golf to juniors is one of the country thanks to the successful (European Tour) in Dubai. Jon initiatives aiming to ensure that performance of several Spanish finished in fourth place at the 2018 future generations will take up professional players on world tours Masters, chasing his first major and continue to play the sport. in recent years. Sergio Garcia is victory. Indeed, golf is now taught in a Spanish golf icon, who won

Picture: Aloha Golf Club, Marbella, Spain

What are the key trends shaping Based on our research, with how people live their lives. the state of the Spanish industry? domestically Spain is looking The Top Golf brand has been very healthy, and it is also in the top successful in attracting both families The local golf industry has lost a five countries in Europe in terms and youngsters into the game, while number of players affiliated to the of total number of junior golfers. it’s imperative that we continue Spanish Golf Federation over the last What can be done to encourage to look at new formats that make eight or nine years. On the other side female participation? golf fun for people of all ages, of things, though, tourism is growing such as nine or 12-hole events or across the whole of Spain, and this In order to grow the number of the new GolfSixes tournament on is something that will benefit the ladies playing the game, we need to the European Tour, which made a business model that we have at Finca make golf as attractive and inclusive successful debut last year. Cortesin. as possible, and this is particularly important when encouraging girls to What are your thoughts about the How important is golf for the take up the game. biggest opportunities to the golf tourism economy? What new There are a growing number of industry in the coming years? markets Finca Cortesin are built up initiatives aimed at increasing the to target new audiences? These are potentially exciting times number of lady golfers and we’re for golf in Spain. In total, Spain Golf in general is very important to always keen at Finca Cortesin attracted 80 million tourists in 2017 the tourism economy in Spain but it to get involved in new projects, and the numbers have been growing is particularly vital in the Costa del Sol such as the annual international steadily over the last four or five region, which has been targeting this women’s golf day which we will be years. Golf is a key part of tourism product for several years. We are still supporting again in June. here and continues to attract large working with our classic traditional numbers of overseas visitors but, markets, such as the UK, Germany and How do you see golf facilities from our point of view, it’s important Switzerland, but we are growing all evolving to accommodate customer that we differentiate from other the time in America and are working to behavior? golf markets and continue to offer attract new markets like Asia. Over the last decade, golf facilities a luxury golf experience that is have been forced to adapt to fit in exclusive to the area.

Picture: Finca Cortesin, Casares, Spain

KPMG Golf Advisory Practice in EMEA

About KPMG's Golf Advisory Practice KPMG’s Golf Advisory Practice has in-depth know-how In addition to the wide range of professional services we and experience of the business side of the golf industry. offer, our Practice is also involved in several other golf- related initiatives. We are the founder of the annual Golf Our experience across the golf resort industry is diverse Business Forum, the foremost golf industry conference and includes services to both existing and developing in Europe, Middle East and Africa (EMEA). Moreover, we integrated golf resorts. We have a clear understanding regularly produce high profile thought leadership content of the impact that a golf course can bring to a resort or a for the industry, including the Golf Benchmark Survey, residential community development. one of the largest golf research projects in the world. As Helping to maximize developers’ returns through the a result, we have accrued invaluable comparable data and integration of golf, real estate and hospitality functions is information from the sector. The beneficiaries of such one of our primary areas of focus. deep industry knowledge are our clients.

What can we do for you? KPMG Golf Advisory Practice involvement in the golf and golf tourism industry sector includes the following services: –– Market and financial feasibility study – assessing –– Transaction service – assisting in the sale of project sites, locations and markets in order to provide greenfield projects that are in the development phase comprehensive financial analysis to assess potential as well as existing golf courses and resorts through investment returns. the preparation of investment memoranda and the selection of potential buyers. –– Project conceptualization and investment planning – developing realistic and implementable concepts –– Operational review – assessing existing facilities with short, medium and long-term investment and market in order to provide strategies for profit planning. enhancement. –– Business plan – advising on the strategic direction for –– Supplier selection – assisting with the identification the realisation and delivery of project concepts from and selection of golf management companies, golf staffing to marketing and sales. course architects and master planners. –– Project management – managing and coordinating –– Other advisory services – economic impact the project from inception through planning, up until assessment of large events and developments, the start of construction. strategic advisory to government bodies and regulators. –– Valuation service – preparing asset and business valuations.

For further information about KPMG services, please contact:

Andrea Sartori Partner Global Head of Sport T: +36 1 887 7215 E: [email protected]

KPMG Golf Advisory Practice in EMEA Váci út 31 1134 Budapest Hungary

Please note that all Golf Benchmark reports can be downloaded free of charge at golfbenchmark.com

Cover Photo: Finca Cortesin, Casares, Spain

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. The KPMG name and logo are registered trademarks or trademarks of KPMG International. © 2018 KPMG Advisory Ltd., 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.