Golf courses in the Middle East outperform European counterparts by 300%

As World Number One Tiger Woods prepares to tee off in next week's Dubai Desert Classic, part of the European Tour's lucrative Desert Swing, the annual report by KPMG Golf Advisory Services in EMA (Europe, Middle East & Africa) found that revenues for 18-hole golf courses in the Middle East averaged $6.7m in 2006, 11% up on the previous year, and dwarfing the performance of courses in mature golf markets such as Great Britain and Ireland $1.3m, Spain $1.9m and Portugal $2.3m.

According to the Survey, golf course revenues in Dubai averaged close to $8.8m, generating Gross Operating Profits of $3.4m, more than anywhere in the EMA region.

Golf in the Gulf, however, is also the most expensive anywhere in the EMA region. While average initiation or joining fees at Middle East golf clubs are slightly less than the EMA average, annual membership subscription fees are more than double the average at $3,741. In Dubai, annual membership fees are approximately 7% higher than other parts of the Middle East.

Green fees in the Middle East are approximately twice the European average, with Dubai topping the charts as the most expensive, despite the weak rate of exchange of the US Dollar. An average 18-hole weekend green fee in Dubai costs $152 versus $111 elsewhere in the Middle East and $98 in Portugal, $95 in Turkey and $83 in Spain.

The demand for golf, however, continues to grow with the average membership size of courses in the Middle East increasing by 6-8%, although Great Britain and Ireland remains by far the largest market with 44.7% of all golf courses and 34.7% of registered players, compared to 0.3% and 0.4% respectively in the Middle East.

"Golf in the Middle East continues to drive forward, setting new and extraordinarily high standards for the international golf business," said Andrea Sartori, head of KPMG's Golf Advisory Services Team in EMA.

"The influx of expatriates from traditional golfing countries such as the UK, Ireland and Australia, and the interest of international golf tourists, continues to fuel the golf boom. Dubai, in particular, has led the way in positioning itself as a global destination for golf - and other parts of the UAE, where we expect to see the number of courses triple over the next few years, and the Middle East are beginning to follow suit."

Nearly 1,500 golf courses across the EMA region, including over 10 grass courses from the Middle East, submitted key data from 2006 results for the Golf Benchmark Survey, which is being supported by leading golf industry businesses Nicklaus Design, Toro, GPS Industries (GPSI), Leisurecorp and Troon Golf. The Survey is designed to help golf course owners and operators to compare their own business against high, average and low performers in their geographic markets.

One factor that makes golf courses in the Middle East stand out is the sheer volume of play, thanks to year-round availability. The Survey reveals that the total number of rounds played on 18-hole courses in the region is close to 42,000 per year, significantly higher than South Africa's 33,000 or the 30,000 in Great Britain and Ireland. Tellingly, the number of rounds played per playable day at 18-hole courses was exceptionally high - 117 on average, compared to 96 in South Africa, 93 in Portugal and 86 in Great Britain and Ireland.

Despite boasting more than ten times more staff than courses in Europe - on average there are 188 staff at golf courses in the Middle East - courses here return average profit margins of 32%, higher than anywhere in the EMA region.

"Golf in the Middle East continues to grow rapidly, and with Tiger Woods designing his first signature golf course in Dubai (Al Ruwaya), and the European Tour's recent announcements about the Dubai World Championship from 2009, plus The Race to Dubai, there will be further significant development," added Andrea Sartori.