2005: Business - Plotting a New Course

Prague, Czech Republic

With the Old Course at St. Andrews taking center stage at last week’s British Open, scores of golfers around the world are likely daydreaming about making a pilgrimage to the game’s mecca.

But within a decade, perhaps even sooner, the menu of golf destinations in Europe is bound to expand far beyond Scotland, or Ireland, and even today’s trendy locales such as Portugal and Austria.

The future of European golf tourism could lie behind what once was the Iron Curtain.

Golf in Croatia? The Czech Republic? Slovenia? Slovakia?

You better believe it, say a host of golf architects, developers, consultants, tourism executives and government officials – all of whom have been monitoring golf’s growth in Eastern Europe. They all have vested interests, too, but their bullish outlook is based on recent economic trends, the region’s natural resources and the game’s growing global appeal.

Eager to dispose the vestiges of Communist rule, Eastern European nations are intent on improving their fortune. And they’re counting on tourism – including golf to varying degrees – as a major engine to drive their economies.

Though few countries in the region, if any, have crafted a so-called master plan for golf, they’re taking steps to incubate the game. Governments are offering grants to subsidize golf resort construction. Municipalities are changing zoning laws to facilitate course development. And many tourism officials are beginning to collaborate to promote golf within broader visitor campaigns. Such activity, not surprisingly, also is attracting developers and investors in search of golf’s next hot spot.

These factors, combined with the sport’s grass-roots growth, lead to a significant forecast: Eastern Europe’s registered population of golfers is 26,000 and is expected to increase fivefold to 134,000 by 2013, according to a recent report by consulting giant KPMG. More important from a tourism perspective, the number of courses in the region is expected to triple to roughly 320 within the next decade.

“And we are always quite conservative,” says Andrea Sartori, a KPMG partner who heads the firm’s travel, leisure and tourism group for Central and Eastern Europe. In July, his division hosted a global business summit evaluating the region’s prospects as a golf market.

But the “build-it-and-they-will-come” approach does not include a guarantee. Eastern Europe’s potential as a vibrant golf destination is tied to countless variables. Some experts question whether limited experience in golf will handicap efforts to build and operate “must-play” courses that are essential for drawing players from afar. And if a healthy, indigenous participation base fails to materialize, will the region become nothing more than a graveyard for cash-strapped courses?

Though growing pains will be inevitable, many who are studying the market remain confident in Eastern Europe’s potential.

“The numbers of (golfers and courses) are still quite small, but you have to remember that the region was under the yolk of communism,” says Paul Dellanzo, vice president of European operations for Troon Golf, which has opened an office in Lugano, Switzerland. “But we’re going to be very actively involved in Europe, and I think you’ll see something built with a major signature name near Prague in the next three to four years. I know of one already, but can’t really talk about it because we hope to be involved with it.”

Dellanzo insists quality, not quantity, will determine how quickly Eastern Europe comes on line as a golf destination.

No one is suggesting that the region will threaten Great Britain’s spot in the hierarchy of golf tourism. But experts, including Dellanzo, say it would take only a handful of must-play courses to elevate a city such as Prague – rich with historical and cultural wonders – into a viable market.

“For the golf cognoscenti . . . they’re looking for great golf courses,” he says. “And if you’re coming all the way from the States, you’re not coming just for a long weekend. I would say you need three to five (courses) around Prague and that would start to catch people’s attention.”

Dellanzo expects development to intensify, but not because of the region’s budding romance with the game.

“Why is golf coming to Prague? The reason is the cost per square meter,” he says. “The cost is much, much lower than another capital city in Europe, probably still one-third less. It’s not about the golf. It’s a great emerging market for an investment.”

The region’s governments have their own reasons for supporting the growth of golf.

Reveling in a tourism boom that’s growing 19 percent annually, the Czech Republic attracted 8 million visitors a year ago. But to its dismay, more than half of these tourists stayed only in Prague, failing to spend any money in the rest of the nation. By comparison, only 19 percent of Austria’s tourists limited themselves to its capital, Vienna, according to Marketa Svatonova, an adviser with the Czech Republic’s Ministry for Regional Development.

To better distribute tourists’ dollars, the ministry has a remedy: Build courses to draw visitors to the country’s beautiful countryside. Though Svatonova couldn’t provide specific details, she says the Czech government already has allocated “structural funds” to help develop “several” golf projects.

Svatonova concedes there’s still much more work to do.

“Our main countries for tourism are Germany, Slovakia and Great Britain, (from which) we had incredible growth last year, but unfortunately, it was not caused by golf tourism,” she says. “It seems that our beer is still more attractive.”

KPMG’s Sartori advises U.S. golfers to view the entire region, rather than individual countries, as a golf destination.

“Jointly, and I underline the word jointly, countries like Slovakia, Hungary and the Czech Republic, can appeal to people who are coming from faraway destinations such as the U.S. or Japan,” he says.

If a golf traveler’s itinerary today included two or three of the region’s bigger cities, Sartori says, “he would be able to play six or seven very high-quality courses during a week’s stay.” Long term, however, when experts are asked which country holds the most promise, they answer unanimously: Croatia.

“It has so much potential because of its natural assets, including a marvelous coastline,” Sartori says. “And in South Croatia, you can have close to 340, if not 350, playable days (annually) because of favorable climatic conditions.

“It’s our Florida.”

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