Boom or Bust? The State of Caribbean Golf Course Development

matthew-cohen
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If you’re a golfer and you’re looking to plan an incredible getaway this summer, odds are the Caribbean is near or at the top of your list. But have you ever planned a trip to the Caribbean before, and do you know anything about the state of golf in the region?

KPMG is one of the world’s leading professional services company, and has sponsored Phil Mickelson on Tour since 2008. They’re also one of the world’s leaders when it comes to golf industry research, and they’ve done extensive work on the state of golf in the Caribbean region.

There’s some compelling information in their 2015 study, which hopefully you’ll find interesting and informative as you plan your next golf vacation.

Caribbean Golf Course Development

In 2009, KPMG’s Golf Benchmark Survey identified 129 golf courses in the Caribbean region, excluding Costa Rica and Belize. Today, that number has decreased to 121 golf courses, a decline of 6 percent. 40% of the 121 courses can be found in the Dominican Republic and Puerto Rico.

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According to the study, the world economic crisis from 2008/2009 has had a direct correlation on the state of golf in the region, with several course closures. 29% of all golf courses in the region operate alongside a hotel, and 27% operate in conjunction with a residential real estate component.

It’s no secret that the Caribbean region relies heavily on the tourism industry, so it makes sense that as the world economy was poor, so was the tourism industry, and as a direct result the local golf industry. This next chart shows tourism’s contribution to a nation’s GDP – 5 of the top 10 countries are in the Caribbean.

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This chart is all you need to know about how important tourism is to the region – and by tourism that means your dollars and your vacations. So when the economy is bad and your wallet is lighter, less money is going to these small islands in the Caribbean.

OK – moving on from tourism. How about local participation? According to the study, it isn’t much. Bermuda has the highest localized participation rate, but that’s just a measly 3.86%. Here’s the full chart:

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When you couple this chart with the previous chart regarding tourism to GDP, it’s obvious that these countries are struggling to encourage regional golf participation. It doesn’t require a PhD to understand that golf will never be on the same level as baseball or soccer to locals.

Including local participation rates, the study highlights four main challenge areas for the golf industry:

1. Water Usage
2. Local Participation
3. Availability of Land
4. Tourist Dependency

Without going into great detail on all of these points, the land availability is the most interesting. Why? Because the economy goes up and down, but land is land. Meaning it can’t just appear out of thin air. And land in the Caribbean is scarce. Which mean’s there’s an issue of supply and demand, and there are limits on new developments.

The Future

OK – so where is the golf industry going in the region? Are we primed for a boom, or another bust?

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These numbers are encouraging. So far, this study has read all doom and gloom. But 30 prospects for new courses? Sounds like the economy has steadied enough for smart money to jump back into the pool so to speak.

Jack Nicklaus has the lone new course that opened up this year in the region – TPC at Baha Mar in Nassau, The Bahamas.

“The PGA TOUR is thrilled to expand the TPC Network’s brand presence into the Caribbean for the first time by partnering with Baha Mar’s visionary resort destination,” said Charlie Zink, PGA TOUR Co-Chief Operating Officer. “TPC at Baha Mar truly epitomizes the standard of excellence and tournament-hosting capabilities for which TPC courses are recognized worldwide.”

If Jack Nicklaus is pushing in his chips, that’s an extremely positive sign that the golf industry in the Caribbean is on the upswing.

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Conclusions

The KPMG study is loaded with lots of valuable information, and gives an incredible in-depth analysis of the state of golf in the Caribbean. We’ve only provided a glimpse of that insight throughout this article.

The study makes clear how dependent the region is on tourism, and the golf industry. An economic crisis slowed down the pace of golf course development, and consolidated the amount of courses in the region. But the study is clear that the industry is gearing up for an expansion, with many courses in various stages of development. The new Jack Nicklaus course alone is proof of that.

Hopefully you found all this information insightful and important. If you plan on taking a golf trip to the Caribbean – have fun!

Further Reading

1. Golf Courses in the Caribbean
2. KPMG’s Golf Benchmark 2015 Caribbean Golf Study
3. Jack Nicklaus Opens TPC Baha Mar
4. Hilton Hotels Caribbean Golf Packages