GOLF CLUBS BUSINESSES IN MALAYSIA - we have grown in numbers but sustainability is a question.

By Adeva Sangkuni #adevaspeaks 
Master Trainer/Business Strategiest/Writer/Blogger

Once known being the trendsetter of Lifestyle Tourism (Golf) in South East Asia, Malaysia has one big question to where and what will be the direction of golf in Malaysia after enjoying two decades of a large influx of foreign golfers into Malaysia.

Since 90’s, Malaysia has been the home for more than 200+ golf courses on both private and public courses the primary business model for gaining access to golf courses in Malaysia was intended to be solely through a membership product rather than on a 'daily fee" basis which is now categorized as Members Club and Proprietor Club respectively.

The Members clubs somehow survived and still surviving; thanks to their loyal members and waiting to be members lists of each club. Now the question is, which golf clubs in Malaysia are on the suicidal lists?

Marching through various turbulence of economic crisis and many others factors in Malaysia past 20 years, I must say some notable golf clubs managed to uphold their evident qualities and standards; reasons being owners of the clubs able to support the maintenance expenses and constantly funded their golf clubs standardization and image in the country.

New private golf clubs built over the past 20 years are not very private for the most part and the base definition of a "club", that is, an association of people sharing a common interest and enjoying the company of each other, has been largely forgotten.

How this happened and understanding the history of this product mutation is the subject of this paper. If it helps promote a better understanding and perhaps instigate conceptual change in our approach to creating a new golfing experience in Malaysia, we may be able to create properly segmented business models that are more sustainable for the future.

The Case Studies of Golf in Malaysia.

Before the 1990s golf in Malaysia was primarily a sport reserved for the colonial expatriates that inhabited the countries through foreign assignments that were there for either commercial or foreign service reasons. Some notable golf clubs which has been standing tall past 40-50years are mostly members based golf clubs; to name a few are Royal Selangor Golf Club, Kelab Rahman Putra, Johor Country Club, Bukit Jambul Golf Club, Batu Pahat Golf Club, Kluang Golf Club, Sabah Country Club, and Kelab Golf Sarawak. Notably, all these golf clubs have members based golf clubs and have been operating with consistent standard and membership privileges since its inception. In short, those clubs being led by a group of golf enthusiasts – the golf committees and a club management team who take direct orders from the committees.

Designer and prominent or privately owned golf clubs in Klang Valley like Kota Permai Golf CC, Saujana Golf Club, Tropicana Golf CC, TPC Kuala Lumpur (formerly known as KLGCC), Glenmarie Golf CC, Sungai Long Golf Club, IOI Palm Garden are the ‘winners’ and long-standing golf clubs within the competitive market of Malaysia.

From South to North Malaysia, golfers are pampered with choices of golf clubs offering cheap and affordable green fee packages throughout the year. Besides the member's clubs and successful clubs as indicated earlier in this case studies, how will other golf clubs continue to survive by depending on green fees + low subscriptions from its members? They may exist, but are they able to sustain being one of the best golf destinations in Malaysia? 

Price War and Fear + missing VISION?

Unlike Indonesia, Thailand, and Vietnam, Malaysia is now one the cheapest destination to play golf in the region; with no caddies and most of the club with no halfway house operating. Food and beverage offerings across these clubs will be almost similar menus and prices.

Over the past decade, green fees have been the major price war factor among private or proprietor clubs in Malaysia. Unlike Indonesia or Vietnam which green fees begin from min USD50.00 (weekday) and USD80 – USD120.00 per round of golf with buggy on weekends.

The yesteryears exclusive waiting lists have vanished, membership in Malaysia are in sharp decline, lack of amateur and professional golf tournaments, the present online booking engines have changed the game of golf receipts, discounting has significantly lowered the price of the average round meanwhile the cost of running a club has increased dramatically. Golf Club operators fail to accept the fact that, golfers in Malaysia are in search of a new experience in golf compared to the 80’s version of a club experience most clubs are hanging onto for grim death...

According to P. Jeganathan, Head of Sales, TV Advertising (Indian), Media Sales, Astro (The Star Paper 6th January 2019) as quoted;

“Undoubtedly, the highlight of the year for me personally was Tiger Woods’ victory at the Tour Championship on the PGA Tour. The world of golf and the Malaysian golf industry in general needed that boost of energy and Woods went a long way to do that with his win”.

“So far as the coming season is concerned, 2019 should be a year where golf is encouraged and promoted more to the masses. More amateur events should be held and promoted aggressively. It was sad to see the demise of the Sime Darby LPGA Malaysia event and the CIMB Classic. However, it would be great if the Malaysian Open returns after a hiatus of three years. We at Astro will do our best to promote amateur golf participation via our annual event, the Astro Masters”.

Expanded Golf in Malaysia

To begin with an understanding of how golf expanded in Malaysia and how its current business model came to be you have started with Malaysia. The history of golf in Malaysia turns out not to be so much about playing the game, as it was joining a club in the same fashion more or less as westerners had initially, and then utilizing golf for corporate entertaining, and then remarkably using golf club memberships as a speculative investment vehicle.

Subscriptions and Green Fee affluence.

The increase in players always outpaced the construction of courses including visitor golfer tourists in the country, at least through the 2000s. This oversupply has kept the fees vulnerable and barely within reach for the wider population. It was not uncommon back in those days where players would have to reserve golf courses several days/weeks in advance and pay exorbitant green fees on top of sizeable membership fees. For a while, “due to Malaysia’s expanded geographical constrictions, golf became more dispensable, the more it became popular. Golf’s natural barriers towards mass adoption strengthened its prestige.”

Against this backdrop of demand, club membership prices took an embarrassing nosedive and people quickly became “bored” with the idea of “investing” in a membership. For a while, it was a no-lose situation for a person who bought a membership. It is this Malaysia golf membership investment phenomenon that set the stage for the expansion of golf clubs and the expansive business model in SE Asia that followed with all access designed golf clubs and sold to for “no-brainer” entry fee to enjoy “designer” courses within reach.

In Malaysia, golf course operators ignored the potential progression of golf business and fear of losing footfalls when increasing their subscription and green fees on an annual basis. Club facilities were not maintained (except for some developer backed golf clubs with deep pockets), poor food & beverage offerings, golf course maintenance standards and above all lack of efficient clubs operational training and regular KPI monitoring of its business.

Golf is a hobby of those who can afford to pay.

Known the fact, golf being a niche social games unlike other sports, it requires some “qualifications” for one to become a golfer; (a) able to fund their hobby (b) getting all the gears and clubs (c) driving range entry (d) and able to pay their green fees for a round of golf. These basic requirements to become a golfer is already a ‘status” in Malaysia, therefore Club operators shouldn’t fear increasing their monthly subscription and their green fee.

The price-war between operating golf clubs should be blamed for this enigma. Unclear business vision and mission will be the results of today and imagined what will be the faith of the same business in another decade or two?

Golf Tourism – faded in the tourism map of Malaysia.

Sad to mention, Malaysia Golf Tourism has lost its charm with its neighbors like Indonesia, Vietnam, Thai, and others. Once known and trendsetter of golf in South East Asia, Malaysia has lost its tourism receipts shares as far as golf is concerned. The tourism authorities failed to realize the “offerings” to foreign golfers – notably Golf caddies (which has been an issue of religion, culture and maybe politically). But if we observe the other side of the coin, tourism is all about income and industry growth and opportunities for all sectors. Malaysian Golf Tourism perspectives need urgent “turn-around” strategies including more Amateur & PGA Events, attractive golf packages and above all expanded publicity locally and abroad. We don’t need to build more hotels and resorts to meet the demands but simply to enhance the productivity of golf into Malaysia.

The loss of Malaysian Open last four years is evident in how golf is fading in Malaysia. And reading the latest news today from Asian Tour on the returning of Malaysian Open is indeed a piece of great news but what about the growing the game of golf and golf tourism in Malaysia? How do we attract foreign golfers into playing in Malaysia again?

Industry training is imminent.

The golf industry work-force requires urgent attention to skill development, business knowledge and instills of good image of Club Management qualities among all local employees. Showing them the bigger picture of golf and its growth right from their office desk. Golf Clubs in Malaysia should embrace sales and marketing initiatives besides being dependent and serving their regular local golfers and members.

Club Management should begin “interacting” with golfers both locally and abroad. A post on social media on Valentine’s Day Dinner or special four-ball package will help the “brand building” terminology so to speak. Club Management should embark on a farsighted vision in upgrading the standard of services, increase communication with golfers and non-golfers, create more club events with non-members participation, lifestyle experience (notably with improvised club amenities and facilities).

Summary.

Malaysian golf destination is not a difficult product to sell after-all, eliminating the rat race phenomena is relevant. Club Management leaders should combine effort to launch a green fee ceiling in all golf clubs (based on location and standards) and command a grip on green fee control across the country. Additionally, with little more efforts and initiatives including some flexibility on local regulations to re-build the hallmark of Golf in Malaysia.

Lastly, golf courses in Malaysia need to revamp the brand management of each club, from website to social media pages which require dire attention to improvements. Employee and business direction training and development will be key "start-up" to Re-Visit, Re-Fresh & Re-Launch the business of golf in Malaysia will be the most important factor, to begin with.

END.