The Sport of Golf and Economic Development

The sport of golf, dating back hundreds of years that saw its roots originate from Scotland, sees a popularity that has spread across the world. In 2022, just in America alone, over 40 million people played golf – both on-course (on a golf course which was 25.6 million) and another 15.5 million played exclusively in off course golf activities which included driving ranges, indoor golf simulators or golf entertainment venues like Topgolf and Drive Shack – according to the National Golf Foundation. Golf sports icons like Tiger Woods, Scottie Scheffler, Lilia Vu and Ruoning Yin have helped popularize the game.

Various jurisdictions Have Fought Hard to Have Either an on-course and/or an off course golf activity

It is clear that many jurisdictions have positively received the notion of golf infrastructure being developed and hosted in their territory. How have they tried to attract them? One example of this has been tax credits, which has been controversial, in trying to attract new golf courses and off-course golf infrastructure. This has seen, for instance, various jurisdictions such as in the United States see public golf courses exempt from taxes and private golf courses and off-course infrastructure receiving tax credits.

Nonetheless, there are arguments that have showcased the overall positive impact it can have:

1.?????? It can have both direct and indirect economic benefits ie tourism which projects tangible value

With economic impact, in the US, based on 14,000 US golf facilities, based on a study commissioned by the American Golf Industry Coalition and conducted by the National Golf Foundation, golf has $102billion direct impact on the US economy, with indirect benefits bringing the total to over $226billion, creating 1 million direct jobs and an overall 1.65 million jobs.?

For instance, the economic impact of just a Topgolf facility could be massive. As generally an average TopGolf facility could employ around 500 employees – as facilities not cater solely for the golfers but also the facilities management and the food and beverage establishments and other entertainment that cater to the experience, could generate millions for a jurisdiction. An example was a TopGolf facility that opened in Nashville, Tennessee in the US that estimated to have $265 million in economic impact over a decade.

Globally, the golf tourism market size was valued at $21.74 billion in 2021 and is projected to expand at a compound annual growth rate (CAGR) of 7.6 per cent from 2022 to 2030. Some of the world’s most famous golf tours, such as the PGA, bring in millions not just in terms of direct economic benefits but also indirect in terms of golf tourism.?

2.?????? It is trying to become more of an inclusive sport and the growing popularity of off-course golf infrastructure, thereby boosting further civic participation

Golf has been traditionally a very elite sport – in particular for white men. However, the disruption of the sport, especially in off-course golf infrastructure, is disrupting and further bringing economic development through new investments and, in parallel, attracting new participants to the sport in some fashion.

The popularity of Topgolf has led to 74 facilities being built across the globe the past two decades, including 67 in the United States alone, with the rest opening in places such as Dubai with Topgolf Dubai opening in 2021. Among the important 18-to-34 year-old category, 6.2 million players played on actual golf courses, while 5.8 million played exclusively at “off-course” venues like Topgolf, which looks at some point to surpass actual golf courses.

To note, in 2021, a record 3.2 million Americans played golf on a course for the first time. While it is true overall golf still has much to do in terms of attracting women and people of visible minority backgrounds to the sport, there has been progress made especially in its off-course facilities.

3.?????? It is No Longer US-European Centric and Growing Globally notably in Asia, further boosting inclusion and interest worldwide through its growing popularity ?

While golf traditionally, not just with certain circles, has also been a very US-European centric sport – times are changing. This in turn further boosts the popularity of the sport globally and in tune further drives the interest for golf infrastructure – from golf courses to off-course developments like Topgolf.

None of this can be felt than in Asia. In Japan, for instance, the country represents a fifth of the global golf business alone and the worlds second largest market of golf behind the USA. South Korea is also a major chunk in the golf business globally as well. In fact, it is seeing the likes of virtual golf boosting popularity in Korea.

Analysis in Golf’s 2020 Vision adds weight to the growing importance of other Asian markets, such as in China and India, saying that ‘A boom in the number of children playing the sport in China and India means that the next generation will increasingly be from Asia: players like Shanshan Feng and Andy Zhang are a sign of things to come.’ To note, in China alone, the number of golf courses has tripled in less than a decade, which no doubt can correspond with the wealthier Chinese consumer that has seen luxury in general across various sectors prioritize the Chinese market.

Asian women have been making an impact on the sport, further boosting the sports drive to inclusion, such as with superstars Chinese Yani Tseng and South Korean Na Yeon Choi.

The reach of golf has grown in popularity not just in Asia but beyond. In Dubai for instance, golf is estimated to have an economic impact of over $131 million annually.??

To note, the International Olympic Committee fairly recently reinstated golf as a Olympic sport, starting at the 2016 Olympic Games in Rio de Janeiro in Brazil.

Despite the challenges golf still faces (from its elitism to sustainability to preferential treatment in tax incentives), its perception to bring positive economic benefits in a jurisdiction continue to be felt around the world, and in parallel, further inclusion and interest to the sport.

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