Over-supply of clubs a real concern
Published 03/11/2010 | 05:00
HOLLYSTOWN golf club owner Oliver Barry has called for a Bacon- style report on the golf industry to be carried out in the interests of fair play.
Barry opened Hollystown in 1992 as a pay-and-play facility to fill a gap in the market in the Dublin area.
Since then, Barry and his course superintendent, Joe Bedford, have closely monitored the various phases of development and retrenchment in the golf business.
And, as every club and course in the country is battling the recession, the two men feel the time has come for a cold analysis of the sector.
That's why Barry urges a review similar to those carried out by economist Dr Peter Bacon of the motor and hotel industries.
In relation to the hotels, Bacon said, in a report published a year ago, that the "orderly elimination" of 15,000 hotel rooms should have been started in 2010.
This was because of over-supply of hotel bedrooms, due to generous tax breaks, which caused investors to swarm into the building of hotels over the last decade.
"Most of these investments didn't make sense at the time they were done ... They were being driven, in effect, by tax breaks," he said.
Barry and Bedford -- who has served on greenkeepers' associations in Ireland, Europe and America -- have totted up the figures and found a similar over-supply of golf holes in this country.
Bedford said: "On the island of Ireland, taking all 32 counties, there are 431 affiliated clubs and about 18-20 that are not affiliated to the GUI or ILGU. If you calculate that out, there's about 450 facilities and around 7,500 golf holes.
"Annually, that translates to just over 17 million rounds of golf available every year, so that's what you're talking about in terms of capacity."
And there's the rub -- there's plenty of capacity, but numbers are dropping in terms of membership, societies, tourism and casual golf.
Barry and Bedford estimate that in all the above categories, there is only demand for just over 8.1 million rounds per year right now, which is around 45pc of capacity based on their figures.
At the height of the golf boom the GUI had 302,000 male members and the ILGU 61,000 females, and 'nomad' or casual golfers were estimated at 80,000 in the whole of Ireland.
The GUI had 1,400 registered societies in 2007, but that number has dwindled to 680.
A more interesting statistic is the 29 golf facilities that the Hollystown men estimate are either in receivership, being run by banks or in NAMA.
Essentially, such facilities are being kept open while the banks work out how to get their money back and they can offer lower green fees than projects that are paying their way and battling for every piece of income.
Said Barry: "There are too many golf holes in the country and there needs to be a more clinical look at the whole industry.
"The fittest survive and we would contend it has to be people who are reasonably debt free who should get precedence.
Bedford commented: "We don't mind opposition, but what we want in this industry is fairness.
"We cannot stomach the thought that, basically, debt forgiveness is going to come in wholesale in this industry. Our biggest worry is that projects which really are unviable from the point of paying back the loans, and unviable from the point of view of actually ever washing their face, would be saved at the detriment of ourselves."
"There are a number of areas where this comes in.
"You've got the bigger clubs that the developers got involved in -- a certain amount of those very high-end facilities are going into NAMA.
"But the problem now is that the category of those with debts of €5m to €20m, which a lot of golf clubs are starting to fall into, are not going into NAMA, because they're below the €20m threshold.
"We believe that 50pc of golf courses, some of them private members, some of them privately owned, have chronic debt that's unserviceable. So, how is this all going to pan out? What's going to be the endgame here?"
A good question, indeed, and it will be interesting to see if the Golf Business Conference to be held at the Convention Centre in Dublin on Friday, November 19 (firstname.lastname@example.org) can make a contribution to answering this question.
Meanwhile, Hollystown is celebrating its 10th year of affiliation to the GUI and ILGU, while Bedford is marking his 20th year at the Mulhuddart venue.
Originally opened as a competitive pay-and-play facility, Hollystown has retained that business and extended into membership packages, starting at €390.