talking points India: The Next Big Thing?

Treading on a very slippery slope, KPMG continues to offer advice to would-be developers.

In a recently published “country snapshot,” the accounting firm’s Golf Advisory Practice opined, with some hedging, that India “may need to build up to 100 new courses to satisfy the demand over the next decade.”

The crux of KPMG’s argument rides on the belief that India’s existing stock of golf properties -– 196 “registered” courses and as many as 35 “unregistered” courses -– is inadequate, considering the demand that will inevitably be driven by the nation’s rapidly growing, ever-wealthier middle class.

“Assuming that in the next 10 years, the proportion of active golfers doubles, to 300,000,” KPMG argues, “then India would have to build between 90-100 new courses to accommodate the increased demand.”

Mind you, this is only 10 golf courses per year. Still, the U.S. golf industry has learned that logic founded on such assumptions is best served with a stiff drink.

Here's the sad part: KPMG understands how to best grow the game in India. “The sport,” it says, “needs to be supported by an increase in accessible courses that focus on affordability to a wider audience.” But KPMG also knows how the bread is likely to be buttered, as it predicts that most of the nation's new courses will unfortunately be built as part of U.S.-style suburban residential communities.

“Future course development seems inevitable and may need to come hand-in-hand with real estate opportunity,” KPMG sadly concludes.

And we all know where that eventually leads: To a golf business whose foundation rests mostly on money, not on a passion for the sport. To development decisions that are put into the hands of people who, because they have dollar signs in their eyes, can't see past the bottom line.

A case in point: A month or so ago, the Asian Golf Course Owners Association announced a plan to create a $150 million investment fund (it hopes the fund might eventually swell to $1 billion) that will be used to underwrite the construction of roughly 150 golf properties in India over the next five years. Prominent among the venues to be built: “golf real estate” and “resort golf courses.”

“We look at golf as a sport only,” the brains behind this harebrained scheme said in a press statement, “but if you dig deeper, you would realize that golf is a green gold mine waiting to be discovered.”

Such thinking isn't a plan for growing the game. It's a plan for exploiting an opportunity.

There's gold, and there's fool's gold. Sometimes the difference isn't immediately apparent.

Much of the information in this post originally appeared in the October 2011 issue of the World Edition of the Golf Course Report.