Vital Signs, july 20, 2013

     Hard times continue to put the pinch on South Korea’s golf industry, and private clubs, which account for two-thirds of the nation’s golf properties, are currently being squeezed the hardest. “The prolonged economic slump has made people more reluctant to golf, reducing the demand for memberships,” a spokesperson for the Korea Golf Course Business Association told the Korea Times. The imbalance between supply and demand is reflected in the average price of a lifetime golf membership, which the association says has fallen by 63 percent since 2008. Such price declines are bleeding clubs dry, but it isn’t the only big problem they face. Clubs that have opened since 2005 are obligated, under law, to refund membership fees when members decide that they want their money back, and that’s a difficult financial burden to bear. “The majority of membership courses will be insolvent at some point,” said Seo Cheon-beom of the Korea Leisure Industry Institute. “I think they will either have to close or turn into public courses to remain in business.” Seo predicts that close to half of the nation’s golf properties will be public by 2016.

     What goes up, it’s often said, must come down. And today, what’s coming down are real estate values in India. Thanks to a slowing economy, the nation’s residential developers are witnessing the initial signs of a decline in sales of upscale housing, the kind that’s typically built along the fairways of golf courses. “The richer middle class,” says the Times of India, “isn’t buying homes like before.” Mudassir Zaidi, a regional director for Knight Frank, acknowledged that “it’s now getting increasingly difficult to sell luxury homes across major markets like Gurgaon, Mumbai, and Bangalore.” Seeing as how a high-flying housing market has inspired many of India’s golf development dreams, can you predict what comes next?

     This year’s lousy spring weather has inflicted major pain on the municipal golf operations in St. Paul, Minnesota. Three big snowfalls in April and 20 days of rain in May have put the city’s four golf courses so far behind the eight ball that they aren’t likely to match the play they generated last year. “Unprecedented is probably the word we’d choose,” said Brad Meyer, a spokesperson for the city’s parks and recreation department, to KARE 11. Through the end of May, rounds at the city’s courses were down by 50 percent from 2011, while revenues were down by 41 percent. What’s increased for the city are expenses, largely due to the cost of making weather-related repairs.

     Golf tour operators are beginning to send more of their customers to Trump International Golf Links Scotland. “Our tour operator bookings have more than doubled as news on our course spreads,” the resort’s Sarah Malone told the Scotsman. “Tour operator interest now contributes to more than 30 percent of our business, compared to 10 percent of our bookings last year.” In the year since it opened, according to Malone, the resort has entertained groups from the United States, Australia, India, South Africa, Argentina, Canada, and many European countries. Ronnie MacAskill, the director of golf at the nearby Royal Aberdeen Golf Club, isn’t surprised. “Trump has delivered exactly what he set out to do: a sensational golf course, with many visitors claiming it is one of the best they have ever played.”

     Between 2009 and 2012, the 650 clubs in the Carolinas Golf Association lost nearly 30,000 members, according to the association’s executive director.

     Time is quickly running out on China’s reign as the world’s most populous nation. The United Nations predicts that India, the world’s second-place nation (current population: 1.24 billion), will pull even with the People’s Republic (1.34 billion) by 2028, when both will have 1.45 billion people. When it comes to population growth, however, the nation that’s really on the move is Nigeria (162.5 million), which is expected to pass the United States (314 million) by the middle of this century and might pass China by the end of the century. Among the world’s other fast-growing nations, the U.N. says, are Indonesia, Tanzania, Pakistan, the Democratic Republic of the Congo, Ethiopia, Uganda, and Niger. Their populations are expected to swell past 200 million by 2100.

     Are course renovations guaranteed to attract more play? Those who believe upgrades are a can’t-miss proposition would be advised to consider the experience of Don Veller Seminole Golf Course, a property owned by Florida State University. In the late 1990s, the course averaged 70,000 rounds a year. Not long after, the Tallahassee Democrat reports, the university built a new clubhouse (cost: $5.5 million) and spent $2.2 million on golf course improvements. Despite the investment, however, the course has lost, on average, $500,000 a year for the past five years. Nowadays it rings up just 36,000 rounds annually. The moral: In golf operations, there are no easy answers.

     Real estate values aren’t all that’s rising in Dubai. A record number of tourists -- more than 10 million of them -- visited the emirate last year, a 9.3 percent increase over the number posted in 2011.