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Half of golf operators losing business
Around half of operators in the EMEA region (Europe, Middle East and Africa) experienced reduced revenues and profitability during 2009.
In a report by KPMG Golf Advisory Practice, called Golf and the Economic Downturn, two-thirds of the golf courses surveyed said the financial crisis had impacted negatively on their operations, with nearly half of all courses reporting reduced revenues and profitability.
The report also highlights that 35 per cent of golf courses said they were experiencing lower or stagnant revenues without being able to reduce costs, raising the prospect of unsustainable business operations based on current trends.
Andrea Sartori, head of KPMG's Golf Advisory Practice for the region, said: "While golf course operators, on average, are feeling more positive about their future prospects, two fundamental business factors suggest the way back to the fairway will not be straightforward.
"Firstly, 35 per cent of the golf courses surveyed are facing the worrying combination of decreasing revenues and increasing costs. For some golf courses, the narrowing of profitability might come sooner than expected and it would not be a surprise if we saw some golf courses going out of business in 2010.
"The depressed transaction prices of golf courses are evidence to the fact that the industry is really struggling."
"Secondly, nearly half of all the courses surveyed reported a drop in revenues, fuelled in part by falls in memberships, green fee revenues and food and beverage spending."
The report is free to view and can be downloaded from the KPMG website (www.golfbusinesscommunity.com).