Finansnyheder

The luxury golf courses catering to the global elite

By  | 

Liberty National Golf Club in New Jersey, US (pictured above), is one of the most expensive places to play the sport in the world. The staff are cagey when asked about membership fees but eventually explain there is a non-refundable initiation fee of between $300,000 and $400,000, plus annual dues of about $30,000.

This is a course former US PGA [Professional Golfers’ Association] Tour commissioner Tim Finchem described as “one of the most stunning settings for professional golf there is on the planet”. Even so, $300,000-$400,000 is roughly six times the US median pre-tax income. That said, if you are one of the American ultra-wealthy, the fee is easily affordable. According to the US think-tank the Economic Policy Institute the average annual income of the country’s wealthiest 0.1 per cent was $2.8m in 2017.

Liberty is one of the world’s elite golf clubs, along with others such as Wentworth and Beaverbrook in south-east England, Augusta National in the southern US state of Georgia, Loch Lomond in Scotland, and Iwate Hirono in Japan. Their annual fees tend to start around £10,000 a year and come on top of sizeable joining fees — often in six figures. By contrast, the cost of an average full golf club membership in England is £901, according to a 2018 England Golf survey.

High-end golf courses are the latest luxury good, offering exclusivity and a place to network. They also host prestigious professional tournaments. Golf, according to the Wealth-X 2019 High Net Worth Handbook, is the sport ultra-wealthy individuals are most interested in.

Exclusivity works in other ways too: a golf course is not like other luxury brands in that it cannot churn out more of its “product” and thus risk devaluing itself in the way a high-end fashion label might. Rather, as long as clubs maintain their standards, limited membership ensures their exclusivity grows. True, a golf club owner can build more courses, but this takes time, as it does for a new course to grow its reputation. A club such as Augusta (host of the US Masters major tournament each spring) did not acquire its mystique overnight, no matter how perfect its greens are.

LÆS/ READ  Sterling rallies to two-month high as no-deal Brexit fears ebb

Meanwhile, the new rich from countries such as China and India want the kind of status symbols wealthy westerners have long enjoyed, including high-end golf. Elite golf courses traditionally have been found in locations where golf is popular and wealthy people live, or will visit, in sufficient numbers — countries such as the UK, the US, Ireland and Japan, and a few outliers such as Hong Kong and Singapore. But clubs for the super-rich are springing up in new venues. The first all-grass championship course in the Middle East, the Emirates Golf Club, opened in Dubai in 1988, and the region has become a climatically unlikely golf destination. The Mission Hills resort in Shenzhen, China, was established in 1992 and now has no fewer than 12 courses. Tiers of membership go up to the Chartered Diamond category, costing Rmb2.6m ($384,000).

A 2014 KPMG report found the region with the highest average cost of golf course construction was the Middle East and north Africa. This, it suggested, may be because these regions are seeking to attract wealthy golf tourists, although it also noted that “new luxurious facilities have been developed in countries including Russia, Belarus, as well as Poland and Bulgaria”.

Gary Woodland posses with the trophy after winning the U.S. Open Championship golf tournament Sunday, June 16, 2019, in Pebble Beach, Calif. (AP Photo/Marcio Jose Sanchez)
Gary Woodland posses with the trophy after winning the U.S. Open Championship in Pebble Beach, California © Marcio Jose Sanchez/AP
LAS VEGAS, NV - NOVEMBER 23: Tiger Woods plays a shot on the tenth hole during The Match: Tiger vs Phil at Shadow Creek Golf Course on November 23, 2018 in Las Vegas, Nevada. (Photo by Christian Petersen/Getty Images for The Match)
Tiger Woods plays a shot on the tenth hole at Shadow Creek Golf Course on November 23, 2018 © Getty Images for The Match

These clubs are largely private, though some allow public access. Shadow Creek near Las Vegas lets guests of MGM Resorts play — for a $500 fee per round. Visitor numbers are very limited and access is only available from Monday to Thursday. Similarly, Pebble Beach in California calls itself “the no. 1 public golf course in America”, but a round costs from $550 before any extras, with rooms at the resort starting at about $800 per night.

In the UK, high-end golf clubs are clustered in two places — in London’s wealthy commuter belt where they are convenient for the capital’s rich, and Scotland. The latter is where the modern game of golf originated — it has been played at St Andrews Links on the east coast for 600 years. In the US, elite clubs tend to be in or near major cities (such as Liberty, which offers views of the Manhattan skyline), although, as in Scotland, many are destinations in their own right.

LUSS, SCOTLAND - JULY 11: Darren Clarke of Northern Ireland putts on the 17th green during round four of The Barclays Scottish Open at Loch Lomond Golf Club on July 11, 2010 in Luss, Scotland. (Photo by Harry How/Getty Images)
Darren Clarke plays during the Scottish Open at Loch Lomond. Scotland’s reputation as the home of golf bring international attention.
Former US president Barack Obama
Former US president Barack Obama at St Andrews © Getty

But what do the global wealthy get for their money? “It’s more about [the] experience than anything else,” says Michael Duffy, sales and marketing manager of Centurion Club near St Albans, an affluent commuter town north of London. “There’s also accessibility. People want to be able to play when they want to play.” To this end, he explains, the club limits the number of members and only allows members’ guests (as opposed to walk-in visitors). This is a key point: at many mainstream courses, there will be congestion at peak times. At elite courses there may be a long waiting list to join, but the course will not be crowded.

LÆS/ READ  Houthi rebels claim responsibility for Saudi oil facility attack

“Our members tend to be drawn from a north London demographic. We’ve got a lot of people in [financial] roles — entrepreneurs, hedge fund managers,” Duffy adds.

Indeed, having fellow members from the global wealthy is one of the big draws. Many of the world’s most expensive clubs number billionaires, ex-presidents and other luminaries among their members. Tycoons Bill Gates and Warren Buffett are members of Augusta, for example. In fact, it took Gates several years to get in, and the club only began admitting women in 2012, starting with former US secretary of state Condoleezza Rice and investor and philanthropist Darla Moore.

AUGUSTA, GEORGIA - APRIL 13: Bubba Watson of the United States plays his shot from the third tee during the third round of the Masters at Augusta National Golf Club on April 13, 2019 in Augusta, Georgia. (Photo by Andrew Redington/Getty Images)
Bubba Watson of the United States plays during the third round of the Masters at Augusta National Golf Club on April 13, 2019

The Wisley is another elite club in London’s commuter belt. It is located next to the colourful Royal Horticultural Society gardens in an area densely populated with golf courses. Membership fees are “in the tens of thousands” of pounds a year, according to the club, which has an unusual public-company structure, with its 700 members being shareholders. The fees, says Ian Cox, the Wisely’s development director, go to maintaining “hundreds of acres of turf — the best turf conditions”. He says even the rough — the unmanicured parts of the course — is carefully managed. “The point of it is the pursuit of the finest possible play.”

Many of the top clubs take this to extreme lengths. A New Yorker magazine feature on Augusta described “a vast network of pipes and mechanical blowers, which help drain and ventilate the putting greens. When the fans blow one way, they provide air to the densely seeded bent grass of the putting surface. This promotes growth. When the fans are reversed, they create a suction effect, and leach water from the greens. This promotes firmness.”

LÆS/ READ  Brussels eases off on plans to rewrite fiscal rule book
AUGUSTA, GA - APRIL 09: Condoleezza Rice, former Secretary of State and current Augusta National Member, attends the 2014 Par 3 Contest prior to the start of the 2014 Masters Tournament at Augusta National Golf Club on April 9, 2014 in Augusta, Georgia. (Photo by David Cannon/Getty Images)
Condoleezza Rice in her Augusta National club jacket © David Cannon/Getty Images

Clubs’ amenities, too, stretch far beyond golf. Extras can include excellent restaurants, spas and pools, making them places to entertain business contacts. Many clubs have reciprocal arrangements with similar ones abroad. “Our membership gives you access to clubs in places ranging from Hong Kong to Spain,” says Centurion Club’s Duffy.

This level of luxury is reflected in the building and upkeep costs. KPMG’s report said that “in some cases, the cost of a high-end golf course can be as much as five times more than a course of lower quality”. Liberty, according to The New York Times, cost $250m to build.

Yet outside the high-end scene, golf is a sport in decline. According to a report by the Pellucid Corp, which provides data on the industry, the number of regular golfers in the US fell from 30m to 20.9m between 2002 and 2016, while in the UK a recent Golf Monthly magazine headline asked: “Why did so many golf clubs close in 2018?”

A frequently cited reason is that golfers are an ageing demographic and are not being replaced. There is plenty of concern in the industry that millennials do not play golf. Explanations range from the financial — that twenty- and thirtysomethings are struggling under high levels of debt and therefore cannot afford to take up the sport — to the social: a lack of interest in playing four-hour games.

However, if the past 20 years have taught us anything, it is that the struggles of middle and upper-middle earners do not mean there is trouble at the top. Credit Suisse notes that since the 2008 financial crisis, the wealthiest 1 per cent have fared better than the rest. In golf, though, there may be change. Amazon chief Jeff Bezos golfs, but many young tech titans do not. Google “Mark Zuckerberg golf” and the top results are all about the Volkswagen Golf he bought.

Via Financial Times

Print Friendly, PDF & Email

Hold dit netværk orienteret