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Country Snapshot: India / Golf Advisory Practice in EMA

Country Snapshot: IndiaGreat challengeseven greater potential

The Indian economy

Key indicators 2009 2010 2011* 2012*

Population (m) 1,166 1,184 1,202 1,238

GDP at current market prices (USD b) 1,365 1,729 1,988 2,326

Real GDP growth (%) 9.1 8.8 7.8 8.6

Consumer price inflation (%) 10.9 11.9 6.8 5.0

*Forecasts

Source: Economist Intelli gence Unit, 2011

Overview of supply

The British Empire left a golfing legacy to India, and a number of high quality

courses, steeped in tradition. The introduction of the Indian Golf Union (IGU) in

1955 took over responsibilities for golf organisation and development from the

Royal Calcutta Golf Club, who had been handling Indias golf interests since the

clubs inception in 1829.

According to the IGU, India currently has 196 registered golf courses, and up to

35 additional courses not affiliated with the IGU. Around 50% of the registered

courses are situated on military bases, which are only accessible to military

personnel and select individuals. This leaves approximately 100 courses to cater

for a civilian golf demand.

The makeup of the golf course supply is split between 18-hole (39% share)

and 9-hole (60% share) facilities with three 27-hole clubs. There are five existing

signature courses in the country, including ones designed by Jack Nicklaus,Arnold Palmer and Greg Norman.

The Indian golf market 2011

Number of golf courses* 196*

Number of club members (approx) 100,000

*affiliated to the Indian Golf Union (IGU)

Source: IGU

Number of Golf Courses

Affiliated to IGU

GolfCourses 200

195

190

185

180

175

170

165

160

155

150 2000 2001 2003 2004 2005 2006 2007 2008 2009 2010

Source: IGU

158 159161

164

175

179

186 186

194196

Golf Advisory Practice in EMA

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The majority of courses in India are located in proximity to main urban centres,

with many in or close to New Delhi, Bangalore, Hyderabad and Indias largest city,

Mumbai. Surprisingly there are still no resort courses in the country even though

inbound tourism in India has grown 8.1% in the last year.

Overview of demand

It is estimated that India has approximately 150,000 active golfers, of which

100,000 are golf club members. Of these, 55,000 subscribe to the IGU for a one-

off fee of around USD 200 benefiting them to concessional rates at affiliated clubs.

The demographic of these players is heavily skewed towards male participants

(85-90%) while female and junior golfers comprise the remaining share.

In recent years private clubs have become more accessible to green fee players,

however many courses still advertise, or like to be seen as members only.

According to our sources, there are only two clubs, both in the capital New Delhi

which are defined as public courses. Many clubs restrict green fee players with

the majority of courses closing to visitors over the weekend to cater for the

members demand.

Rounds and revenues

Research collected for KPMGs Golf Benchmark Survey indicates that the average

number of rounds played per annum at 18-hole facilities ranges from 25,000 to

30,000 (excluding military courses). At some of the busier clubs where floodlights

are used, hours can be extended to accommodate a higher demand.

Average annual revenues for both nine and 18-hole courses range USD 180,000-

200,000 (excluding military courses) with some larger, more popular clubs reaching

anywhere up to USD 800,000 per year.

Membership initiation fees typically range USD 1,800-2,000 however, at some of

the more high profile clubs with very restricted and exclusive membership policies,

fees of up to USD 20,000 may be charged.

Annual subscriptions for individual membership can range USD 100-300depending on the club. With the average number of members per club estimated

at 1,000, although some courses exceed 2,000 members, it becomes clear that a

large portion of annual revenues emanates from subscriptions.

Average green fees range USD 10-50 and do not contribute to annual revenue

in the same way as subscriptions, due to most rounds being allocated to members.

Some high-end courses charge up to USD 100 but these are low in numbers.

Challenges

Our discussions with local industry stakeholders highlighted an underlying theme

of lack of professional expertise and knowledge within the Indian golf industry.

The requirement for more dedicated and experienced resources to advise and

understand the challenges that are faced not only with new projects but also whenlooking to overcome inherent problems of long established operations.

Another major challenge India faces today in developing golf courses is the ability

to acquire land in both a cost and time efficient manner. Land parcels are generally

small; and developers need to purchase multiple plots at a cost that can quickly

inflate. The initial steps taken when planning a project with a golf component can

be time consuming, expensive and misunderstood, delaying developments and

have, in some instances, resulted in the omission of golf from project master plans.

In an attempt to drive participation rates, the sport needs to be supported by an

increase in accessible courses that focus on affordability to a wider audience.

However the viability of such projects can be questioned especially when the only

cost effective land available for this would be away from urban areas with limited

transport infrastructure.

Cluster map of main golf course

supply in India

15-20 courses

8-12 courses

5-10 courses

4-6 courses

New Delhi

Mumbai Hyderabad

Bangalore

Chennai

Distribution of golf courses by size

Source: IGU

27-hole + courses 1%

18-hole courses 39%

9-hole courses 60%

Did you know?

India was the first country outside

Great Britain to have a golf course.

The Delhi Golf Club was chosen tohost the first golf tournament of the

Asian Games in 1982.

The average number of members per

golf club is 1,000; however, this can

exceed 2,000 at some clubs.

The New Delhi area has the most

courses in India with as many as 18.

Environmental considerations could

restrict progress in course construction

as the use of land and water for non-

essential living is opposed.

2011 KPMG Tancsad Kft., a Hungarian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative

(KPMG International), a Swiss entity. All rights reserved.

7/31/2019 KPMG the Indian Golf Market 2011

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Local contact:

Indian Golf Union

www.indiangolfunion.org

Acknowledgements:

Indian Golf Union, Ranganath Thota

Golfgaga.com, Howard Swan Swan Golf

Designs, Anit Mehrotra Silverglades,

Anil Dev Asian Golf Course Owners

Association

For further information please

contact the Golf Benchmark Team:

KPMGs Golf Advisory Practice

H-1139 Budapest,Vci t 99

Hungary

T: +36 1 887 7100

E: info@golfbenchmark.com

The information contained herein is of a general nature and is not intended to address the

circumstances of any particular individual or entity. Although we endeavour to provide accurate

and timely information, there can be no guarantee that such information is accurate as of the

date it is received or that it will continue to be accurate in the future. No one should act onsuch information without appropriate professional advice after a thorough examination of the

particular situation.

The KPMG name, logo and cutting through complexity are registered trademarks or

trademarks of KPMG International C ooperative (KPMG International).

2011 KPMG Tancsad Kft., a Hungarian limited liability company and a member firm of the

KPMG network of independent member firms affiliated with KPMG International Cooperative

(KPMG International), a Swiss entity. All rights reserved.

Development and future outlook

In the last 10 years, 38 golf courses have been affiliated to the IGU, of which

30 were new developments and the remaining eight as re-developments of

existing military courses. This has been a very slow growth rate for the last decade,

however based on our research; there are currently as many as 30 courses under

construction.

Due to the lack of transparency it is difficult to estimate future growth rates of

demand. One approach, as shown on the left is based on expected participation

rates applied to a small section of the population who can feasibly afford to choose

to play golf. This suggests that India may need to build up to 100 new courses

to satisfy the demand over the next decade. An increase in participation can be

achieved by:

Building more affordable and accessible facilities

Increasing activity in junior and academy golf

Effectively promoting professional golf to a wider audience.

The IGU has taken positive steps to ensure the development of golf in years to

come. A joint venture with the R&A and IGU saw the creation of the National Golf

Academy, intent on improving the standards of teachers, players, trainers andcourse managers.

The reach of the professional game will be just as important in driving the sport

forward in the future. Players like Jeev Milkha Singh and SSP Chowrasia (both

European Tour champions) inspire all ages to take up the sport. Professional

competitions such as the Indian Masters (which was inaugurated in 2008 and

is now Indiasflagship golf tournament with a purse of just over USD 2.5 million

in 2011) bring exposure to both global and national Indian markets. Additionally,

the Indian Open on the Asian Tour has been won by an Indian national three out

of the last five times.

Future course development seems inevitable and may need to come hand-in-hand

with real estate opportunity. Provided that the challenges that exist in India can beovercome, there is great potential in this growing golf market.

Outlining future potential

golf demand

The population of India stands at

1.2 billion. The estimated

population of India with a

disposable annual income of morethan USD 10,000 is approximately

1.5%* of the total population,

resulting in a potential golf target

market of 18 million.

The proportion of active golfers

from this population is 0.8%.

Assuming that in the next

10 years, the proportion of active

golfers doubles to 300,000,

then India would have to build

between 90-100 new courses

to accommodate the increaseddemand.

*McKinsey Global Institute with KPMG elaboration