Consumer Research:Potential growth in the center of the world

North Africa has a historic relationship with golf dating to the late 19th century when the British introduced the game to Egypt. They built the first private club in North Africa, the Gezira Sporting Club, but it wasn’t until this past decade the sport started to develop. Several golf courses appeared throughout the region, attempting to capitalize on golf as a potential source of tourism income. With supply growth, the number of golfers has increased, too.

Currently, there are only 43 golf courses operating in North Africa – Morocco (18 courses, 42 percent), Egypt (14 courses, 33 percent) and Tunisia (10 courses, 23 percent) are the three largest markets, according to KPMG’s 2008 Golf Benchmark Survey. Additionally, there are 40 to 45 golf projects in different phases of planning and construction.

Participation rates among the local population still are very low compared to European levels. The primary source of demand is tourism. The estimated number of golfers in the region is about 9,000. This figure equates to a golf participation rate of about one player in every 10,000 inhabitants. As the most developed golf region, Morocco accounts for more than half of these golfers. Egypt follows with about 3,000 players. Tunisia has less than 1,000 golfers. Given the low participation rate, there’s likely demand growth potential in North Africa.

All courses in North Africa have reported year-round playability. The average number of rounds played on a North African golf course is 26,500, considering courses of all sizes. This figure equates to 73 rounds per playable day. Eighteen-hole golf courses host about 20,000 rounds. The average number of rounds played is slightly higher than the registered number at golf courses in the south and east Mediterranean.

The majority (89 percent) of the total rounds consist of green-fee rounds, and only about one-tenth are played by members. The share of member rounds versus green-fee rounds is significantly higher in Morocco than in other countries.

To allow courses to benchmark themselves against the average of their performance group, KPMG calculated the average number of rounds for the top and bottom performers. (See chart at bottom right.) While some courses with 27 or more holes recorded more than 40,000 rounds, the lowest performers recorded only 10,000 to 15,000 rounds. Considering the size of the courses and focus on 18-hole courses only, it’s apparent the best performers recorded about 25,000 rounds.

Source for text and charts: KPMG’s 2008 Benchmark Survey