BANGKOK – With the economic slowdown challenging all sectors of Thailand’s tourism market, the “next steps” debate within one particular sector, golf, has played out in the back offices of clubhouses and in the pages of the country’s largest newspapers.
At one end of the spectrum are those course owners who’ve seen the drop in Japanese and Korean visitorship and, in response, have cut prices in hopes of off-setting this drop in revenue by attracting and building business among Thai golfers. This point of view was spelled out in the Bangkok Post’s 27 July story, “Golf Courses hard hit by slump”.
At the other end are a vocal group of Thailand’s premier golf and hotel properties, which have pooled their resources and formed a marketing cooperative called “Golf in a Kingdom: The Thai Golf Experience“. The 13 hotels and courses in this cooperative (www.golfinakingdom.com) have kept prices level, have focused on maintaining course quality, and have invested in building/broadening new markets abroad, in North America and Europe.
And it appears to be working. Golfasian, the country’s leading golf tour operator and a “Golf in a Kingdom” member, has reported visitation numbers exceeding 2008 figures, while several Golf in a Kingdom member courses report rounds that either match or exceed those from 2008, when three quarters out of four were more or less untainted by the current slowdown.
Stacey Walton, general manager at Banyan Golf Club in Hua Hin, and JP Schneider, general manager at Thai Country Club in Bangkok, report no significant drop-off in rounds played during 2009. Walton said the paradigm of rate cutting, especially in reaction to the current economic environment, would surely result in price wars and a downward spiral effect on revenues.
Schneider added that this drop in revenue would, perhaps more importantly, prevent golf clubs from sustaining a high quality product and customer service experience compared to other golfing destinations in Europe, the Middle East and elsewhere in Asia.
“We need to solidify the reputation of Thai golf in markets where our products are well known (Japan, Korea, Australia/New Zealand) and enlarge our presence in markets where Thai golf isn’t so well known: Europe and North America,” added Mark Siegel, CEO of Bangkok-based Golfasian Co Ltd. “The answer isn’t, and never will be, price cuts. The answer is growing our audience through promotion and quality, to maintain revenues in hard times and lay the groundwork for increased revenues and market share when the economy comes back.
“And it will come back, for all Thai courses – not merely Golf in a Kingdom member courses. We recognize that members of our cooperative are the elite, and perhaps their revenue situations aren’t as dire as some of the more modest course operations in Thailand. But the price of Thai golf has always been affordable by Japanese and Korean standards. These price cuts make no difference to them: They don’t encourage more business and they only hurt course employees through wage cuts and attrition. The drop in Japanese and Korean business, which has so severely compromised the revenues of these modest courses, will be followed by a rebound and it’s important that prices remain constant in the interim.
“Approximately 63% of Thailand’s 14 million tourists in 2007 were repeat visitors and this loyalty factor was a major reason why, in the past, the country’s tourism business could ride out economic and political storms more successfully than competitors. However, according to TTR Weekly, an influential tourism industry publication, there is a growing opinion among international travellers that Thailand’s travel product is showing signs of wear and tear, possible even serious flaws and ruptures in the quality of its service and day-to-day security. In addition to the political disquiet, there has been a proliferation of travel-oriented scams, widely reported on the Internet; the most recent focused on the alleged illegal treatment of passengers accused of shoplifting at Bangkok’s airports.
However, there has been very little in the way of a credible response from government to indicate it takes seriously either the scams, the unwarranted price-cutting or the larger brand crisis suffered by Thai tourist entities. The creation of “Golf in a Kingdom: The Thai Golf Experience,” had been mulled for more than 18 months, says Golfasian’s Siegel. But it was the downturn of 2009 that galvanized formation of the cooperative this spring – and it’s working.
“The answer,” Siegel told the Post, “is growing our audience through promotion, to maintain revenues in hard times, and lay the groundwork for increased revenues and market share when the economy comes back.
“At another “Golf in a Kingdom” property, the 36-hole Siam Country Club in Pattaya, site of this month’s Queen’s Cup, an Asian Tour event, the owners have raised greens fees some 15 percent at both its Plantation and Old courses. At Thai Country Club in Bangkok, another Asian Tour stop in recent years, rates have remained relatively constant and so have revenues/profitability, thanks to promotion through “Golf in a Kingdom”, payroll trimming and concentration on maintaining a quality product. So says the general manager.
“The 2009 year-end forecast is still pretty optimistic in the sense that we’re looking at a volume of 53,000 golfers versus 52,000 budgeted,” Schneider explains. “Our main business strategy during this difficult time is to further improve our golf course maintenance, to ensure the best possible playing conditions. We don’t believe that reducing our rates will improve our bottom line as, at the end of the day, our discerning clientele is and will always be willing to spent more for high service consistency and manicured golf course conditions.”