Golf in Scotland now a £1 billion industry, new study finds

Golf in Scotland is now a £1 billion industry, according to new research conducted by KPMG in association with Oxford Economics.The ‘Value of Golf to Scotland’s Economy’ report, commissioned by the Scottish Golf Union in conjunction with VisitScotland and Scottish Enterprise, and published today at the KPMG Golf Business Forum in St Andrews, found that the industry generates £1.171 billion in revenues, including direct, indirect and induced effects.

More than 20,000 people are employed in golf in Scotland – one in every 125 jobs are dependent on golf – creating wage payments of £300 million.

Once costs are taken into account, golf directly contributes £496 million to Scotland’s gross domestic product (GDP) annually, equivalent to 0.4% of the country’s total economic output.

While Scotland is known worldwide as ‘The Home of Golf’, it is the first time the value of golf to Scotland has been measured in this way.

Hamish Grey, CEO of the Scottish Golf Union, said: “This report clearly demonstrates the significant value of golf to Scotland’s economy. Comparing it to other industries, we can now see for the first time that for example golf’s direct contribution to GDP is 89% that of fishing and fish farming, and 83% of air transport.

“The ‘Value of Golf to Scotland’s Economy’ report, commissioned by the Scottish Golf Union in conjunction with VisitScotland and Scottish Enterprise, provides credible data for all interested in Scottish golf to work from. A related and complementary study of the social impact of golf in Scotland is being developed concurrently and will be finalised later this summer.  

“Scottish golf clubs are continuing to operate in challenging conditions, particularly in terms of finance and climate, and the Scottish Golf Union are providing our affiliated clubs with increased support, guidance and help with future business planning to ensure we have stronger clubs in the future to take advantage of the money spent in the industry.

“Our collective challenge is to work together to build on the evidence base from this report and ensure that future generations of Scots benefit from this great game and the related industry.”

Dr Mike Cantlay, chairman of VisitScotland, added: “Golf is a hugely important contributor to the economy of Scotland, and tourism in particular. With a number of major golf events on the horizon in Scotland, it was important to understand the scale of the industry as a whole in order that we continue to build and grow the industry in future.”

The report focuses on six sectors of the golf industry – golf facility operations, golf course capital investments, golf supplies, golf tournaments and endorsements, golf tourism and golf real estate – and is based on 2011 data.

Other key findings include:

Golf Facility Operations

• There are more than 600 golf facilities in Scotland, of which 597 are golf courses (2011)
• In total, golf facilities support more than 12,300 jobs
• Golf facilities generated annual revenues of £582 million

Golf Course Capital Investment

• As well as investment in existing courses, there are at least eight golf course projects currently in the planning and development phases
• 18-hole golf courses typically spend £44-55K per year on new machinery and equipment
• Some larger courses spend £70-120K per year on new machinery and equipment

Golf Supplies

• Sales of golf supplies (equipment, apparel and accessories) resulted in revenues of £157 million
• Golf professionals / on-course golf shops account for approximately 85% of the market
• The golf supplies sector supported 1,660 jobs in total

Golf Tournaments and Endorsements

In 2011, golf tournaments and endorsements generated total revenues of £46 million. (However, the Open Championship was not played in Scotland in 2011. The R&A forecasts the 2013 Open Championship at Muirfield will deliver an economic benefit of approximately £70 million to the East Lothian and Edinburgh region)
There were three European Tour events in Scotland in 2011; the Scottish Open at Castle Stuart, Johnnie Walker Championship at Gleneagles and Alfred Dunhill Links Championship at St Andrews, Kingsbarns and Carnoustie Links
The Ricoh Women’s British Open took place at Carnoustie Links

Golf Tourism

• Golf tourism generated £120 million in revenues for the Scottish economy. (This excludes green fee revenues, which are counted in golf facility operations data. Scottish Enterprise estimates the total economic impact of golf tourism in Scotland to be £220 million annually.)
• Approximately 1,480 people were directly employed in golf tourism jobs
• Approximately one-third of all green fee payers were from outside Scotland. Of these, 57% were from the rest of the UK, 19% from Europe, 17% from North America and 8% from elsewhere.

Golf Real Estate

• Golf real estate generated revenues of £14 million (2011)
• Approximately 150 jobs were supported by golf real estate
• Total wage income was £4 million

Andrea Sartori, Head of KPMG’s Golf Advisory Practice, said: “While Scotland is the Home of Golf and there has always been an understanding that the sport produces economic benefits for the country, this research will empower decision makers and help them make policy and investment decisions accordingly.

“Many of the international delegates at this week’s Golf Business Forum have come to St Andrews specifically to learn more about golf in Scotland as it is seen not only as a world-class golf destination, but a world leader in the golf business.”

The Golf Business Forum, hosted at The Fairmont St Andrews Hotel and supported by VisitScotland, Scottish Development International and Fife Council, with the assistance of Golf Tourism Scotland, will bring together up to 300 delegates including leading brands, developers and world-class golf and leisure operators from more than 40 countries.