Is the Scottish golf industry remarkable?

By: March 24, 2016

A recent R&A study (A satellite account for golf in the UK) found that the Gross Value Added (=defined as the profits plus wages within an industry, less an adjustment for taxation and subsidies) of the golf industry in the UK was £2.045 billion in 2014 with the largest single area being golf clubs, including their food and beverage operations at £623m (30%).

The greatest single source of this consumer expenditure (£2.253 billion, or 52%) is consumption associated with the UK’s near 3,000 golf clubs which have an average annual turnover of £751,000. Golf equipment and clothing account for £939m of consumer expenditure and golf-related tourism, events and accommodation a further £775m.

Scottish Golf

Golf clubs are the most significant employers in the sector (17,780 FTE, 33%) which equates to an average of just over six full-time employees per club. To put these figures into context, golf employment is 0.21% of the UK’s total employment or the equivalent of 1 in 500 jobs.

How is the Scottish golf industry performing?

The golf industry is noticeably larger in Scotland than in the rest of the UK with Scotland accounting for 20% of the sport’s GVA (c.f. 8% of the population). This can be explained by Scotland’s higher participation rate for playing golf (England has the lowest participation rate in the UK) and, of course, the highly developed golf tourism and major events (e.g. Ryder Cup). I think the golf industry’s contribution to the Scottish economy is bigger than in other home nations.

Malcolm Roughead, Chief Executive of VisitScotland, said: “The golf industry is a key driver for economic activity across a number of sectors including equipment, accommodation, food & drink and retail. It creates jobs and encourages spending and there is no doubt that Scotland’s strong golf tourism and major events portfolio is a significant factor in this success.”

Golf consumption in the UK 2014

However, there is still room for improvement in golf tourism, as it is characterized by domestic tourism (=81%). The TOP 5 sources of overseas tourism are the U.S., Germany, France, Australia and The Netherlands. The best spenders are the tourists from the U.S., Germany and Australia. VisitScotland hopes that Scotland will be able to attract more tourists from China, Poland, Norway, Sweden and the UAE.

I have not found any mention about how Scotland would like to entice Millennials (born between 1980 and 2000). There are roughly 80 million Millennials in the United States alone, and each year they spend approximately $600 billion (source: Accenture: Who are the millennial shoppers). Three-quarters of UK Millennials (75%) earn under £50,000 per year; 78% of older consumers do so as well.

I would start to think about how could Scotland provide the following (at least) for Millennial tourists:

  • enable them to turn a business trip into a personal holiday,
  • travel on a budget: they are seeking offers, deals and discounts,
  • provide authenticity,
  • flexibility, because many of them are spontaneous,
  • provide automated check-in services,
  • smart-concierge (e.g. Hyatt‘s Twitter-based concierge @Hyattconcierge),
  • social booking etc.

Golf participation in UK in 2014

The golf industry GVA in Scotland was £409m in 2014, and consumer spending on golf increased from £636m (source: KPMG study, 2011) to £861m from 2011-2014.

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