Tourism directly represents 5% of global GDP. Tourism, as an economic sector, is responsible for more than 235 million jobs worldwide. That is 1 out of every 12 in the World. It’s a phenomenally high number. In Europe, tourism is by far the largest employer, even more substantial than the car industry.
Tourism can be regarded as an export service. Tourism brings in fresh cash as a result of international tourists purchasing products and services. In total, tourism is the 4th largest export sector in the world, valued at $1 trillion, after fuel, chemicals and automobiles. In some developing countries, tourism now represents more than 25% of GDP.
Tourism is also an important economic activity in the European Union. In 2011, Europeans made over 1 billion holiday-trips. The top 5 destinations are Spain, Italy, France, UK and Austria! Tourism contributes to employment and economic growth at grand scale in both new and old EU Member States:
|Country||Tourism (%) of GDP||Tourism (%) of Employment|
It’s remarkable how significant the tourism industry is as an employer in an industrial economy such as Germany, and how important tourism is to the service economy of the UK. Croatia’s dependency on tourism, as a key engine of its economy, is well documented. Closer to home, tourism contributed to 4.8% of employment and 5.3% of GDP in Macedonia. In Albania the figures were 6% of employment and 11% of GDP (certainly a large contribution here by Kosovo tourists!)
Tourism in Kosovo is in its infancy, according to Wikipedia, which also refers to a NY Times article in which Kosovo was named as one of “The 41 places to visit in 2011” (NY Times, January 7, 2011). Relevant data on the size and performance of the tourism (hospitality services) sector in Kosovo is limited. However, the Statistical Agency of the Republic of Kosovo reported that non-residents spent 11,000 and 22,000 hotel nights per quarter in 2011. Tourism and hospitality business in Kosovo is currently driven by the leisure habits of the local population and the large Expat community. Activities aimed at attracting international tourists to Kosovo are most often donor project driven and hence ad hoc.
In general, one can conclude that the three countries – Kosovo, Macedonia and Albania have great potential for developing tourism into one of the anchor sectors of their local economies, producing both jobs and growth, yet at this point they are all under-performing as tourist destinations. The reasons for this are mixed and sometime country-specific. There appear to be some confusion about what growth strategy to follow. Should the objective be to develop a large variety of tourism sub-sectors within one country or focus on one or two core sub-sectors? Is the focus going to be on mass-tourism or high value clientele?
USAID is pursuing a regional approach in supporting tourism development in Western Balkan. (www.balkansgeotourism.travel) From the viewpoint of international tour operators and tourists this approach makes perfect sense. Very few tourists would only travel to Macedonia, Kosovo or Albania and spend a week there, but the same tourists would consider travelling to and experience the three countries together for a week. To create regional tourist packages, sourcing the best of what the three countries can offer in sights, food, shopping, culture and nature, is certainly the way forward.
In a recent stakeholders survey, commissioned by the USAID funded Regional Economic Growth (REG) project, the following top constraints in the tourism sector were identified:
- Main constrain is the brand of the region as attractive destination for tourists;
- Border clearance time for tourists;
- Need for introduction of categorization of accommodation capacities and quality marking standards (including eco marks) synchronized within the region;
- Availability of competent workforce and need for upgrading labor competencies;
- Partly aversion for use of available technology in the sector, especially in auxiliary tourism services.
Any effort by donors and local businesses to improve the quality of tourism infrastructure, sights, accommodation and activities are consequently a good thing, and will contribute to reducing the identified constraints. However, with an increase in investments in the tourism sector, the expectations of an increase in the number of international tourists will grow.
Consequently, to further develop their respective tourism sectors, the next key challenges for Macedonia, Kosovo or Albania will be:
- how to increase the number of tourists in the off-season and;
- how to make the tourists stay longer?
It’s time to take a closer look at the international tourism market, to go beyond the traditional and what has been done until now, and stop doing more of the same, and instead identify current and future trends in the international tourism market to explore and develop.
It’s time to think bigger, re-focus and invest our efforts to accommodate and benefit from these emerging segments of the international tourism market. Here is one of them!
I can see the reader roll his/her eyes at hearing this. ‘Golf, are you joking, in the Balkans?!’ But wait, why not…hear me out, please!
If Turkey (http://golfturkey.com) and Bulgaria (on the Black Sea Coast (www.thraciancliffs.com) and at the Bansko ski resort (www.piringolf.bg)), and even Montenegro, on a mountain top, (www.rmgcc.me) have done it and are doing it successfully, why not in: (1) Three Lakes region of Albania and Macedonia; (2) along the Albanian coast, and (3) in close proximity to Pristina in Kosovo.
All the right elements are already in place in these three locations – climate, water, weather, soil, people, culture, hotels, restaurants, shopping and airports. Most important, with a large young population eager to be activated, a large expat community living in the region (even more eager to be activated!) and its closeness to key international markets, the demand for golf tourism is there. And by working together, as a regional initiative, much can be achieved through joint preparations, design, construction, management and international marketing.
The stereotype of golf as a sport for old men wearing colourful checkered trousers, being carried around the golf course by electric cars, is just that – ‘old’. And this out-of-date prejudice about the game of golf, and who plays it, is causing us to miss another significant business and economic development opportunity. Let’s roll out some facts to put golf tourism in perspective and hopefully convince you to give golf tourism a chance.
Golf is the largest sports tourism segment in the world, with over 60 million active golfers! In Europe, there are 8 million active golfers. In egalitarian Sweden there are now 500.000 active players, out of a population of 9 million! Golf is becoming a natural part of people’s life, especially at an older age. Rising life expectancy is on the side of golf, as one of the few sports you can play well into pension years. Let’s be honest, at what age do we stop playing football, running after tennis balls or flying down ski slopes?!
The top golf tourism destinations in Europe are the British Isles, Spain, Portugal, Italy and France. Together they hold approximately 51% of the market. Turkey is a fast moving, emerging golf market, where golf courses in the Belek region has been developed in the last 20 years as a deliberate strategy to expand the tourist season beyond the summer months. In 2010 alone, golf tourism in Turkey generated an income of €500 million! (For more on Belek golf tourism and associated real estate developments, see: http://www.youtube.com/watch?v=WW5q6VI_wjc)
Now, let’s look closer at the average golfer, as a tourist. Traditionally the golfer is a man (76% of the golf players), aged between 40 and 64. However, in Northern Europe, the number of women golfers is growing very rapidly. Senior citizens travel extensively and stay for weeks playing golf together. On average, the golfer plays minimum 8 times per year in the home market, even more often when travelling abroad. Golf is regarded as a relatively expensive sport, which in tourism market terms mean we are attracting the more affluent, high-value adding tourists.
Golfers travel more frequently, stay longer and spend 3-4 times more money than non-golfers! Normally, the golf tourist will spend 6 hours per day on the golf course (playing, training, eating, etc). This means there is a demand for other activities for another 10 hours per day. Suddenly, other economic and touristic activities such as wine-tasting (Radovec in Kosovo, Berat in Albania and Kavadarci in Macedonia), restaurants, cultural sights and shopping in nearby towns, come into play!
In Europe, golfers pay between €20-50 for a round of golf, or they pay a yearly golf club membership of about €400. The membership allows them to play as much as they want. There is often the option of corporate membership, as a Corporate Social Responsibility benefit for company staff, and it represents one way of financing part of the construction and management of the golf course.
To design and construct an 18 hole golf course requires approximately 800.000 square meters of land and access to water. In Sweden, it costs approximately €2 million to construct a golf course. There are now 500 golf courses in Sweden alone. In South East Europe, with much lower labour and construction costs than in Northern Europe, the total golf course construction cost can be expected to be significantly lower. However, this cost excludes the land, which in many cases, as in Bansko, Bulgaria could be the municipality’s investment in a Public-Private Partnership to construct and manage the golf course.
On average, it takes 2 years to build a golf course, and make it ready for play. The golf course is often part of a larger resort and/or real estate development (again see Belek in Turkey), including the following operations – clubhouse with reception, café, restaurant, golf shop as well as driving range, putting green and pitch & putt area for practice. At places the clubhouse is in conjunction with a hotel and conference facilities. In many places the golf course is an integrate part of a real estate development, adding ‘quality of life’ to the overall area, and hence adding value to the private properties.
Hosting hefty wedding parties is the largest income stream for the small, but centrally located golf course in Moscow, Russia. (http://www.mcgc.ru/en) This course was initially built to cater to a fast expanding expat community in Moscow, following the introduction of perestroika and glasnost in the USSR, but now attracts mostly members and players from the new affluent Russian upper middle-class. A golf course in proximity to Pristina in Kosovo would find a ready market within its very extensive community of international organisations and donor programmes, as well as among the high number of western-educated young Kosovars, the generally sport interested and the Diaspora.
The donor agencies, always keen to support tourism as a sector with potential to deliver both economic growth and employment, could kick-start the golf tourism development process in the region, in two specific ways:
On the supply side, raise awareness about golf and golf’s linkages to tourism and real estate development in particular as well as its immediate and long-term impact on employment and overall economic activity. This could be achieved by organizing tailored study visits to golf courses and resorts in Turkey, Bulgaria and Montenegro for interested representatives of public institutions (i.e. municipalities), private enterprises (real estate developers, hotel owners, and other prominent local businesses) and donor agencies.
The goal of the study visits should be to create a realistic picture of the opportunities and challenges associated with golf and golf tourism in the region among the participating stakeholders. Special attention should be given to addressing the financial models (cost of construction and maintenance versus expected incomes) by which the golf courses can become engines for sustainable economic development in the region.
Successful golf course and golf tourism development will require a public-private partnership approach, and preferably within a regional context. Golfers do not like to play the same course day in and day out for a week, but would be happy to travel between three courses, in three countries, enjoying the best local cuisine, wine, culture and shopping along the way!
On the demand side, the donor agencies could assist by commissioning a feasibility study on the potential for golf tourism in the three countries of Macedonia, Albania and Kosovo, as a regional initiative. The feasibility study should go beyond the supply side, and quantify the current and future market for golf tourism (profile of demand, pricing analysis, etc.), and golf real estate as a second home (market potential, unit selling prices, etc.), which is popular among Northern Europeans in countries such as Thailand, Turkey and Spain. The feasibility study should also include potential site and location analysis as well as analysis of supportive activities (how do we activate the entire family?).
In conclusion, I repeat three immediate benefits of golf tourism:
- It brings in a whole new tourism target group to the region. This target group is more affluent than any other, it will stay longer, and it is active with additional interests that open up sub-markets for new tourism services;
- It is an anchor-client for (1) real estate development, (2) long-term living solutions and services (Medical tourism);
- It is a long-term job creator (golf course and real estate construction, golf course maintenance, golf resort management, hospitality services, supportive services, indirect employment, etc.)
Can you think of any other tourism sub-sector with the same potential impact on economic growth, employment and the image/brand of the region?
And for the final sales argument for golf course development, please be aware that there is not one single golf course in Macedonia, Albania and Kosovo today! This region is the only blank spot on the golf map of Europe!
Whoever is first will corner the market!