Can Greece tee off?

Athens conference on opportunities and potential traps in Greece's untapped golf course market

Developers, investors and operators of golf courses have been told at a November Athens conference what an estimated 61 million golfers around the world already know -- that business is booming and is set to continue doing so. This comes at a time when Greece is looking to attract investors into its fledgling golf industry to create new golf resorts and extend tourism beyond its current sun and sea destination image into a more lucrative all-year-round sector.

"Golf real estate and resorts have become major factors driving property development in the United States, Spain and Portugal," Stratos Papadimitriou, chairman of the Hellenic Centre for Investment (ELKE), told a European Golf Investment and Real Estate conference and exhibition in Athens.

"Greece can be the destination for teeing off and not just coming for summer activities such as swimming and sailing," Papadimitriou said. "It has all the prerequisites for the great game of golf to be played all year round."

With only six courses, Greece is seen as an untapped market for golf course development. By contrast, Spain has more than 270 golf courses and it is estimated that golf generates more than $3 billion annually in total revenues in that country.

Big business

Golf and related businesses in the United States, the world’s leading market with an estimated 40 million golfers and 17,000 golf courses, accounts for about 6% of Gross Domestic Product, coming in above gambling, motion pictures and mining.

It's also big business in the European Union. Europe has an estimated 8 million golfers playing at 6,500 golf facilities, with Britain, France, Germany and Sweden accounting for 69% of all golf courses and 67% of all registered players. The number of European golfers is growing at about 7% annually, with Norway currently the fastest-growing market.

Golfers also tend to be higher-end tourists, spending more, while a range of complimentary services and businesses, in addition to golf courses, prosper form the millions of golfers, their spouses and families, who take golf-related holidays. The proportion of regular golfers taking golf holidays ranges from 25% in the UK to 50% of Germans, with both groups favouring sunshine destinations such as Spain and Portugal.

The harsh reality for Greece, however, is that most existing golf courses are lacking and unattractive to potential overseas visitors when compared to top notch European courses, and Greeks -- without a Tiger Woods or Seve Ballesteros -- have little interest in one of the world's most popular sports.

"Golfers are a big power and are very organised, but here in Greece, we only have 1,500 people who play golf," said Yiannis Patellis, former president of the Greek National Tourist Organisation (EOT). "It's a sport that hasn't yet been developed here," he said, adding that most golfers are aged 45-65 and tend to travel in months that particularly interest Greece, which is seeking to attract tourists to new types of holidays, such as eco-tourism, religious or sports tourism, all year round.

Greek golf developments

Greece currently has five full 18-hole golf courses -- one in the Glyfada suburb of Athens, one on Kerkyra (Corfu), one on Crete, one at the Porto Carras luxury hotel complex in Halkidiki, northern Greece and one on Rodos (Rhodes), said to be in a state of disrepair.

A number of new golf courses are in the planning stage, with the most ambitious proposed development by the UK’s Loyalward Group involving a 750-million euro investment on a 26-square-kilometre integrated resort destination in north eastern Crete. The Cavo Sidero year-round development, which will create 3,000 new jobs on Crete, will encompass two 18-hole golf courses and one nine-hole course, along with watersports, shooting, tennis and arts and entertainment facilities.

The Crete Golf Club, another modern golf development on the Iraklio peninsula, took three years to prepare, but only 18 months to build a new 18-hole golf course. Businessmen and top local hoteliers allied in a 20-million euro investment that, after overcoming bureaucratic obstacles, eventually proved to be feasible and profitable, while also helping to increase luxury hotel bookings in the area by 20%.

With fine weather for most of the year, Greece is looking to extend its busy summer tourist season beyond the traditional months of July-August-September, which account for about 50% of tourist arrivals, by seeking to attract golfers.

"There are fears that private investments, especially in the real estate field, will dramatically slow down after next year’s Olympic Games," said Napoleon Tsanis, chief executive officer and president of Australian-Greek company Albatross Investments and Developments.

"Golf and real estate, a growing sector in Europe and a new starter in Greece, will be key elements in maintaining the economic growth experienced prior to the Games, while at the same time establishing a long-term viable solution to year-round tourism," Tsanis said. Though he conceded that getting development approval for golf resorts in Greece can be quite tedious, adding that the government must recognise and adopt the importance of golf in a thriving economy.

"Golf represents an opportunity for Greece, but unless there is the political will, we won’t see a better future," said Georgios Drakopoulos, general manager of the Association of Greek Tourist Enterprises (SETE). Most experts agree that easily accessible, well-designed multiple golf courses, combined with other attractions such as spas, are required to lure year-round golfers.

Obstacles exist

However, apart from the large investments required to acquire land and develop state-of-the-art golf resorts, extensive bureaucratic hurdles also discourage many potential investors, making ambitious hopes outlined by SETE for 46 Greek golf courses by 2010 unrealistic.

To create a new golf course, separate approval is needed from the development ministry and national tourist board, before screening by archaeological authorities, forestry department and environmental authorities, while even after this, a host of other bureaucratic hurdles have to be overcome. Moreover, local authorities and planning officials are often poorly informed about the variety of constantly-changing laws and procedures concerning development, while land ownership can also be complicated in Greece, making it difficult to find large sites suitable for golf developments.

Finally, the issue of sufficient water, often a valuable commodity in Greece, must also be faced, though this -- as seen in numerous successful golf resort developments in the Middle East -- can be overcome, with lucrative all-year resorts resulting when the latest technology is combined with well-managed, intelligently-designed golf developments.

Source: Greece Now (December 29th, 2003).

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