The "Golden Goose" is in danger...
The Vietnam Government released figures stating that 2.1 million tourists visited the country in the first five months of this year, which represents a 16.6 % year on year increase. This is good news for the country as a whole, but can the local golf industry profit from this and help the tourism industry to reach even greater heights?
Unfortunately, tourism in Vietnam is fuelled primarily by the favourable dollar vs. dong exchange rate, as well as the uniqueness of Vietnam, but golf really isnít a major drawing card at this time. Hopefully, as time goes by, more and more courses will be built which will undoubtedly appeal to the Thai, Korean and Japanese tourists and, eventually the westerners as well.
The biggest problem is finding a way to do it without killing the Golden Goose.
Many golf course owners in Vietnam are inexperienced in this particular business, so they fall for most of the hype thatís out there.
Recently, it seemed that everybody and their brother rushed to get a golf course project licensed without really performing due diligence and understanding what their particular niche would be. Most felt that "if you build it, they will come" and this is just plain wrong.
There were announcements in the newspapers touting project which read something like:
"XYZ Joint Stock Corporation just applied for a license in Nha Que Province to set up a Nuclear Power Station and medical research facility. This project will have a 500 biggawatt (bW) reactor, a 200-km particle accelerator, medical research laboratory and a 54-hole international golf course..."
Interestingly enough, this is one of the reasons why the Vietnam Government lowered the boom on many of the would-be projects. If the wanna-be owners arenít realistic, then the Government has to be realistic for them and the fact of the matter is that Vietnam isnít ready for 150 golf courses. Hell, even 60 would be pushing the limits right now.
If you need proof, look at Thailand.
With over 200 courses, everyone touts Thailand as a "golferís paradise" and it is paradise to the players, but not to the golf course owners.
Itís estimated that less than 20% of the courses operating in Thailand are profitable while the rest are sucking wind and barely surviving. In fact, the only people really making money in golf in Thailand are the tour operators.
Another concern is location.
To be honest, the ideal location for a tourist-oriented golf facility is close to the ocean so the entire family can come for a holiday, which ensures more money flowing into the local community.
While golf courses in or around the cities can generate some tourist rounds as well, most would come primarily from visiting businessmen. City courses are usually frequented by the local golf community and the club members.
Vietnam is standing at the cross-roads and needs to be very careful about which plan it follows for the future growth of the golf industry. If theyíre smart and think carefully, they will ensure that everyone profits to some degree or another and the Golden Goose lives to a ripe old age.
Now, while many people disagree with a government involving itself in decisions of who can or cannot own a particular business, I would agree in most cases, but this isnít one of them for a very specific reason Ė land use and food security.
At present, Vietnam has a maximum of 4 Ė 4.5 million hectares of arable land remaining. This is land which would normally be used for agriculture, but is being snapped up by developers who cannot wait to build yet another housing project, industrial park or golf course.
It makes no sense to give away the ability to feed yourself.
As you all might have noticed, we are now experiencing what happens when an overheated economy is brought to a sudden halt by a dose of reality. People who bought and sold like there was no tomorrow are now panicking and screaming for the government to enact policies which will allow them to continue running amuck.
Now is the time to step back and reassess the future of golf development in Vietnam.
There is no doubt that we need a good assortment of courses in strategic locations and managed by experienced professionals to ensure a positive development trend, but we also need to have the golf courses working together in a nationwide marketing effort to attract international tourists.
I have no doubt that with more high quality courses like Montgomerie Links in strategic tourist locations, golf will help boost Vietnamís tourism numbers, but it should be a case of quality over quantity.
While the amount of golf tourists might be low in relation to the rest of the market, it should be remembered that golf brings in the type of people who are not afraid to spend a lot of money if they feel they are getting a fair value.
We should remember that its quality, not quantity that counts in golf.