Golf/country clubs: the drive for $1m memberships

It has taken coronavirus to make golf cool again. This sociable but socially-distanced outdoor participation sport is no longer dismissed as a good walk ruined. In Asia, golf club membership fees are soaring.

Membership of Singapore’s Sentosa Golf Club now costs $262,000 for locals and $372,000 for foreign golfers. Thanks to the pandemic, it costs 40 per cent more to play on the hallowed turf that hosts the Barclays Singapore Open and HSBC Women’s Champions.

In South Korea increases are more pronounced, especially for memberships costing more than $714,000. Prices have risen an average of 63 per cent in the past year. Membership of the elite Namchon Country Club has doubled in price in the past year to $1.1m.

Previously, Singaporeans made low-cost weekend golf trips to Malaysia. South Koreans favoured Thailand. As travel was suspended, golfers have raced to scoop up limited local memberships. Golfing also fits the bill perfectly when it comes to local restrictions, which limit the number of people that can join a gathering to eight people in Singapore and five in Korea.

Snagging a membership is just the first hurdle. Slots on courses are hard to get, especially at weekends. At the Singapore Island Country Club, the police launched an investigation into alleged use of bots to book tee times. Higher green fees and more spending on food and drinks has pushed operating margins to more than 40 per cent in Korea.

Equipment manufacturers are enjoying a renaissance. Shares of Hong Kong-listed club maker Honma were on a downward spiral for years. They have staged a strong recovery since their May lows, gaining 57 per cent. Over the same period, shares of Mizuno and Sumitomo Rubber Industries, which owns equipment company Srixon, are up more than 27 per cent. Off the course, virtual golf has started attracting a younger demographic.

For country clubs and golf clubs, higher pricing creates a virtuous circle. The loftier the bar, the greater demand will be from the status-conscious wealthy. Nothing says luxury quite like a $1m membership.