From my vantage point outside of Shanghai I am starting to see indications that the financial tsunami (金融海啸) hurting the entire world are starting to be felt very deeply here in China. Many of my club's members are Koreans and have been hurt badly by the Korean market collapse; also we seem to be seeing fewer guests accompanying members who do come to play. November turned out to be a fantastic month but now the colder weather is taking a toll -- certainly we are expecting a challenge to keep our numbers even in 09.
Despite what you have heard from many designers, all of the evidence I have is that much of the Chinese golf industry has been in a lull at least since the beginning of 2008, and the major resorts are all hurting. Recently Mission Hills (观澜湖) cut 30% of the staff after lackluster 08 performance. I have heard rounds are quite low currently at Spring City(春城) and Yalong Bay (亚龙湾), two of the main leaders in the industry. Have also heard of challenges in the Guangdong region at a leading resort. At least one new club recently opened in the Yunnan region called Skyait is in bankruptcy and has shut its doors, and I have heard of others going under in Guangdong.
I believe the industry may have become overextended although there are "only" around 300 courses operational in China. These are some trends I have noticed:
1) Clubs are becoming very aware of the importance of annual dues. Most annual dues are still only about $1,250-2,500/year, but they were not seen as primary income vehicles until recently.
2) Club owners are finding that it is extremely difficult to support the extensive infrastructure at most clubs: multiple courses, large clubhouses, maintenance demands, landscaping fees, etc.
3) The combined burden of sales taxes, forest taxes and land taxes are REALLY hurting the bottom line. The government has lowered the tax rate on golf club sales and golf ball sales to 10% this year, but the course owners are not getting any relief.
4) A lack of native Mainland Chinese players exists to support the current number of clubs; there are certainly too few to support the next round of expansion.
5) Increasing openings at a few key locales (Hainan Island, Qingdao/Shandong and Kunming) may have hurt everyone, with too many courses trying to share the pie.
6) Real estate. A huge problem here too as prices are falling in most markets and most clubs have a housing component.
7) Beware of the membership numbers. There is a definite difference between the number of memberships sold and the number of active members at a given club. Many people bought multiple memberships at various clubs like stocks. The number of such speculators will certainly decline as people protect their cash in the coming year, dampening industry growth.
I'd love to hear any more news from you about Asia, China, Korea and Japan in particular.
Thanks and Happy New Year (Year of the Ox! It kind of feels like it will be that kind of year, eh?) ~