Golf in Vietnam — VietEcon

Golf. Just ugh, you know. Everyone hates golf right? Too bougie, too preppy, too exclusive and classist. But that’s the West, or the US in particular. In the US the number of golfers has fallen drastically from about 30m in 2006 to about 24m in 2017. That’s down more than 20%. The number of golf courses has fallen much less, it appears to me, meaning that each one is having problems getting enough paying customers and lots more are probably going to close over time. My mother-in-law used to live on a golf course in Arizona. It looked horrible, because they couldn’t get enough water to maintain the greens well (and they shouldn’t have), and it was losing money. The owners are finally selling it, and it will eventually be housing of some sort.

Europe will like trend with the US, at least parts of it. Participation actually increased in the US until 2009 but now is falling a bit every year, according to this EY report. The growth was likely mostly driven by eastern European countries that opened their economy. Not too many Soviet golf courses!

Vietnam is different. It’s a young country. They haven’t gone through the whole cycle of not knowing golf, then aspirationally playing golf, then hating golf and finally quitting golf. People are really trying to make golf happen in Vietnam. They see it as a luxury product that brings in wealthy people. So I wasn’t surprised to see an article today about how many golf courses are in development: 78 in place with another 43 in different stages of development. This is for a country that, according to a somewhat old (2015) FT article, has 10,000 golfers in total. That was back in late 2015, so even if it has doubled, that means 20,000 golfers. That’s 256 golfers per facility, and if we add in another 10,000 tourists, that rises to just 385. The US has 1,500 golfers per golf course, not counting tourists who come and play. That’s almost 4x the amount per course.

PHOTO BY MORGAN DAVID DE LOSSY @MORGANDDL

But building golf courses has been a trend all over the world. According to an R&A Report from 2019:

In the last twenty years there has been phenomenal growth in Asian golf, with Japan (3,169), Republic of Korea (798), China (599) and Thailand (315) now among the top-20 countries in course supply. Resort development has driven much of golf’s growth in this region.

That’s the crux of it. Many of these courses are built around real estate and resorts, rather than just golf on its own.

So it will be interesting to see what happens in Vietnam. China has seen a big boom in golf, but the government has shut down a number of courses that were illegally built.

I grew up playing golf, but I have always been bad at it, so take everything I say with a grain of salt. I do think there are some positives of golf, especially from an an economic perspective:

It can help real estate developers and also is very pretty. There is a reason why people like looking out over the links.
It can attract tourists. According to the FT article above, back in 2015 there were about 7,000 tourists playing golf in Vietnam. That could increase over time, especially as golf is taken up by more Chinese.
Sport is something that should be promoted. Golf is a sport (although sometimes I question it). It’s good to get out there and walk the greens, be outside, get some exercise.

On the negative side:

There is significant environmental issues around golf courses. Water usage is high, even for courses that work to reduce it.
Pesticide and herbicide usage is extremely high in order to maintain the pristine green color.
Mowing every day, which is what lots of golf courses do, uses a lot of fuel, and mowing equipment generally isn’t the most fuel efficient. Not to mention having non-native grass.
Where golf courses are built also matters significantly. The better locations (near the ocean, in beautiful forested areas) may entail destruction of the natural habitats of birds and animals.

One one hand for developers, golf courses may be a no-brainer. They really drive demand. In Egypt, which has a lot of developers building homes centered around new golf courses, the golf courses are just something to look at - once built very few people use them. In a country that is mostly desert, it looked amazing! Vietnam is differental in that it is already quite green, but the same concept applies: a golf resort feels like a world away from urban environments. It’s a way of taming nature that allows people to enjoy it easily.

I personally think golf courses are probably a bad use for the land. Big parks, with areas set aside for soccer, hiking, and other community activities, would be a much better investment. That doesn’t have the same appeal to developers, so we are probably going to see many more golf courses in Vietnam over the next few years.