Compared with the rest of the world, there is still a frenzy of golf course building in China. Provided to China Daily

Lee Schmidt says his company has designed 40 golf courses in China. Yao Jing / China Daily

After 20 busy years in China, the golf course design and construction industry is beginning to take things at a more leisurely pace

When Lee Schmidt started designing golf courses in China nearly 20 years ago, the first one in the country, Zhongshan Hot Springs, had just opened in Guangdong province.

"I was a senior design associate with Nicklaus Design, and I joined in the design work of the project," says Schmidt, who would later form the United States-based Schmidt-Curley Design with business partner Brian Curley, in 1997.

There are now 40 Schmidt-Curley designed courses in China, in addition to 110 in 24 other countries.

However, the seemingly boundless growth that those figures for China suggest may finally be tapering off.

The China Golf Industry Report of 2012, published by Forward Management Group, a Chinese company that covers all golf-related businesses, says that last year the number of golf courses in the country rose to 587. That represents an increase of 39 courses on the previous year - with a course opening every 10 days - from the 45 courses completed the previous year, and 52 the year before.

That means Schmidt, like many others in the golf course design industry, are going through a rough patch, but the enthusiasm of the designers, many of whom have their roots in the saturated and sagging markets of the US and Europe, seems to be largely undiminished.

"Compared with the rest of the world, there is still a frenzy of golf course building in China." says Timothy Trinka, president of the Asian Golf Industry Federation.

"But compared with two years ago in the country, it is certainly not as great as it was. Still, China is viewed as the market with the highest ceiling for golf growth and therefore golf course design."

The decline in the number of new courses is partly a product of the diminishing possibilities because of rocketing expansion over the past 10 years, and partly because of stricter government policies, introduced in 2004 to discourage courses in order to protect the environment, avoid bad investments and prevent land speculation.

News reports that often cite a supposed ban on building courses appear not to take account of the opaqueness of the rules and that they are administered at the provincial level.

Whatever the case, the very fact that the number of courses continues to grow belies talk of an outright ban, and designers are far from convinced that the explosion of golf's popularity in China is petering out. There are two figures they often cite for their continued optimism. The first is the number of players in the US, which they put at 30 million, and the second is the number of players in China, 1 million, in a country whose population is four times greater.

"The demand for certain types of courses, such as high-end or private membership clubs, has slowed down some," Trinka says.

Just as the game's aficionados look at population figures to bolster their optimism for the game in China, they also look to 2016, when the Olympic Games will be held in Rio de Janeiro, Brazil, and when golf will make a comeback after an absence of 112 years from the Games. They are looking for that exposure to give the game a worldwide fillip. In China, too, they are pinning their hopes on a growing middle class looking for a healthy outdoor activity.

"As the markets continue to grow and mature, golf course designers have to become more responsive in providing designs that make more economic sense, are more sustainable from a maintenance standpoint and provide a high degree of challenge for golfers of all levels," Trinka says.

Schmidt is also adjusting his marketing strategy in the country.

"Before 2010 we focused most of our attention on Mission Hills, and we've done 20 projects for Mission Hills out of its total 22 golf projects in China."

The company has expanded into other developments to look for more opportunities, such as Stone Forest in Kunming, Yunnan province, and White Stone Hot Spring Golf Club in Hainan province.

As the China market increased to account for a third of its business, in 2007 it set up Hainan Schmidt Curley Golf Design Co Ltd, and at present is designing or building 10 projects.

"The biggest challenge for us is government policies because it is difficult for developers to get a permit to build a golf course," Schmidt says. "But regulations making the industry healthier are welcome. The most important thing is that the demand for golf is there in China."

Trinka says: "It appears that the government is trying to enact rules and regulations to provide better control. This will in turn make developers more responsible for the projects that they develop and create, to be both financially and environmentally sustainable."

Using an international designer adds to the prestige of a club, he says.

"They often have a better understanding of the game's subtleties, shot values and game strategies that would be necessary to challenge the very best players in the world."

Schmidt's former employer Nicklaus Companies of Florida, founded by Jack Nicklaus, designed the first course in China and has opened 15 since then. It now has 15 under construction. Worldwide it has designed about 380 courses.

"Sometimes it is difficult to get the developer that we work with to follow our instructions," says Samuel Silverman, director of corporate strategy for Nicklaus Companies. "Chinese construction companies lack experience in building golf courses as we just do the design and partner with construction companies."

Developers are also an uncertain quantity for Gary Player Design in the US, the firm of the South African great Gary Player.

"We do the design, but we are not sure whether the project will be built because the developer decides they do not have enough money or do not get approval for the land," says Justin Downes, of Gary Player Design in China.

With half of the projects the company has worked on in China the designs have gone no further than the drawing board. The 12 courses that it is now designing or building include Jinji Lake Golf Club in Suzhou and Sand River Golf Club in Shenzhen, Downes says.

Downes, who has run the business in China for three years, says he has seen changes in the market.

"Developers are more interested in the profitability of the golf business now. They are realizing that they have to keep the quality of a course and want to make money in the long-term, not in the short term as before."

In fact, design done with an eye to the long term and high-quality construction brings the costs of upkeep down because grass, soil and trees do not need to be replaced as often.

In the past, developers were intent on making as much money from memberships as soon as possible to cover the cost of construction, with no regard to the attractive proposition of drawing and retaining long-term members, Downes says.

In addition, Downes says, the trend now is to create attractive, viable communities and activities around golf courses so that the game itself is not the be all and end all of the project.

Such activities include entertainment, real estate sales, weddings and conventions.

Although the Chinese government is very cautious in developing the golf industry, he says, he is optimistic about his business and that China, which now accounts for 20 percent of its business, will eventually account for half.

"We are just doing three to four projects every year in China, therefore we are not affected by the overall state of the industry."

With the complex process of building a golf course, Western consultants who thoroughly understand the game stand to benefit in a market in which knowledge and expertise has not had time to fully develop.

"I think China is a young market, and there is a lot of learning going on," says Tony Cunzio, vice-president and general manager of Flagstick, a US golf course construction management company.

"In China, it is much more difficult because the developer or owner has never done that. In the process of building a golf course, there is a lot of engineering, architects, etc. We are trying to help project owners and golf course architects build great golf courses."

Flagstick set up a Chinese branch in Kunming two years ago as its business in China grew. It is now working with Nicklaus Design on Dali Reignwood, a 36-hole-course in Dali, Yunnan province; is a partner with Gary Player Design in Longping Jinhua Sports and Leisure Park in Changsha, Hunan province; and is working on another 11 projects in China.

"Growth in China has actually been steady in the past two years but it was very fast four or five years ago," Cunzio says.

China still accounts for more than 60 percent of Flagstick's business, he says, and with Western markets in a lull, he sees China as a good bet for growth.

"There is a lot of hesitation due to the regulations or the direction of the government or the economy. But I think it is a very active market as the interest for golf in China is very high."

yaojing@chinadaily.com.cn

(China Daily 04/26/2013 page12)