Investors Consider Golf Potential Business in Vietnam

Investors Consider Golf Potential Business in Vietnam 

Many investors, mostly foreign, are focusing on projects to develop golf courses in Vietnam, particularly in the North, thanks to the country’s international integration, a strong growth of the tourism sector in recent years, convenient geographic location and beautiful landscapes, and the great attraction of the emerging sport for Vietnamese players.

Apart from the first two famous golf courses of King’s Island in Ha Tay province and Chi Linh Star Golf & Country Club in Hai Duong province available for play at present, many others are under construction or going to get licenses to be built soon. The projects underway are located in the northern provinces of Hoa Binh, Ha Tay, Vinh Phuc and Quang Ninh, and in Soc Son district in Hanoi. Some of these new golf courses are expected to become operational in 2006.

Notably, after the Government approved the cultural eco-tourism project in Soc Son district in Hanoi, three investors have been asking permission to build golf courses. In addition, the Urban Construction and Development Holding Co. early this March kicked off construction of the 80.73-hectare Dam Vac golf course and Mau Lam Garden Villa Area in Vinh Yen town, Vinh Phuc province, 40 kilometres from Hanoi, with a total investment of US$25.47 million. The project is expected to become operational in 2008, said the company’s director Mac Anh Tuan.

The Ministry of Planning and Investment has recently licensed the 54-hole Dragon Mountain Golf Course Project in Luong Son district, northern Hoa Binh province, invested by Charmvit Group of Korea. As planned, the first phase with 18 holes of a 36-hole course will be completed by the end of 2005 and the whole course of Long Son project will be fully finished in 2006.

This is a common trend of every developing economy and the injection of huge investment in golf projects is now regarded as a potential business in Vietnam, stressed golf experts and investors. Let make a comparison with other countries, the strong development of the sport in Vietnam is a matter of course. There are 100 golf courses around Thailand’s Bangkok, 2,300 in Japan, and 20 in Singapore – the country with a total area of only 600 square kilometres. Particularly, Korea is home to about 6 million golfers at present and 200 golf courses surround Seoul.  

The boom in golf courses with the world class facilities, the reasonable prices of tourism services in Vietnam, and the friendly good nature of the Vietnamese people are now making foreign tourists consider Vietnam an ideal golfing destination both in the region and internationally. Especially, the investment trend will certainly make the average fee for this luxurious service fall considerably over the next 2-3 years when newly-invested projects become operational and the quality of golf-related services will be much better due to the fierce competition between the current courses and new ones.

There are 10 golf courses available for play in Vietnam currently, and to date, 17 golf projects have been licensed across the country, of which seven are under construction. The Vietnamese Government and local authorities have created favourable conditions to investors in this field, however, some underway projects are now facing site clearance problems.

Following are ideas of golf experts:

Newly invested golf courses in the North - Good news for Vietnam in general

Lars Holden PGA, General Manager of Chi Linh Star Golf & Country Club

With so many investors coming to Vietnam this will generate a lot more interest in the country as a golfing destination. My only concern is whether we have enough local players to maintain a healthy competition for all the clubs. It is my belief that we need to pay more attention to local Vietnamese golfers as they will be the deciding factor on how many projects can prosper. Offering golf at affordable prices is also important along with training facilities to help generate interest in the sport.
With Vietnam such a popular tourist destination I am confident that their will be room for more courses however the growth should be monitored so that the country does not make the same mistakes as other Asian countries which struggle to attract enough golfers.

The construction of golf courses is only the start of what is possible when working in the golf development business. To offer housing, sports (tennis, swimming etc.) and other activities widens the interest of potential customers and gives you more scope for attracting clients. Furthermore, these types of facilities are lifestyle related and everyone wants a better standard of living and there is known better environment to live than on a golf course.

Regarding their impact on Chi Linh Star Golf, this is still to be determined. However, our plans include providing what all of these other investors are proposing. We have plans for three hundred houses, tennis, and swimming along with our thirty six holes of international standard golf. It is our plan to make Chi Linh Star Golf the ultimate Country Club facility. More importantly, the membership base of these clubs needs to be high to ensure enough revenues to survive. Currently we have nearly one thousand members, which is a very strong position to be in. As I stated before the other clubs will need to generate interest in golf with the local Vietnamese to ensure a healthy investment.

New courses mainly target foreign players 

Chau Dien Hai Nam, Head of Project Consultant Department of Investconsult Group

The Vietnamese market with a population of more than 80 million seems not to be a major target of golf investors. In fact, main customers of such golf courses are a large number of foreign businessmen, politicians, and tourists who have been working in Vietnam or coming to the country, and the number is sharply rising annually. Vietnam’s integration into the world economy is one of the major reasons for the phenomena. Together with the country’s joining to the World Trade Organisation and the implementation of the Vietnam-US Trade Agreement in the near future, the number is estimated to remarkably soar. 

The boom in golf courses in the North, only 50 kilometres far from Hanoi capital, will certainly create a fierce competition in terms of services and management capacity. Chi Linh Star Golf & Country Club is a typical example of success because it has paid great attention to the quality of services and the professionalism although it appeared later than the first course King’s Island in Ha Tay province. More importantly, we are offering investment consultant services to the 54-hole Dragon Mountain Golf Course Project in Hoa Binh province that is expected to be the most luxurious in Southeast Asia. This is considered the course’s right track.

Vietnam benefits great advantages of landscapes and geographic location to develop not only golf courses but also subsidiary services such as high-class resorts, entertainment activities and slot-machines. If the country does not take the chance, we will be left far behind the regional nations of Thailand, Malaysia and Indonesia in this field.  

Lower fees, more golfers

Nguyen Manh Hung, a golfer in Hanoi

The number of local golfers will sharply rise in the coming time because the sport is suitable with health and patience of Vietnamese people, the economic growth will be higher and fees will dramatically fall in general. However, some courses still remain high fees to play due to their professional manner and strong reputation.

High costs to play, US$55-80 per player/time on average, are blamed for few courses, partly leading to a limited number of 3,000-4,000 golf players in Vietnam, of which many come from foreign countries. Therefore, it is necessary to open more new ones to make a healthy environment and reasonable charges compared to regional countries, for example, US$20 per non-member player/time in Thailand and US$5-7 per time in Myanmar.

• The Nam