Staying on course

Is golf the answer for Scotland's depressed tourism industry? Bob Gledhill reports.

There were some sharp intakes of breath in Scotland when wealthy American golf fans Don and Nancy Panoz announced that they intended to spend £50m to build a golf resort in St Andrews, on the windswept east coast. With Scottish tourism showing signs of stagnation or slight decline, and already 540 golf courses in Scotland, did the country really need another golfing hotel with two courses?

Susan Grant, golf tourism development manager with VisitScotland, formerly the Scottish Tourist Board, has no doubt that the answer to that question is a definite "yes". She says: "We are putting a huge effort behind golf tourism in Scotland. Investment in golf marketing has gone up fivefold in the past few years. Our estimates are that golf earned £100m in tourism last year, and £28m of that was from overseas."

It is figures such as these that help to convince Daniel Schurr that far from reaching saturation point, demand for golf hotels and golf courses in Scotland is still rising. Chicago-born Schurr - sales and marketing director of the Panozes' five-star St Andrews Bay hotel and golf resort, which is now three months old - says that being located in the spiritual home of golf is a magic selling tool. He explains: "When you are selling to the North American market and you say ‘St Andrews', it is a key that pops open a lot of doors."

The first of two planned championship-standard golf courses in the grounds of St Andrews Bay will open in September, and the second will follow in 12 months' time.

The hotel has 209 bedrooms, including 17 suites, plus a spa, a 106-seat auditorium, nine meeting rooms and two boardrooms. The hotel claims that it has the most extensive conference facilities in Scotland outside Glasgow or Edinburgh, and that is because the Panozes recognised from the concept stage that golf courses have the versatility to appeal to both leisure and business tourism. Room rates start at £150 a night but Schurr says that it is impossible at this stage to predict occupancy.

So far, however, he has been encouraged. As proof of the global pulling power of the St Andrews name among golf-mad executives, within days of the hotel opening in June its first international conference had taken place - a US power company shipping in 300 delegates from 80 countries.

Yet, while St Andrews Bay is an impressive development with a magic marketing tool - location - the reality is that the area is already saturated with golf courses. As well as the legendary Old Course itself, which regularly hosts The Open, there are nine other courses around the town of St Andrews and an additional 11 within 15 miles.

Furthermore, despite the enthusiasm among both hoteliers and Scottish tourism agencies for the value of golf-based tourism and business travel, they are not alone in Europe in seeking this business. Ireland, Spain and Portugal are the other big providers of golf-based tourism. Of the three, Ireland is Scotland's keenest competitor, particularly for transatlantic dollars - and there's a lot of them, with the average US golf traveller spending well over £1,000 on a golf trip to Europe, not including travel and accommodation.

VisitScotland's Grant concedes that, to US golfing eyes, those contemplating a no-sun golfing holiday perceive the Irish and Scottish products as being similar. This is reflected in the fact that Ireland earns a similar amount of tourism revenue to Scotland from golf. "I think what happens is that US visitors rotate between us and Ireland," says Grant. "If they come to Scotland one year, they will go to Ireland the next."

Budget for promotion
She is also mindful that the Irish marketing budget for golf promotion is far higher than the £500,000 she has to spend annually, a figure that, until a couple of years ago, was a woeful £100,000 on a piece of tourism earning £100m. And, of course, the strength of the pound puts Scotland at a disadvantage in relation to the punt.

And while pulling a caddy-cart around a Scottish course between spring and autumn might make a bracing change from the summer swelter of their own courses, come the colder months, are US golfing travellers willing to tee-off in the depth of a Scottish winter when they can go instead to the more temperate climates of Spain and Portugal? When a resort hotel with huge overheads needs revenue for 12 months of the year, not eight, this is arguably the Achilles heel of the Scottish tourism golf strategy.

Rosemary McLellan, sales and marketing manager for the hotel on the Carnoustie golf course, is certainly far from bullish about the appeal of winter golf in Scotland. Room rates for dinner, bed and breakfast are £159 in the summer and include a round of golf, but there are no golf packages in the winter. McLellan points out that golf hotels have to look for ordinary conference business in the middle of winter, with few golfers happy to spend three hours in a biting wind off the North Sea.

VisitScotland sees it differently, says Grant. She is frank about the marketing challenge in winter, when there are fewer daylight hours, biting winds, frost and snow, compared with sunshine and shorts in southern Europe. "Winter golfing tourism in Scotland is a short-break market," she says. "There are 100 links [coastal] courses in Scotland and they are rarely closed in winter. The St Andrews winter golf package was completely sold out last year. Golf-based hotels such as Murrayshall [in Perth] are really busy with short-break winter golfers from England."

The sharpening of attitudes towards golf tourism in Scotland took place last year in an initiative funded jointly by VisitScotland, the Scottish Executive and the Bank of Scotland, which began with a policy document on the new strategy for Scottish golf tourism. That strategy led to the setting-up of a distinct marketing department within VisitScotland just for golf tourism, with a clear set of targets and a development strategy.

At the heart of this strategy is a push to have more golfing events during the year, to give a focal point for golfing trips. The jewel among these is the bid to host the Ryder Cup at Gleneagles in 2009. This USA-versus-Europe tournament takes place every two years and is due to return to Great Britain in 2009. The Bank of Scotland has recently published research findings which indicate that beating off the rival bids of Slaley Hall in Northumberland and Celtic Manor golf resort in South Wales could generate £200m for Scotland, and while that includes every aspect of the event, from tourism to television income, a large slice of it would go into tourism revenue.

Such is the level of commitment to winning the 2009 Ryder Cup bid that tiny Perth Airport, close to Gleneagles, is planning a £1.5m runway extension to accommodate the private jets that both professional players and wealthy, golf-hungry amateurs now use to fly from one course to the next around the world.

The double-bogey in Scotland's golf development strategy this summer has been the downturn in the US economy. Visitors from the USA have also been put off by the strong pound and by unfounded health scares surrounding foot-and-mouth disease. Grant says the latter may have persuaded many US golfing tourists to visit Ireland this year rather than Scotland. "But," she adds, "while foot-and-mouth has had a huge effect on golf tourism in Scotland, we have not experienced the mass cancellations that more general tour operators have experienced."

At this time last year, VisitScotland declared a goal of 3.3% year-on-year growth in income from golfing tourism. Grant now says that the best it can hope for in the circumstances is to maintain existing levels, but she is confident that, as the memory of foot-and-mouth fades, the golfing tourism figures will once more start to rise.

Golf tourism in Scotland

Income: £100m a year, £28m from overseas
Number of golf resorts: 11
Number of golf courses: 542
Average spend of overseas visitors (excluding travel and accommodation): £1,250
VisitScotland marketing spend on golf: £500,000
Web site:www.scottishgolf.com