'Corona Special' Golf "Domestic Instead of Overseas? Early Effect of 3.1 Trillion Won Domestic Demand"

[Asia Economy Reporter Kim Hyewon] Amid restrictions on overseas travel due to the novel coronavirus infection (COVID-19), an analysis has emerged suggesting that if people who intended to go on overseas golf trips engage in golf activities domestically instead, it could generate an economic effect of revitalizing the domestic market worth up to 3.1 trillion KRW.

The Hyundai Research Institute stated this in its economic weekly report titled 'Rediscovery and Implications of the Golf Industry,' published on the 18th.

Economic Value of the Golf Industry = Domestic Market Revitalization Effect up to 3.1 Trillion KRW

Based on the 2017 Korea Golf Indicators released by the Korea Golf Association, Hyundai Research Institute estimated that the current population engaged in overseas golf activities ranges from a minimum of 2.15 million to a maximum of 2.2 million annually.

Adding last year's inflation rate to the average expenditure per person of the overseas golf activity population in 2017, the institute estimated that the recent average expenditure per person for overseas golf activities ranges from a minimum of 1.01 million KRW to a maximum of 1.43 million KRW.

Multiplying the overseas golf activity population by the average expenditure per person results in an economic effect of domestic market revitalization ranging from a minimum of 2.2 trillion KRW to a maximum of 3.1 trillion KRW.

The golf industry is also benefiting from the COVID-19 special situation. Hyundai Research Institute stated, "Due to restrictions on overseas travel caused by COVID-19, an influx of the overseas golf activity population into the domestic market is expected," adding, "According to statistics from the Korea Golf Association, the population aged 20 and over engaged in overseas golf activities increased from about 569,000 in 2007 to about 2.112 million in 2017."

Scale of Intercompany Investment in Golf Course Operation Business = More than 8.4 Times Increase Since 2016

Hyundai Research Institute also projected future growth based on last year's market size of 4.5 trillion KRW in sales for companies classified under the 10th Korean Standard Industrial Classification 'Golf Course Operation Business' and 2.2 trillion KRW for the 'Golf Practice Range Operation Business,' forecasting that the golf industry size will grow to a total of 9.2 trillion KRW by 2023.

The institute evaluated, "Domestic golf course operation businesses have seen a steady increase in investment over the past five years as mergers and acquisitions (M&A) and strategic investment values have increased," adding, "The total disclosed value (tentative) of major golf course M&A and strategic investment deals recently proposed is about 780.1 billion KRW."

In fact, domestic golf course operation businesses have experienced a steady increase in investment over the past five years due to the rising value of M&A and strategic investments. The scale of intercompany investment in golf course operation businesses has increased by more than 8.4 times since 2016. The size of M&A and strategic investment in domestic golf courses was about 160.1 billion KRW in 2016 but has expanded to about 1.3 trillion KRW this year, according to the analysis.

Senior Researcher Park Yongjeong of Hyundai Research Institute diagnosed, "Despite the real economic shock caused by COVID-19, the golf course operation business has experienced a relatively small impact compared to other sports or service industries," adding, "The development of the domestic golf industry is expected to have significant economic ripple effects on related industries such as travel balance improvement, employment, construction, and distribution, and furthermore, it is anticipated to greatly contribute to revitalizing regional and domestic economies." He continued, "It is necessary to prepare strategies for creating industrial value and sustainable growth in the future," adding, "Efforts to strengthen product competitiveness, such as domestic production of golf equipment that currently depends heavily on imports and development of new products reflecting global trends, are also urgently needed."

This content was produced with the assistance of AI translation services.