Session 1: GOLF AND THE ECONOMIC ENVIRONMENT MEETING THE GLOBAL CHALLENGE

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Session 1 GOLF AND THE ECONOMIC ENVIRONMENT -
MEETING THE GLOBAL CHALLENGE
Steven C.M. Wong Assistant Director General ISIS
Malaysia steve_at_isis.org.my
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• OUTLINE
• How does the global economic crisis impact
  leisure activities?
• What are the immediate and medium-term
  prospects for the global economy?
• What are the immediate and medium-term
  prospects for the Malaysian economy?
• What are some implications for golf managers?

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• How does the global economic crisis impact
  leisure activities?

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• 1. How does the global economic crisis impact
  leisure activities?
• Income effects, i.e. nominal (money)
  discretionary incomes prices matter bonus
  payments gross national income
• Wealth effects, e.g. share portfolios, unit
  trusts, bonds, land value (esp. retirees)
• Changed employment status unemployment
  part-time emigration/immigration
• Personal corporate expense curbs, decline in
  corporate sponsorships
• Government policies positive/negative fiscal
  impulses borrowings

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• What are the immediate and medium-term
  prospects for the global economy?

International Monetary Fund, 22 April 2009
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• What are the immediate and medium-term
  prospects for the global economy?
• Greatest economic crisis in modern history
  probably averted through financial bail-outs and
  demand management
• But V-shaped recovery?
• Depends on effectiveness of government stimulus
  packages
• Height of the bounce?
• Many problems still not resolved
• Toxic financial assets
• Income and wealth destruction
• Record budget deficits, debt overhang excess
  liquidity levels, etc.

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• What are the immediate and medium-term
  prospects for the Malaysian economy?

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• What are the immediate and medium-term
  prospects for the Malaysian economy?

- Active Job Seekers - 3Q08 88.7 4Q08
109.0 1Q09 130 (Est.) - Bank Loans Approved
- 3Q08 -1.2 4Q09 -23.7 1Q09 -26.6
(Jan-Feb)
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• What are the immediate and medium-term
  prospects for the Malaysian economy?

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Second Stimulus Package RM60b
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• What are some implications for golf managers?
• Economy has declined sharply as expected.
  Expectations are for recovery but no clear
  evidence that it will bottom-out soon
• Recovery will first be signalled by pick-up in
  exports and this is not expected for at least 2 -
  3 quarters
• RM60bn mini-budget is seen by most to have
  positive but limited cushioning effect on
  economic growth (bet. RM5-7b of additional fiscal
  stimulus must be injected in 2009)

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• What are some implications for golf managers?
• Challenging business environment through most of
  2009 and possibly into 2010 V-shape recovery
  is possible but not likely
• Business consolidation and rationalisation are
  underway in many sectors (Are golf clubs
  vulnerable?)
• Top-end facilities will probably be cushioned by
  players affluence but others could find it very
  tough and unrewarding
• Like most leisure (discretionary) activities, new
  and creative marketing strategies will probably
  be needed

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• What are some implications for golf managers?
• Club finances need to be strong be realistic -
  more debt is not the answer maintain positive
  net equity
• Manage business cash inflows outflows do not
  overtrade (maintain profit margin-asset
  turnover-gearing balance)
• Use down-time to sharpen competencies and master
  new skills (e.g. IT, language, etc) invest in
  new relationships
• Demonstrate ownership in the workplace put in
  more than you take out offer help where needed,
  not when asked

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• What are some implications for golf managers?
• Is cutting back on course service quality
  counter-productive given the high income market
  segment being catered to?
• Can more be done to increase revenue yields
  through direct cross-selling and promotion
  strategies?
• Would increased value-added services, say through
  ICT, be a viable way of attracting and retaining
  client communities?
• What about packaging memberships with Malaysia My
  Second Home (MM2H) programme?
• Should more be done to introduce developmental
  aspects such as golfing as an elective subject in
  universities?

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THANK YOU!