[비즈한국] #1. CEO A, who manages multiple listed companies primarily in the entertainment sector, is recently mobilizing funds to attempt a golf course acquisition. The estimated budget is around 100 billion won. The plan is to acquire a decent golf course if one appears as a distressed asset in the metropolitan area.
2. CEO B, who made a fortune in the virtual asset business, is also contacting various parties to acquire a prestigious golf course in the metropolitan area. CEO B has a strong determination to acquire a "prestigious GC," even if it means paying a premium.
The Korean golf industry, which enjoyed its golden age during the COVID-19 pandemic, is now reeling. Recently, there have been a series of attempts to "acquire golf courses," viewing the industry crisis as an opportunity. Just as the hotel industry saw a string of acquisitions when it wobbled due to a "sharp drop in travelers" during the pandemic, there is speculation that golf course transactions may increase amid the industry's downturn. While golf course transaction prices have not yet dropped significantly, meaning a strong buyer's market hasn't fully formed, it is said that many are willing to acquire if the price is "reasonable."
With various costs like green fees and caddie fees soaring well over 100,000 won, the number of golf users is trending sharply downward. According to the "2023 National Golf Course User Status" report released by the Korea Golf Course Business Association last year, the total number of users at 522 golf courses with 6 holes or more nationwide was 47.72 million in 2023, a 5.7% (2.86 million) decrease compared to the previous year. Last year saw a decline of over 10%, and the prevailing outlook is that the downward trend in users will continue this year as well.
The cause is the high cost. During the COVID-19 pandemic, as the number of people visiting golf courses surged, everything from clubhouse food prices to green fees, caddie fees, and cart fees rose one after another. Given the recent rapid inflation and economic contraction, analysts say it is a natural trend for the golfing population to shrink.
Wealthy individuals and major corporations believe now is the time to acquire golf courses. A prime example is Megastudy215200 (Mega BMC). Megastudy entered the golf course business through its subsidiary, Mega BMC, investing hundreds of billions of won over the past two years to acquire three golf courses. In March 2023, it acquired Lotte Skyhill Gimhae CC (now Gimhae Powel CC), which was owned by Hotel Lotte; last year, it acquired Taeyoung Group's Luna Hills Anseong CC (now Anseong Powel CC); and earlier this year, it acquired Princess GC from TS Corporation001790.
It is said that among recent golf courses, those that successfully moved upmarket remain popular, while those that failed are seeing poor "performance," leading to severe polarization and widely varying prices.
CEO A mentioned, "While expensive courses can go for over 10 billion won per hole, I am attempting acquisitions based on the judgment that less popular courses can be traded for around 6 billion won amidst this polarization," adding, "I still think the price range is high, but I am keeping a close watch to acquire any decent ones that come on the market as distressed assets."
The advantage in business networking and hospitality is another point that potential buyers view positively. CEO A noted, "Because of the nature of the entertainment business, I often discuss matters with relevant parties while playing golf, so I feel there's a certain appeal in owning my own course for hospitality purposes," and predicted, "Companies that took on excessive debt to acquire golf courses will inevitably be forced to sell as distress assets if operations become difficult. Just as there was a scramble to acquire hotels during COVID-19, I expect a series of golf course acquisition attempts by companies to follow this year or next."