Facebook

Bulgaria

GOLF like BUSINESS Flair

Dessislava Mitova, Business Week magazine - Bulgarian Edition; translated by Yana Dikova, VisitBulgaria.NET

The newest hot spot for investments in Bulgaria is the infrastructure land around the golf courses of the Scottish game.

“Good Morning, Mr. Jones. How are you today?” “I am very well Alan, thank you for asking. Well, except for the fact, that my left arm is stiff, so, do not ask me to do anything with it, please. My right ankle is giving me trouble as well, so I do hope to cut away working with it too. Otherwise I am more than fine.”

With these words Alan Roghut, golf teacher of Ravno Pole golf course, is describing the tuff daily routine of the golf teachers. The common practice of hiring foreign golf teachers in Bulgaria is massive, due to the fact the elite sport is yet to be developed in the country. Another foreign golf player, the 37-year-old British Neal Turley does not complain as his colleague Alan. Actually Alan is sure, that the next hot worldwide golf destination will be Bulgaria itself. Alan finds his job as a golf instructor in St. Sofia Golf & Spa a real challenge. In the past he also found challenging what the golf course in Elin Pelin looked like in 2004 - there were ruff construction works, no academy was present, the clubhouse was only a metre high and everything was just a plain valley (which is actually the English equivalent of Ravno Pole).

Before coming to Bulgaria, Neal is a professional golfer, who has to pay between 500 and 750 GDP for each tournament, he takes part in. Generally these sums are arranged by sponsors, while players literally serve as walking advertisements. Suddenly Turley gets tired of it all and starts looking for another type of job, in golf sector again. At the same time, a friend of his, who is a golf refer happens to meet the chairman of the Bulgarian Golf Association – Krassimir Gergov and so Alan is immediately recommended to Mr. Gergov. After a short conversation with the Bulgarian Golf Association’s management Neal agrees to become director of the golf course in Ravno Pole and even declines an offer from Germany, where golf culture is already established. “I took the risk to help golf development in Bulgaria and I see that the management team of the Bulgarian Golf Association is taking seriously this matter as well.”

There are only 200 Bulgarian active golf players at this point and only a handful of foreigners and tourists, tempted by commercials, are coming to play golf in Bulgaria. That is why the multiple constructions of golf courses in Bulgaria do really sound strange. At the moment the active golf courses in Bulgaria are 3. 19 golf courses are in process of construction, and there are 4 more, which are in full secret and nobody knows a thing about them. “Have the investors gone mad?” the rational-thinking person would ask. Here is the answer. “The golf courses in Bulgaria are too many? That is out of the question. The problem is they are not enough. Nobody goes skiing to a place, which has only one ski track. It is the same with the golf. Bulgaria needs at least 50 golf courses to become a golf destination. We are even late and far behind other nearby countries, like Turkey and Croatia, for example” – Kancho Kanchev says. He is partner and executive director of Black Sea Rama golf project near Balchik Beach Resort. The United States of America open a new golf course each single day. In Europe the registered club golfers count over 10 millions already. Only in Spain golf brings a seven milliard EURO income.

The main player at the golf market in Bulgaria so far is the Bulgarian Golf Association, in the person of Krassimir Gergov and the Golf Federation. The Golf Federation is managed by Air Sofia Company (Manuel Ferry Sanches, Liliyan Todorov and the cosmonaut Georgi Ivanov). According to Krassimir Gergov similar projects will be exclusively profitable. He gives Turkey as an example of good golf development. The golf complexes there are almost full and golf players hardly manage to subscribe for a game. Not to mention professional golf terrains, like the Cypress Point in the USA, where one have to wait 8 to 10 months in order to play on the course. And no matter what the climate condition is – rain, wind, storm… after waiting for ages, the golf player goes there and hits the green. At places like this particular one, playing the game is really expensive. For example at Cypress Point the one-time fee is $ 450, the rent of a caddy is about $ 120 + tips, of course.

“The construction of one golf course is the same like participating in a Championship league. That means you have to be capable of choosing the most appropriate place with good communication and infrastructure, as well as to have the power to position it right on the market. “These are the words of Kiril Nedev, who is executive director of Golf Club Ibar project, situated in Dolna Banya - a small town located about 15 km away from Borovets ski resort and only 1 hour drive from Sofia.

At this point the region of Bansko and Razlog is the leading destination for the largest number of golf projects in Bulgaria. So far there are 7 golf projects planned for this particular mountain area. Pirin Golf Holidays Club”, the first vacation complex in Bulgaria is in process of construction now, on a total area of 1400 decares in Betolovoto site. Investor and executor of the project is the Bulgarian company “Balkanstroy”. The second project of Balkanstroy is “Pirin Golf and Country Club”. Four villages in Razlog Municipality will also have golf courses. The local Parliament made a decision on its last session to participate in four companies in the sites of Dobarsko, Godlevo, Gorno Draglishte and Dolno Draglishte.

There are a couple of factors, which would make the investments in golf profitable.

First, the construction of the golf course should be done by professionals. Contrasted with the wild and rapid construction of hotels along the Black Seaside, the construction in golf does not aim gaining fast and easy profit. The projects, indeed, have the ambitions to compete with worldwide golf projects. For golf designers are hired famous golf players, like Gary Player, Ian Woosnam and Jack Nicklaus. The hiring of those specialists costs between 500 000 and 1 million EUR. Besides projecting the courses, they also promote Bulgaria as a hot golf destination. “So this is an investment, not an expense. Later on, the good design will sell properties and thus the cost price of the maintenance will be lower in future.” Nedev says.

The second factor, which influences a satisfactory return from one golf course, is the infrastructure of the area. It is more than obvious that the investor in Bulgaria earns not from golf, but from the sales of properties and additional service charges. It should not be forgotten of course, that the sells of hotel rooms and apartments are fact due to the course itself (good location + preserved nature). The prices here vary from 1400-1600 EUR per square metre. At the same time, some golf courses in Spain do not offer any properties for sale, but are still profitable enough. They have been constructed exclusively for golf players. This is possible, because there are enough golfers, who make the investment returns easier. “The construction of a golf course, though, at a place with no golf culture and no golf climate is not a good idea at all” Manuel Ferry Sanches says. In cooperation with Air Sofia, Manuel Sanches participates in the construction of the golf complex in Kuttina Village, near Sofia.

Golf villas usually cost about 500 000 EUR. The record price for Bulgaria is held by Black Sea Rama and counts to 1.4 million BGN. The complex at Black Sea Rama consists of 500 villas. Some of the luxurious holiday homes have pools and most of them are being sold in packages. The first package, launched on the market consists of 78 residential buildings - 36 of them are sold and 21 are deposited. The interest comes from Bulgarians, Russians, Jewish and Arabs. “We report a 30 % increase in the rates, compared with the first 9 month figures since we first started selling. We are also surprised by the buyers’ profiles, as we expected 80 % of them to be foreigners (in particular British), while it actually came out that half of them are Bulgarians.” Violeta Budeva, marketing director of Black Sea Rama says.

If we make simple arithmetic – 78 houses multiplied by 500 000 EUR equals to 39 million EUR receipts. If we have a project at average value of 103 million EUR, it comes out that almost half of the investment is paid-off only with the first package, while in the same time 422 more properties are left for sale. The prices of the next villas for sale are expected to rise even more. In this context Krassimir Gergov says he hopes the rates will reach 3000 EUR per square metre. Having all this in mind we should not forget that besides from golf property buyers, the golf complex earns from golfers, who play golf and rent villas or apartments. There are also people, who buy the villas in order to give them for rent afterwards and gain profit from that.

The residential part of Golf Club Ibar consists of 450 houses. So far 50 % of them are sold away. The targets are mainly British and Irish residents. “The investments in golf are much different from the seaside investments, where the investors directly get their profits. Golf is reinvestment itself. It is like a shop, located on “Vitosha” Boulevard in Sofia, where you do not gain immediate material profit, but have stability and solidity of your incomes”., Iliya Lazarov, the other owner of Golf Club Ibar says. “Imagine one golf course with clubhouse, restaurant, training field with 6 short holes and a pro-shop – an investment, estimated at 10 million EUR. Their managing will bring from 1.3 million to 4 million EUR to the owner, depending on the management effectiveness”.

The third important factor, influencing the profitableness of golf investments is the good quality marketing. At the inspection of Black Sea Rama golf course Gary Player stated that after the golf courses are finalized, the country should sponsor a tournament at a European level so that golfers see with their own eyes the constructed golf complexes. Thus the flow of solvent clients will start more than naturally. According to Krassimir Gergov the marketing expenses come to 300-400 000 EUR anually. Usually the game is advertised in specialized foreign Medias. For example, at the last visit of Gary Player in Balchik, foreign journalists were invited.

St. Sofia Golf & Spa has another method of clients’ approach. According to the words of Doryana Dimitrova, the club sends e-mails to specific circle of clients, which includes foreigners, as well as keen Bulgarian golf players. “We try to engage the golfers with tournaments almost every weekend” she says. It is also a recent trend many corporations to organize their team-buildings at Ravno Pole golf course. Some of these companies include Oracle, Chivas, Dunhill, and Danone. Here is another curious fact brought to our attention by Kamen Kirilov, press-attaché of the Bulgaria Golf Association. At the first golf tournament “Bulgaria Open”, which was held last year there were 4 foreign golfers, who hadn’t been targeted. They had just seen the ad in the Internet, applied online and came to Bulgaria for the tournament.

Neal Turley thinks the golfers are always looking for a new terrain. “The quality high-grade projects with expensive facilities and good golf courses in Bulgaria are definitely attracting the players. Besides that, players spend much more for the same quality and experience in England.

How Much Does a Golf Complex Cost?
To construct a new golf course, one company should have at least 5 – 12 million EUR for the course construction only (not including investments in construction of buildings, hotel complexes, residential parts, infrastructure and facilities). The projection takes up to 10 % of the money recourses of the whole project. The water irrigating system costs between 650 000 and 1.2 million EUR. The complete equipment costs about 250 000 – 450 000 EUR. On average, one golf project in Bulgaria amounts to a total of 100 million EUR.
With the start of operation of the golf course, the incomes will mainly come from the sells of real estates, while later on the incomes will be generated from member fees and rental of facilities.
The golf courses can be financed in different ways. The first scheme is called “play and pay” (applicable at Ravno Pole golf course). In Golf Club Ibar the investment returns are based on the “members only” private club scheme, where everybody who has their own property becomes member and pays an annual fee of 1600 EUR, for example. Part of that money goes for infrastructure and common improvements; the other is for golf itself. Separately, more funds are generated, when members play.
Nature is essential for successful golf projects. “We want to show that there are alternatives to the over-construction. For example Black Sea Rama offers only one-floor and two-floor luxurious villas. The clients already felt that we are offering something different and valued it by giving money for calmness and beauty amongst nature.” Kancho Stoychev says. Mr. Lazarov supports his words: “In our project the building factor is 0.2 %. If we don’t consider the course itself, the factor is 0.02 %. This means that a house cannot cover more than 200 square metres per decare and cannot be set on more than two floors. We have even talked with the mayor not to allow other type of constructions in the region.

The RULES of the GAME
"Rich guys, who come with three cars of bodyguards, are not welcome on our course at all. We are even considering a black list now” Nedev says seriously. The club has prepared 11 rules, which are part of the contract, the members are signing. One of these points says that the golf course do not allow the carrying of weapon, as well as the attendance of bodyguards. “That is to say persons, who feel insecure, are not welcome in our golf club.” Lazarov concludes. According to Neal Turley and Kancho Stoychev golf is not the sport of the rich only. Actually, one day at the green does not cost more than a day out on the ski runs. Not to forget, Bulgaria has at least 200 000 keen skiers. Besides that, the investors think that the development of golf tourism will inevitably raise the tourist flows towards the sea resorts and the mountain resorts. One average keen golfer always chooses a holiday destination, close to a golf course.

According to the experts this average golfer will spend about 100-120 EUR for one day, even in countries with lower standards, like Turkey, for example. The game there costs about 70 – 90 EUR. The golfer also rents a buggy, which is 20 EUR more. Plus the caddy (15 – 25 EUR depending on qualification) and with a good lunch, the expenses go to 130 EUR. “I do not really see why the one-time fee should stay lower here in Bulgaria.” Kamen Kirilov says. Right now the fee in Bulgaria is around 50 BGN.

The increase in number of people playing golf in Bulgaria is already a fact. Doryana Dimitrova shows us the proofs. Two years ago she used to serve 20 members of the golf course. In one year the number increased three times and finally reached 100 in 2007. There are another 100 people, no members, playing on the course too. Neal Turley also notices change in the proportion of Bulgarians and foreigners. In the beginning Bulgarians were only 20 % of all players. Now they have reached 50 % of the total number. “Many people will say this sport is boring. But once they grab the stick, they get addicted to it. The challenge of swinging better and better makes them try over and over again”. So the optimistic prognosis of the British does not sound far-fetched now. Here it is – “Bulgaria will definitely become golf destination of worldwide level. Standards are very high. It is amazing that so many golf courses will be built in future.”

BEST of the BEST
Gary Player is designer of Black Sea Rama project in Balchik and Thracian Cliffs golf course in Kavarna. "I am sure that Black Sea Rama is going to be amongst the best courses in Europe and the world as well" he says. Gary Player has won 163 tournaments worldwide. Five time winner of World Match Play Championship (most ever) and only winner of Grand Slam on Regular Tour and Champions Tour. Gary Player is also famous with projecting more than 200 golf courses. Unique Gary Player designs are the courses in Yangon, Myanmar and Sun City, Republic of South Africa.

Jack Nicklaus is now designing Golf Club Ibar near Dolna Banya. The Bulgarian contractors say he has iron will and discipline in working. Before opening Nicklaus Design Project Company, Jack was announced the best golf player for the 20th Century. Now during the 21st Century Jack Nicklaus has entirely devoted to golf design. He has 35 projects out of 240, which are in Top 100 of World’s best golf courses.

Ian Woosnam is now engaged with the projection of two golf complexes – Pirin Golf & Country Club in Bansko and Lighthouse Golf Resort, near Balchik. In 1994 Ian Woosnam opens the designed-by-him Dale Hill Golf Club in England and thus wins world public recognition.


GOLF FACTS:

There are golf courses in 130 countries worldwide. 59 % of them are located in the USA, 20 % are in Europe and 12 % - in Asia.

There are over 6 000 golf courses in Europe – more than 500 of them are located in Scotland, there are 43 in the Check Republic, 15 are in Poland, 8 – in Hungary and Slovenia. Bulgaria has 3 golf courses and Romania – just 2.

Over 56 million people play golf worldwide. The European golfers are more than 10 million, the North Americans count more than 28 million and the Japanese golf players are more than 16 million.

The world turnover from golf stocks exceeds 2 milliards per year.

The profit from golf in the USA is $ 62.2 milliard. This actually makes golf the most profitable sport in the world, bringing even more incomes than gambling and entertainment industry.

Europeans spend 2.3 milliard EUR yearly for golf holidays, as compared to the North Americans, who spend 64 milliard EUR on golf travels.


GOLF COURSES IN BULGARIA - COMPLETED + COURSES IN PROJECT

COMPLEX LOCATION COMPANY OPENING DATE
AIR SOFIA Ihtiman Air Sofia 2008
ST. SOFIA GOLF CLUB Ravno Pole village, Elin Pelin municipality St. Sofia Golf Club 2008
GOLF CLUB SLIVEN Sliven Air Sofia 2008
THRACIAN CLIFFS Kavarna Tempe, Austria 2008
BLACK SEA RAMA Balchik Black Sea Rama JSC. 2008
LIGHTHOUSE GOLF RESORT Balchik BalkanStroy, Barage Complect 2008
PIRIN GOLF HOLIDAYS CLUB Razlog BalkanStroy, Barage Complect 2008
GOLF CLUB IBAR Dolna Banya Golf Club Ibar 2008
CABLAND GOLF Kableshkovo,Pomorie municipality Cabland 2010-2011
GOLF COURSE RAZGRAD Razgrad Air Sofia n/a
GOLF COURSE BANSKO Bansko Golf Plus n/a
KULINOTO SKI & GOLF Razlog Balkanstroy 2011
PIRIN GOLF AND COUNTRY CLUB Razlog Balkanstroy 2011
RILA GOLF & SPA RESORTS Dobursko village,Razlog Razlog Municipality +Private investment fund n/a
WHITE MOUNTAIN GOLF CLUB Godlevo village,Razlog, Razlog Municipality +Private investment fund n/a
RAZLOG GOLF CLUB Dolno Draglishte village, Razlog Razlog Municipality +Private investment fund n/a
RAZLOG VALLEY GOLF & SPA Gorno Draglishte village, Razlog Razlog Municipality +Private investment fund n/a
PRAVEC GOLF & COUNTRY CLUB Pravets Terra Tour Service n/a
GOLF CENTRE KUTTINA Kuttina Village,Near Sofia Ferry Group 2009-2014
GOLF COURSE GORNA BANYA Sofia Air Sofia n/a
PRIMORSKI GOLF Primorsko Primorski Golf n/a
ALBENA Albena Albena n/a
IRAKLI Irakli Russalka Holidays n/a
KAVARNA Kavarna Albena n/a
BOROVETS Borovets Rila Samokov 2004 n/a
VRATSA Vratsa Air Sofia n/a
SHABLA Shabla - n/a
POMORIE Pomorie - n/a
GORUBLYANE Gorublyane - n/a
MONTANA Montana - n/a

Photos
News

2015/11/24

A Southeastern European conference called Go2Balkans begins in Sofia on November, 25 bringing more...

2015/11/12

The medieval capital of Bulgaria - Veliko Tarnovo is the third most affordable tourist destination more...

2015/07/27

Bulgaria was granted the approval of the World Tourism Organisation to create a World Tourism Museum more...

Advertisements
Properties in Sofia by Suprimmo.net

Properties in Sofia by Suprimmo.net