Stuck in the rough

When it comes to sports, Polandand golf aren't often mentioned in the same sentence. Internationally, Poland is best-recognized in niche disciplines such as ski jumping and weightlifting. Domestically, soccer is the unassailable king of sports, both participatory and spectator, although tennis, volleyball and skiing are also quite popular.

Golf, meanwhile, is seen as patrician and expensive by the majority of Poles. Even among the entrepreneurial class, a nine-hole round is regarded as an intrinsically foreign way to discuss business.

Underwhelming numbers

Poland, a country of approximately 312,000 square kilometers with a population of around 40 million people, has only 25 professional-standard nine- and 18-hole golf courses according to the Golf Benchmark Survey 2007 by KPMG Advisory. All the golf courses are private.

These courses are not suffering from overcrowding either, as the number of golfers is low, reaching only 79 golfers per course, according to KPMG statistics. The Polish Golf Union (PZG), moreover, has only around 2,000 registered members.

"I think about 5,000 people in total play golf in Poland," said Zbigniew Folta, the editor-in-chief of Golf, Poland's oldest magazine dedicated to the sport.

It's certainly unfair to compare the situation in Poland with such affluent countries as Sweden, where almost 10 percent of the population plays golf, said Folta. He noted, however, that the sport is much more popular in the Czech Republic, a country whose economy and history are similar to Poland's. The Czech Republic has about 28,730 officially registered golfers and about 68 golf courses, according to KPMG data.

Pay for the course Average green fees for 18 holes in Eastern Europe
Country	Weeekend	Weekday
Hungary	€ 43	€ 59
Slovenia	€ 36	€ 46
Slovakia	€ 36	€ 48
Poland	€ 33	€ 39
Baltic countries	€ 31	€ 36
Czech Republic	€ 31	€ 33
Bulgaria	€ 25	€ 33
CEE average	€ 29	€ 37
Source: Golf Benchmark Survey 2007, KPMG Advisory

The illusion of cost

Few people in Poland would think of golf as a regular sport. Decades of communism, during which golf was condemned as a caprice for the bourgeoisie, have taken their toll. But the sport's reputation as luxurious is not always reflected in actual figures and prices, according to industry insiders. They noted that skiing, which enjoys considerable popularity in Poland, is often more expensive.

"A two-week ski trip to Austria costs about zł.5,000. Meanwhile, the annual cost of a membership card to play golf on a nine-hole course may cost as little as zł.1,000 and green fees for four hours may be about zł.150," said PZG president Piotr Mondalski. The cost of golf equipment for beginners runs from around zł.500-700, which is comparable to that of skiing equipment, he said. Mondalski admitted, however, that there were more expensive options in terms of both courses and equipment.

Teeing off

A lack of infrastructure and golfing traditions have proven a greater handicap to the sport than communist-era attitudes. Although the sport first found its way to Poland in the 1920s and 1930s, the Polish golf industry had to be rebuilt from scratch in the early 1990s. The first modern golf course was built in 1992, according to PZG's Mondalski.

"Golf in Poland has been built up from ashes," he said. The Czech Republic had two golf courses for foreign guests and top officials during communist times, which proved a valuable foundation for modern development of the sport, said Mondalski.

It is also important to keep in mind that Polish society is characterized by low participation in sport in general. This is why efficient promotion and development is urgently needed, especially among young people, Mondalski argued.

"Above all, it must be the young who take up golf. Out of all of PZG's members, only 150 are younger than 18 and many of those are the golf club members' children," he said.

The golf industry will not develop quickly without aid from the state, Mondalski claimed, especially in creating small, broadly accessible courses. "This is a key problem. Such courses could attract more golfers," he said.

The tax trap

Investing in a golf course is not a way to earn a quick profit. The rate of return for a golf course is very long-term, said Małgorzata Gajkowska, the marketing manager of the Kraków Valley Golf & Country Club (KVG&CC).

High maintenance costs and crippling taxes are problems which conspire to make golf courses unprofitable investments. Development of a course can run around zł.20-30 million, but unfavorable tax policy is of particular significance for Polish course owners, Folta said.

Mondalski agreed. "Imagine you buy a desolate lot of about 10 ha and you plan to found a small course. You model the terrain and grow the grass. But the state treats your investment as a [regular] real estate development and charges you accordingly the minute you launch your commercial activity. In effect, you end up paying zł.67,000 annually just for land taxes." He noted that a standard 18-hole course is five to 10 times larger, meaning higher taxes as well.

In practice, Poland's golf courses have been founded by golf aficionados with other sources of revenue. "If every person who has invested was rational about it, there would be no golf courses today," Mondalski said.

"From an economic point of view, building a golf course in Poland is idiotic," he added.

Survival strategies

Some investors have found ways to circumvent the tax issue, at least. "For example, people formally declare that the key economic activity from the golf course is growing and selling grass for pasture. Other courses exclude forests and lakes from their area of commercial activity," Mondalski said.

Many golf course owners have also developed a range of services to accompany the course, including organization of corporate events, hotels and other leisure facilities.

Developing areas around a course is popular too, especially since nearby plots tend to rocket in value. Maexpa Polska, for example, is developing its Valley Golf Village residential complex next to the Kraków Valley Golf & Country Club. Another investor, JMB Development Ltd, announced in July that it would build a 77-ha golf course as a part of a more-than 200,000-sqm residential complex in Komorów near Warsaw.

Organizing tournaments - amateur or corporate - is a another popular source of revenue. "[The Polish industry] is the world leader when it comes to the number of amateur tournaments - on our few courses, about 300 are held annually," Golf's Folta said.

Tournaments, tourism

Poland also hosts a growing number of prestigious international tournaments.

According to Golf's Folta, Poland is an attractive destination for such tournaments since its few golf courses are of premium quality and design even by world standards. And more are on the way, though progress is slow.

For example, one of the most modern golf courses in the CEE region, the Wejchert Golf Club, is scheduled for completion in 2010. Designed by celebrated golf course architect Robert Trent Jones II, it will have 18 holes, 52 bunkers and two lakes.

Large or small, new golf courses could also help to alleviate problems unrelated to the sport itself, such as the high level of unemployment seen in many regions. "Golf courses are usually built outside cities, in areas with limited opportunities for employment," KVG&CC's Gajkowska said.

A greater number of golf courses would boost golf tourism as well, Mondalski added.

"Golf is not tennis, where every court is the same. Golfers adore traveling from one golf course to another, from country to country," said Mondalski.

Tee time for CEE The golf industry in Central and Eastern Europe, 2007
Country	Courses	Golfers per course	Participation rate*
Bulgaria	3	42	0.002
Croatia	2	275	0.012
Czech Republic	68	423	0.267
Estonia	6	231	0.103
Hungary	6	202	0.012
Latvia	3	233	0.031
Lithuania	3	100	0.009
Poland	25	79	0.005
Romania	2	237	0.002
Serbia	1	300	0.003
Slovakia	6	503	0.056
Slovenia	10	612	0.305
Total	135	333	0.038
* Percentage of population Source: Golf Benchmark Survey 2007, KPMG Advisory

Hooked on golf

Despite all the obstacles, Poland's golf industry is gaining ground. "The number of Polish golfers is on the rise," KVG&CC's Gajkowska said.

Her club also tailors its offer in order to attract new customers. "We offer discounts for students and seniors. The price of green fees for five hours also varies: on weekdays it is zł.170, on Fridays it's zł.200 and on weekends it's zł.220," she said.

Golf's Folta stressed that more "ordinary" people are becoming golfers. "I was mailing our magazines at the post office when a post office assistant asked me about golf, saying that she played it as well."

Folta stressed that the golf industry in Polandhas huge potential for growth. "In a developed country approximately 10 percent [of the population are] golfers. In a large country with 40 million people, this means a [potential] market of four million golfers," Folta said.

He stressed that the sport had the power to attract people and turn them into devotees. "It's like a drug," he said. "If you try it, you get hooked."