Men’s professional golf in South and Central America is about to take a leap forward with the launch of the PGA Tour Latinoamerica. With economic forecasts predicting that the region is going to be one of the most significant contributors to the growth in global trade, Tim Maitland looks at whether in the future the best investment the golf world can make is studying Spanish and Portuguese.
For those in the golf industry who are still need to check their Mandarin phrase book before they can tell their一号木yi hao mu (driver) from their 推杆tui gan (putter), the thought of learning a whole new language – or two given how Portuguese-speaking Brazil now boasts the world’s sixth largest economy – will be terrifying. It might be worth the effort.
“Definitely! They definitely need to!” says Jhonattan Vegas, the 27-year-old Venezuelan whose remarkable 2011 rookie season on the PGA Tour has sparked one of the latest growth spurts in Latin America.
“Obviously we’ve got great players, starting through the Argentineans, through Camilo Villegas and then me coming into the picture. I think it’s really growing; we’ve got a lot of kids with great potential coming up and I think they’re realising that it’s a dream that can come true, so I think it’s heading the right way.”
Almost everywhere one looks at the region there are reasons for optimism, but one can argue that they have been seen before and not amounted to as much as promised. It might have happened after Argentina’s Roberto De Vicenzo won the 1967 Open Championship and became the first Major winner from outside the traditional English-speaking golfing nations since Arnaud Massey of France in 1907. The game might have exploded at anytime from the 1950s through to the ‘80s when you could see players like Sam Snead, Arnold Palmer, Gary Player, Tom Weiskopf, Lee Trevino, Hale Irwin or Bernhard Langer winning anywhere from Panama through Argentina, Brazil, Mexico to Colombia.
The Olympics and Economics
The logic in suggesting that this time it’s different is two-fold. First, the return of golf to the Olympic Games in Rio de Janeiro in 2016 is opening doors for the game and, as we enter the four-year cycle post London 2012, opening the wallets of governments and national Olympic committees. Second, the economic predictions for the region are so positive it’s almost impossible to conceive of any reasons why golf won’t be along for the ride.
Earlier this year HSBC’s Global Connections Trade Forecast predicted that from 2012 to 2026 international businesses will increase global trade by 86 per cent to a total of US$53.8 trillion, but that trade growth in Latin America will be 30 per cent faster than for the rest of the world.
“If you take the emergence and development of golf in China as an example, it reappeared because Hong Kong and Chinese Taipei businesses started relocating their manufacturing bases to Southern China. From there came the investment in golf courses. It’s very hard to believe that, if the predictions for Latin America are proved correct, the growth in the economies and the influx of global business expertise won’t increase the demand for golf and that some of the investment flowing into the region won’t find its way into investment in golf” explains Giles Morgan, HSBC Group Head of Sponsorship, citing Brazil’s financial capital Sao Paulo and the 50-plus courses now in Sao Paulo State as an example.
Trade between Emerging Markets
It’s not just Brazil where growth can be anticipated. The same HSBC Global Connections Trade Forecast predicts that Peru and Panama will join Brazil in the top five Emerging Growth Importers between 2012 and 2016, and that Panama’s trade forecast will grow by almost 230 per cent in the next 14 years, fueled by the scheduled completion of the widening of the Panama Canal and the development of shipping lanes to Singapore and between North and South America.
“What’s particularly intriguing for the golf world is where the new investment in golf in Latin America is going to come from. The reason the forecasts for trade growth are so high is because of the way trade between emerging markets is going to increase. China is going to overtake the USA as the world’s largest trading nation by 2016. It doesn’t take a huge feat of imagination to see the day when Chinese investors start putting their money into creating golf courses in the emerging markets they’re working in, because many of those investors are already engaged with golf in their own country,” explains Morgan.
Idols and Leaders
Unlike China, one of the main forces driving an increase in golf’s popularity in Latin America will be the performance of its stars. Whether it was Mexico’s Lorena Ochoa and her short but stellar career as the world’s undisputed number one woman golfer, Argentina’s Angel Cabrera winning the 2007 US Open and the 2009 Masters, Colombia’s Camilo Villegas heartthrob looks taking golf onto the front pages of his country’s newspapers for the first time, or Paraguay’s Julieta Granada snaffling the US$1 million prize at the ADT Championship in November 2006, much of golf’s progress into the public consciousness has been through the performances of a handful of the region’s successful pros.
“It’s very typical in our region; we’re very used to idols and leaders. That needed to happen in golf for the rest of the aspects to happen. I think all this starts with heroes,” explains Henrique Lavie, the Venezuelan former professional and current Commissioner of the Tour de las Americas, who will become Executive Director of the PGA Tour Latinoamerica.
How quickly that can work in the region is illustrated both by Granada and Vegas. Granada reckons she would be recognised by around one out of every five people in the streets of Paraguay’s capital Asuncion; “They say ‘Are you the one that plays the little white ball in the hole?’ It’s very funny!” she says.
Vegas is credited with bringing about an even bigger shift in attitudes towards golf in his native Venezuela. His victory at the 2011 Bob Hope Classic witnessed a significant change in rhetoric from Hugo Chavez, the socialist President of the Republic of Venezuela.
In late 2010 Reuters reported that Chavez stating that "You, bourgeoisie, should offer your golf courses," to flood victims. Months later, following Vegas’ first victory on the PGA Tour, AP was reporting Chavez saying in a televised speech "I'm not an enemy of golf. I'm not an enemy of any sport."
“I didn’t change his mind, I just gave him a different perspective of what the game is really about,” Vegas explains.
“It’s gone from people thinking it’s a rich man’s sport to a game that everyone can play; which is huge, because I come from a family that is not really wealthy.”
Male-Dominated
For the women, the story in recent times has been slightly different. Granada, points out that part of the problem for women’s golf in Latin America is that those players who do make it to the top don’t stay for long. Two South Americans won on the LPGA in 2005 - Colombia’s Marisa and Chile’s first LPGA player Nicole Perrot –neither are still on the tour.
In that context, it’s easy to understand why last year’s win for another Colombian, Mariajo Uribe, at the limited-field, two-round unofficial HSBC LPGA Brasil Cup in Rio de Janeiro was greeted with what would otherwise seem to be near hysteria. Uribe herself predicted it would make “a huge impact on South American golf”, while Rachid Orra, at the time serving his spell as the President of the South American Golf Federation and who is still the leader of the Brazilian Golf Confederation declared “Symbolically,the same thing” as Vegas’ PGA victory.
The two-day 30-player US$720,000 tournament in Rio, which this year is known as the LPGA Brasil Cup presented by HSBC, remains the highest profile women’s golf event in the region.
The Olympic movement offers the more immediate hope that things will improve. The International Olympic Committee has driven women’s participation in the Olympics up from 23 per cent in 1984 to 43 per cent in Beijing four years ago. Couple that with the fact that investment from NOCs and governments is estimated to be worth around US$200 million a year worldwide to a sport like badminton; even a small slice of that for women’s golf would be more than it has ever seen before and could hardly fail to create significant change.
“I hope the money brings that access and people just get organised and get it done; the money helps, that’s a big part of it,” Granada states.
Horses Not Courses
If we are looking at the beginning of a golf boom in South America, it’s not a result of an explosion in the number of courses. Up-to-date statistics are hard to come by, the most reliable recent figures being from a KPMG Golf Benchmark Survey in 2008, which reported approximately 550 courses in South America with an estimated 130 under construction. Almost half of those courses were in Argentina.
Brazil has grown significantly. According to the Brazilian Golf Confederation the number of golfers has more than tripled since 2000 to 25,000 players is a drop in the ocean compared to the 10 million that, economically, they could be reaching.
“The size of golf in South America is pretty much what it was 10 years ago. The size of golf, the number of courses and the number of golfers is pretty much what it was at that time,” reveals Duncan Weir, the R and A’s Executive Director of Working for Golf.
“I think there has been a rise in the prominence and achievement levels of the top players rather than a dramatic rise in the participation levels and facilities. The leading amateurs are getting easier access to the American colleges and people like Villegas and Vegas are examples of that. They’re being spotted early by US college coaches.”
Crossing the Andes on a Unicycle
The problem is that uprooting and going to the USA at an early age is pretty much the only option, not an easy one considering that poverty, not wealth, has been behind many famous careers: Puerto Rican World Golf Hall of Fame member “Chi Chi” Rodriguez started golfing with a tin can and a stick. Paraguayan veteran Carlos Franco grew up in a dirt-floored, one-room home. Angel Cabrera lived under two brick walls and a tin roof. Andres Romero’s story is similar; a family of 10 with two bedrooms and no running water.
This is where the importance of the Tour de las Americas’ impending merger with the PGA Tour becomes apparent. In the last four months of this year the newly created PGA Tour Latinoamerica will stage 11 events, with the aim of expanding to 16 to 18 tournaments, each with a minimum purse of US$130,000. It’s not the increase in prize money – this year players were competing for a share of US$40,000 at Chile’s Abierto de Golf Los Lirios and for just US$10,000 more in Peru – but the structure. With success, a golfer can play his way into Nationwide Tour stops and the two PGA Tour events played in the region. Finishing at the top of the Order of Merit will bring Nationwide Tour status for the lucky few. Potentially, that increases the chances of a golfer who can’t find his way to the States growing and maturing far closer to home.
“It’s not because they will receive more money; they will spend much less money, so it’s easier. This is the importance of this circuit,” states Rachid Orra, the Brazilian Golf Confederation’s President.
“The majority of players don’t have the money to go to the States and start playing there, so it’s very difficult. If they can start their career in South America it makes thing much, much easier,” he adds.
Investment + Opportunity = Growth
Just how far and how rapidly golf in the region develops from here depends on an infinite number of factors. The main driver could be the future success of the kids currently emerging from college, the impact of the Olympics or from the other end of the scale the demand caused by increasing numbers of expatriate recreational golfers and growing upper-middle classes. What is clear is that there is plenty of scope.
“I think the potential is huge. It’s a continent of not that many golf courses in total. If you want to do a broad comparison there are currently about the same number of golf courses in Scotland, which has about 540, as there are in all of South America,” says the R&A’s Duncan Weir.
Together with the opportunities the other key ingredient needed is finance.
“The predictions at both ends of the scale are for unprecedented growth. There is going to be unprecedented investment in golf at a national level worldwide because of the Olympics in Rio. There is going to be unprecedented growth in trade and in economies in the Latin American region in the foreseeable future, which past experience indicates will result in an increase in demand for, and availability of, golf facilities. There’s investment and there’s opportunity; combine those two together and the end result is growth. Creo sucederá al final!” explains HSBC’s Giles Morgan finishing with the Spanish phrase meaning ‘I believe it will happen in the end’.
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