30% of Sales from 'Corporate Card Business'... Golf Courses Once Proud Behind Corporate Barriers Stumble [Corporate Card Golf]

②Ban on Corporate Credit Card Payments at Golf Courses in Large Corporations and Requests for Restraint
Top Golf Courses Begin to See Decline in Sales and Customer Numbers
Membership Golf Course Users Decrease by 7.7%

Editor's NoteCorporate entertainment golf using corporate credit cards has driven the golden age of the golf industry since COVID-19, but recently, as companies have restricted corporate card payments at golf courses, the golf industry is facing a crisis. The "golf fever" surged so much that the term "gollini" (golf + children) was coined during the COVID-19 boom, but now the enthusiasm is rapidly cooling amid economic uncertainty. In fact, golf courses, which were the biggest beneficiaries of increased corporate entertainment expense limits in 2020 and saw growth in corporate card sales, have been experiencing a decline in visitors and worsening business conditions since last year. The trend of large corporations restricting corporate card use at golf courses is also increasing.

[Image source=Getty Images Bank]

After COVID-19, golf courses that were breaking records thanks to increased corporate card sales have started to see their performance decline. This is because the number of people traveling abroad for golf has increased, and large corporations, concerned about economic downturns, have begun to restrict corporate card use at golf courses one after another. Since golf courses rely on corporate cards for one-third of their sales, the spread of corporate card usage restraint among large corporations directly leads to a decrease in golf course revenues.

The performance of major top-grossing golf courses declined last year. This marks the end of a four-year growth trend before and after COVID-19. According to the Financial Supervisory Service's electronic disclosure system on the 21st, last year, Chungju Daeyoung Base's sales were 62.2 billion KRW, down 11% from 70 billion KRW the previous year. During the same period, Jeju SK Pinx's sales decreased from 66.8 billion KRW to 60.3 billion KRW, Paju Seowon Valley in Gyeonggi Province from 57.8 billion KRW to 55.5 billion KRW, and Lake Side in Yongin, Gyeonggi Province from 61.6 billion KRW to 60.4 billion KRW.

The number of golf course users also declined. According to the Korea Golf Course Management Association, the number of golf course users nationwide last year was 47.72 million, down 5.7% from 50.58 million the previous year. In particular, the decrease rate of members-only golf courses, which are mostly owned by corporations, was 7.7%, higher than the 4.6% decrease rate of public golf courses. With the proportion of corporate card sales at golf courses reaching 27.6% as of the end of 2022, the spread of corporate card usage restrictions at golf courses, mainly by large corporations, is resulting in a sales impact.

Last year, large corporations tightened their belts to respond to an uncertain business environment, and this year they are officially ordering employees to refrain from visiting golf courses. Lotte Group began regulating golf course visits from March. According to the "Basic Work Guideline Compliance" sent by Lotte Holdings to all affiliates, executives' weekday visits to golf courses are restricted, overseas business trips including weekends should be avoided as much as possible, and excessive social or networking activities under the pretext of maintaining relationships with partners are prohibited.

Samsung Electronics has implemented a six-day workweek for executives since April. As the performance of key affiliates like Samsung Electronics has deteriorated and uncertainties in the business environment such as exchange rates and oil prices have increased, the company has entered emergency management. Executives of major affiliates including Samsung Display and Samsung SDI have also started participating in the six-day workweek.

SK Group, struggling with poor performance of its key affiliates, revived the Saturday CEO meetings for the first time in 20 years starting in April. SK Telecom stated that while it would not prevent individuals from playing golf personally, it aims to minimize golf played at company expense. Emart, amid worsening management difficulties, also recommends executives refrain from using golf courses except for essential entertainment activities. LS has issued golf restrictions to some affiliates. LS Electric recently reclaimed some executives' golf memberships for cost-saving purposes. Hanwha also recently reduced executives' golf memberships, leading to Jade Palace memberships being released into the market.

An executive from a large corporation said, "There is a growing atmosphere to restrict golf course visits for personal reasons except for essential business activities," adding, "Corporate card usage guidelines have also been strengthened compared to before."

As companies rush to restrict entertainment golf, the golf industry’s concerns have grown. Especially in regional golf courses, where business deterioration is already being felt rapidly, there is great anxiety about a future decline in the golf population.

A CEO of a members-only golf course operating in Jeju, which experienced a significant COVID-19 boom, lamented, "It is not easy to fill tee times on weekdays," adding, "There is even talk that it might be better to host tournaments and charge usage fees." He expressed his difficulties, saying, "We are trying various ways to increase golf course sales, but there is already a strong perception among the public that golf course costs are expensive, so it is not an easy situation."