Business of Sport: Why golf is thriving in the UAE

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World class: Tiger Woods on the Majis course at Emirates Golf Club, one of the world class facilities in the UAE.

Golf has become more than just a sport. It is now a lifestyle statement, a niche which many endeavour to be associated with. 

With a sense of luxury attached to the sport, and the high-end target audience that it attracts, it becomes a challenge to maintain a certain standard when it comes to services at golf clubs.

The members have great expectations from the clubs, and that in turn extends to the fans’ and sponsors’ expectations at tournaments.

While the golf courses in the United States and Europe have been going through a period of decline in the past few years, the situation is different in the UAE. The sport here is witnessing a boom and attracting attention from golfers, investors and sponsors from across the globe.

Elsewhere, tournament sponsorship is taking a hit, with the recent news that Volvo, who have been associated with the European Tour for the past 25 years, are pulling out of the World Matchplay Championship and the Golf Champions tournament.

However, it is worth noting that the recent Ryder Cup at Gleneagles is being looked upon as the most successful golf tournament ever in the history of the game – with some experts estimating profits to the tune of €50 million.

KPMG’s 2013 report on ‘Golf participation in Europe’ suggests a healthier movement, but two of the biggest markets- UK & Ireland and Spain- saw the number of players dropping by 11,300 (-0.9%) and -3.5% respectively.

Only 29 new golf courses were added in the whole of Europe in 2013, an increase of just 0.4%. There are now a total of 6,811 golf courses in the continent, but the numbers again decreased in the UK & Ireland and Spain.

On the other hand, UAE tournaments have managed to attract a number of multinational companies as sponsors, while the number of rounds and memberships has constantly increased at the various golf clubs. 

In 2012, 365,559 rounds of golf were played on the 10 courses in Dubai, which increased by 13.3 percent to 414,177 last year. The three 18-hole courses and the two ninehole courses in Abu Dhabi have also shown healthy year-on-year growth with slightly more than 150,000 rounds recorded in 2013.

And after a brief period of respite as the country battled with the effects of the global economic downturn, the real estate companies are back, announcing exclusive golf community projects.

At the recent Cityscape in Dubai, both Dubai Sports City and Jumeirah Golf Estates announced new projects around their golf courses, while Damac have announced a second golf community – Akoya Oxygen – after the massive commercial success of Akoya. Both communities will have golf courses managed by the Trump Organisation.

One of the main reasons golf courses are still an attractive proposition in the UAE is because the demand has not yet outstripped supply (21 golf courses in the country), but also because how well it has been used by the real estate developers to enhance their offerings.

One bit of good news in Europe came at a course where real estate also plays a part. The Wentworth Club, home to the BMW PGA Championship and the only venue in England that hosts a top-class tournament on an annual basis, saw a change of ownership. The club was bought by the Chinese luxury conglomerate Reignwood Group for £135m, which showed there is still appetite for quality projects. The sale made a neat profit of £5m for previous owner Richard Caring.

Julian Small, CEO of Wentworth Club, said it was a proud achievement that in the challenging business environment of Europe, the club had managed to finalise a sound financial deal.

“In England, we host the only professional tournament that is held in the country every year. If we look at The Open Championship, it rotates among several venues. So we have been able to be the standout club,” Small said. 

Venues in the UAE are seen as a great destination for investors due to the boom in the economy and the strong business sentiment here. Chris May, CEO of Dubai Golf which oversees the Emirates Golf Club and the Dubai Creek Golf and Yacht Club concurs.

He said: “It is a very positive situation for golf in Dubai. What is needed to  develop a game in a city or area is 10 to 12 good golf courses and Dubai already has a good portfolio. So it has made the city very attractive to golf fans in general.

“People see Dubai Golf as a world-class facility. As a result, business has been very good. We have the Omega Desert Challenge and the Ladies Masters and that in turn leads to promoting the game here and it also attract tourists from all over the world. 

“The country has been made very accessible by Emirates Airlines and others and it just makes the UAE a fantastic package for golf.”

A crucial aspect in making that fantastic package is the real estate angle. Clubs and real estate developers see great sense in joining hands and maximising the returns for each other. 

The valuation of any property increases manifold if it is at or near a golf course, while the clubs enjoy a ready population that can use the facilities all year round or fill up the restaurants and other recreational centres there. 

Projects like the Arabian Ranches and The Address Montgomerie are great examples of the symbiotic relationship between golf courses and real estate, and it’s no wonder prestigious companies like Damac are banking on golf to deliver.

“Real estate development is essential to golf. You very rarely see standalone golf facilities, especially in this part of the world. At the beginning, we didn’t have a real estate plan at the Emirates Golf Club and Dubai Creek. But then we saw what phenomenal success The Montgomerie had in that area and every new facility ever since has had real estate attached to it,” May said.

“In 2005, when we redeveloped the Creek, we created 92 villas which are all for lease. They have been very successful with 100 per cent occupancy since we opened. Recently, we did something similar at the Emirates Golf Club too. There we created 82 villas and they have been fully occupied since opening four years ago.”

Real estate development is yet to kick off at Yas Links in Abu Dhabi (pictured left) but according to Chris White, general manager at the club, that will change soon.

He said: “Yas has three plots that border the golf course. They were always intended to be developed. And (developers) Aldar have launched three new developments in the area.”

In the UAE, golf is thriving and Dubai Golf’s May added: “If we look at the Gulf region, there are three Desert Swing events and then we end the season with the DP World Championship. It’s amazing that such a small place holds such an important place in the golfing calendar.

“Also, Dubai’s success in getting the World Expo 2020 will drive the game further ahead with tourism and real estate development set to rise. The next four to five years look very bright.”

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Business of Sport: Real Madrid’s mission to take over the Gulf

James Piercy 13/10/2014
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Leading the way: Real Madrid have adopted smart strategies to increase their popularity.

In 2004, then Real Madrid head of marketing, now director general, Jose Angel Sanchez declared: “Eventually you may get just six global brand leaders. People will support a local side and one of the world’s big six. We have to position ourselves for that.”

Part prediction, part commercial mission statement, 10 years on, Madrid stand proud as the biggest global football brand, having overtaken the club whose methods they mirrored, Manchester United.

It is a sad reality to many but outside the football heartlands of mainland Europe and South America, essentially which clubs do the majority of fans support? Real Madrid, Barcelona, Manchester United, Arsenal, Liverpool, Chelsea, Juventus and AC Milan with Manchester City, Bayern Munich and Paris Saint-Germain perhaps now joining that elite.

The support is founded on success but has been shaped by aggressive marketing campaigns: shirt sales, pre-season tours and television coverage. With FIFA driving their vision of the ‘global game’, and a vacuum to be filled in terms of a club to support, there has been a scramble to win hearts and minds.

Madrid have traditionally concentrated on the Far East but their focus has recently switched to the Gulf, and, in particular, the UAE. In 2013, Madrid signed a five year shirt sponsorship deal with Emirates. 

A lucrative agreement worth around €150m (Dh685m) that will also see Los Blancos play Milan in a friendly at 7he Sevens on December 30.

Last week the National Bank of Abu Dhabi began offering customers Real Madrid-branded credit and debit cards after the bank became the European champions’ banking partner in the UAE.

If you’ve been to JBR recently, you’d have noticed the Real Madrid cafe which sits on the boardwalk outside The Beach Mall – it’s surely only a matter of time before another opens in Abu Dhabi.

If Marca are to be believed, and as of today International Petroleum Investment Company are yet to comment on reports first published on September 21, the Abu Dhabi Royal Family-owned energy company will soon be announced as the successful bidder for the naming rights of the Santiago Bernabeu. The deal is said to be in the region of €450m to €500m (Dh2.1bn-Dh2.4bn).

Florentino Perez has admitted that plans for the Madrid resort island in Ras Al Khaimah have now been shifted to Abu Dhabi.

While on a smaller level, the club’s agreement with NBAD will see players and coaches hosting training sessions in the capital. This is a concentrated commercial targeting of the region by Perez in an effort to establish Real Madrid as the club of the Middle East.

The birth of a brand It’s easy to think of Real Madrid as a global brand but they have played catch-up to the Premier League, and, in particular, Manchester United, who set the bar for getting the most out of new markets.

Other Premier League clubs followed suit but Madrid, and Barcelona, have been largely slow to react. It wasn’t until Perez first took office in 2000 that ‘Brand Madrid’ first became a concept.

Perez’s Galacticos transfer policy of buying the most popular players in the world (David Beckham over Ronaldinho) and having them shoe-horned into the team may not have been overly successful on the pitch, but certainly struck a chord with the watching world.

Having developed those foundations, his second term as president, however, has seen him accelerate those methods even further.

As Madrid-based journalist and club member of 20 years, Eduardo Alvarez, explains: “The whole monetisation process started with Florentino Perez. Before him, there was no marketing department, the stadium was not even in a decent condition, even the club website was rubbish.

“You may not like what Perez has done regarding certain aspects of the club but, regarding business he has had an amazing vision in creating a global brand that is not just a well-known team but one that commercialises its products everywhere. He started by copying United’s strategy in Asia but now he’s taken it one step further.”

That next step has been bringing the on and the off-field aspects of the club even closer, to the extent that Madrid’s transfer activity in the last window was dictated by foreign markets.

Alvarez continues: “It sounds artificial but it’s a way of keeping the shirt sales high. Perez needs to have a good German player, a good French player, he needs to have a Brazilian… this is something that is discussed. They didn’t buy Toni Kroos because they necessarily needed a good central midfielder, they needed a German player who was better known than Sami Khedira, who could guarantee sales of X number of shirts.

“Jose Angel Sanchez sees the world divided in potential markets and you could say the work this summer was focused on places where Madrid’s sales were perhaps not as high as they expected.

“James Rodriguez would explain why they didn’t try to sign Radamel Falcao. They already have a Colombian, and a younger one, so why take the risk with an older player. You can instead sign a Mexican to help exploit a market of over 100 million people.”

The practice has also continued with their kit designs this season. The pink away shirt has been introduced primarily to sell to female supporters while the use of the Yohji Yamamoto-designed dragon on the black third kit for the Asian market. Even though dragons are synonymous with St George, or Sant Jordi, the patron saint of Catalonia, home to Barcelona. Perez is also understood to have an agreement with adidas that Madrid jerseys must be on sale in each one of their 2,740 stores worldwide.

Playing by the rules Financial Fair Play continues to cast a concerning shadow over Perez’s expensive tastes – Madrid have provided four of the world’s six most expensive transfers. But if they keep making so much money – the club posted record revenues of €603.9m for the last financial year – helping them service their estimated debt of ¤602m, UEFA should be tempered as FFP, at least for now, only covers losses.

Next for the club could be a marquee Asian signing or even one from the UAE. Omar Abdulrahman, for example, is a regular visitor to Spain and has often espoused his love of La Liga. Should such a transfer be brokered it’s difficult to see how they could fail to become the biggest club in the region.

Fernando Sanz, LFP general director in the MENA region and former Madrid defender, whose father Lorenzo preceded Perez as president, said: “People may not like it but this is football in 2014. It is a global game and Madrid are playing it very well.”

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All roads lead to success in the Middle East for Aston Martin

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Man on a mission: Neil Slade is looking to grow Aston Martin's presence in the MENA region.

Two-and-a-half years ago you would have been forgiven for thinking Aston Martin, so famously linked with James Bond, were operating under cover in the UAE and had invented invisible cars. Spotting a new Aston in Dubai or Abu Dhabi was a rarity which was remarkable for a brand that produces exclusive luxury cars which are a perfect fit for the fertile Middle East market.

Inevitably, they decided to do something about it and Neil Slade, general manager for Aston Martin Middle East and North Africa, was the man given the mission to put this famous marque back on the map in this part of the world.

He arrived just over two-and-ahalf years ago and has succeeded in giving Aston a higher profile with a superb new showroom in Downtown Dubai with a complete support package including state-of-the-art service centre and plans for a new showroom in Abu Dhabi.

The company has also been given a massive boost with a big investment from an Italian company and the announcement of a partnership with Mercedes who will provide the powertrains and electronics for future Aston Martins.

They have also announced that the Aston Martin Lagonda has been revived, exclusively for the Middle East, with the first limited edition super-saloons expected to be here in November and on sale to a privileged few early next year.

Slade, took a break from his hectic schedule, to speak to Sport360° editor Steve McKenlay about the progress Aston Martin has made in the Middle East since his arrival in Dubai and why he is excited by the future.

Q You have been in Dubai for two-and-a-half years now and I know Aston Martin decided to go in-house, dealing directly with the customers rather than use a third party. Has that approach worked?
A Yes, definitely. The Dubai showroom opened which is all in-house, the service centre is fully open and functional and so we have put our money where our mouth is and sales in Dubai in the first year exceeded expectations with almost 100 units sold, which is fantastic.

We expect to do pretty much the same again this year. It takes time to get into the market and take a firm footing and there is still a lot of work to do but there is no question that coming to Dubai and the UAE was the right thing to do.

Is there a particular model selling more than the others?
Funnily enough in the UAE it is pretty even across the board. Certainly the Vantage range has done well because it is the entry product. We have a large expat community here and this car tends to be their first step into an Aston.

The Vanquish also proved to be very popular and the Rapide has done well, so these three models have proved particularly successful in the UAE. The DB9 is a fantastic product but is not perceived to be as new as the Vanquish and certainly not as an entry product so, because of that, it suffers a little bit.

Is there any change in that trend if you look at the Middle East as a whole?
Yes, it is quite interesting.

If you look at Qatar, for example, it is a 99 per cent Vanquish market. That’s all they are interested in.

Go to Saudi Arabia and the Rapide is very popular, so that has been a bit of an eye opener. It is also interesting to see how they spec the cars. Saudi tends to be conservative while in Dubai and Qatar they take a more out-of-the-box approach with different colours and our Q-Division which looks after the bespoke options can hardly keep up with the different requests.

If I showed you some pictures from Qatar you would be amazed by some of these cars. I think we did one the other day in Qatar in baby pink with a pure white interior, from the seats, the carpet, the steering wheel…everything.

What percentage of your customers is made up of women?
In Kuwait almost 50 per cent of our buyers are women. It’s lower here in the UAE where it is more like 15 to 20 per cent and that is something we need to address.

We are a lifestyle car, not just all about power. We are about beauty and soul so this is an area of the market we need to focus more on and I think other brands are realising that as well. A recent Arab Luxury Conference here was interesting from a female perspective. It was clear that they feel they are not getting enough attention as to what they want so we need to do more.

What is the typical profile of the male customer and what is the split between expat and Emirati?
Here is about 70 per cent expat and 30 per cent Emirati. I think that has something to do with the fact we are just in Dubai but we do have plans to move into Abu Dhabi. We would hope to achieve this within the next 12 to 24 months.

What, in your view, has been the biggest challenge you have faced over the past couple of years?
Probably getting brand awareness. For sure, we have got James Bond and everything else but we hadn’t really been in the market here for three years before I came and we had lost a lot of momentum, so it takes time to build up the trust.

People want to know if they buy a car who is going to look after it so it has taken time for them to realise it’s not just about buying the car, that they have got a full support package.

We also had to be proactive and ensure that people knew what the new products were and that they were here in the Middle East and I think we have met those challenges.

GALLERY – Aston Martin Lagonda being tested in Oman

Aston Martin has just signed a partnership deal for the use of Mercedes AMG engines. How is that going to work and is there any truth in the rumour that this is the first step in what could lead to Mercedes taking over Aston Martin?
In the last 12 months there have been exciting developments with the key turning in the investment for the next cycle of products. The Italians, Investindustrial, came in with £150m which allowed us to unlock and go ahead with a £500m investment which will deliver the new products, starting in 2016. The new products that are going to come are going to be ‘wow’, spectacular and very, very different.

We have got the advantage that with Mercedes coming on board they are going to deliver not just the powertrain technology, and it is all the powertrain, but electronics. So this brings a whole new dimension to the car. It allows us as a small boutique company to really access into a huge multi conglomerate and it’s the only way we can do it cost effectively. For me, seeing the design of the new cars coming with the technology, it is going to be almost an unbeatable product so the future is really exciting.

Our engineers have been collaborating with Mercedes for the last few months and there are no issues expected there. In terms of Mercedes doing more or taking over the company only Mercedes will know that. They have taken their five per cent in Aston Martin in exchange for the technology.

They have publicly said they are happy with that and are not looking for anything more. Everyone can speculate and when you look at our competitors they are all part of a big group so will that happen to Aston? I don’t know. At the moment, whether it happens or not, it’s not interfering with our flexibility. We are able to deliver anything and in a short space of time. If you look at the last 24 months from finishing the One-77 supercar, the CC100 last year, to the Zagato, the new Vanquish, the new Rapide S, the Vanquish Volante and the V12 Vantage S, a lot has happened without having a big brother, so to speak.

This is now culminating, here in the Middle East, with the announcement of the Lagonda. This is not something all companies have the facilities and engineering capability to do so we are feeling in a pretty comfortable place. Now we have financial muscle the future is really positive. In the Middle East the focus is on the Lagonda Super Saloon and it will hit the streets here in January or February. The final part of the testing is taking place in Oman and we will have the first car physically on the ground here in November. This is our main focus because it is something the customer base here asked for.

Does this mean that the Lagonda SUV which appeared as a concept back in 2009 will become a reality?
We brought back the Lagonda brand so immediately this had led to speculation about the SUV. Yes, I think it has given us the platform to start looking at more of these bespoke type products.

The SUV plan is still on the table. The focus has been on the new investors but I believe this is something that will be seriously coming to the top of the pile.

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