The Spanish subsidiary of the British developer Taylor Wimpey Plc and the Irish hotel chain FBD Hotels and Resorts have signed a strategic alliance to build more than 600 homes in Mijas in the next ten years, with an expected investment of over 125 million euros. As a result, La Cala Resort will be consolidated as a destination par excellence for golf and relaxation, with three 18-hole courses, an exclusive 107-room four-star hotel and a 1,300-square-metre spa. This investment reinforces the Costa del Sol as the European leader in golf infrastructure, and confirms that the sector is recovering.
In fact, at present the golf sector is experiencing one of the best periods of recent years. After nearly a decade affected by the economic crisis and the increase in IVA sales tax, the clubs in Malaga are now starting to carry out improvements and take on more staff. The excellent tourism figures and new professional and amateur tournaments have given a boost and confirmed the recovery of the sector, which on the Costa del Sol creates around 900 million euros a year in direct and indirect income.
Malaga province, which has more than 70 courses, is one of the principal golf destinations in Europe, and this sport is especially attractive for the economy because of the high spending power of its users.
The growth of the sector, which last year increased by about four per cent, according to figures from the Malaga provincial government, unblocked a situation which forced several clubs to close during the worst years of the crisis, from 2012 to 2014.
At that time, the delicate economic situation was made worse by the aforementioned rise in IVA, which came as a shock to the golf courses because the rate increased from eight to 21 per cent. Despite pressure from the Junta de Andalucía and the Royal Spanish Golf Federation, and also some leading politicians close to the government, such as Esperanza Aguirre and José Manuel Soria, the Ministry of Finance refused to consider golf as a tourist activity, which would have entitled it to apply the lower rate of IVA. This meant that Spanish clubs were competing at a disadvantage against other destinations in which the tax rate was lower.
Most of the clubs decided to cover the increase themselves without putting their prices up, but this decision had serious effects on their profitability and the management of their courses. A decline in the number of sponsors, the principal financial support for the amateur tournaments which are organised on the Costa del Sol each year, was another problem faced by the sector during the crisis. The increase in tourists from other parts of Spain and from abroad is a key factor to understanding the present situation for clubs in Malaga province, especially on the western coast: visitors attracted by this sport spend an average of 130 euros a day, which is much more than other tourists, and they stay for around 11 days.
The return of professional tournaments to Spain has encouraged numerous golf courses in Andalucía to carry out improvements in recent months. The European Circuit has decided to return to this destination again, and the clubs want to make the most of the opportunity, aware of the publicity provided by this type of championship.
The Real Club de Golf Valderrama, which will be hosting the first Andalucía Masters since the crisis brought it to a halt in 2011 (see page 4), has invested around four million euros on remodelling its course. After five years with no international golfing events, the Junta de Andalucía is now committed to this sector and will spend nearly one million euros on organising the Masters, which will bring the best players in Europe to San Roque. It is calculated that this tournament in Cadiz province will have an indirect financial impact of about 50 million euros, and a direct impact of some 4.5 million.
It has been essential for institutions to work together to attract tournaments such as the women’s Open de España, which took place at the Aloha Club last year and was won by Malaga golfer Azahara Muñoz. This year (see page 7) it will be held at Gualdamina, following the agreement between the Junta de Andalucía, the Malaga provincial government and the Mancomunidad de Municipios of the western Costa del Sol.
Among the main objectives is the Ryder Cup, the most important golfing competition of all and one of the events which is most followed all around the world. This took place at Valderrama in 1997 and so far that is the only time it has ever been held in Spain. At the moment, the amount of investment which is needed to organise the Ryder Cup and the lack of private support means that it is not possible, although the administrations are working on it for the future.
At a regional level, Andalucía has made agreements, among others, with the International Golf Tour Operators Association to organise joint activities to promote the area to international markets.
Golf tourists have an important multiplying effect on the Andalusian economy, because income from food, drink and shopping covers around 70 per cent of the budget. For years, the region has been consolidated as the benchmark golf destination in Europe, although the courses in Andalucía still have the capacity to grow further and attract up to 700,000 more tourists a year, bearing in mind their facilities.