Golf course sale likely to be major blow for Macau players
Playing opportunties likely to be drastically reduced with sources seeing redevelopment - maybe as another casino - as inevitable
Golfers in Macau could see their playing opportunities drastically reduced with the news that Caesars Golf Club has been sold to an Asian developer.
Industry sources suggest it's only a matter of time before the bulldozers move in and another hotel-casino resort is const- ructed on what is now an 18-hole, links-style golf course.
One person familiar with the golf industry in Macau suggested that Caesars bought the property five years ago with the sole intention of redeveloping it as a casino resort.
"No one would buy a stand-alone golf course and expect to make money from it, it's simply a land bank," said the source.
The golf course was developed by Orient Golf International and opened for play in 2005. Orient Golf is part of a Taiwanese conglomerate with interests in a wide range of industries including coal mines in the US, electronics and car dealerships, and is the world's second largest manufacturer of computer monitors.
The company was one of the earliest developers of golf courses on the mainland and currently operates 15 clubs located in or near nine major Chinese cities.
Caesars invested a considerable amount of money into renovating the golf course and clubhouse after the 2007 purchase, and also installed a Butch Harmon golf academy. Harmon, the former coach of world number one Tiger Woods and Greg Norman and current coach to British Open winner Phil Mickelson, made annual visits to the Macau club to host VIP golf clinics.
In 2007, Orient Golf sold the golf course on the Cotai Strip to what was then Harrahs for US$578 million. Many expected that the US gaming giant would quickly turn the property into a hotel-casino complex. However, the Macau government did not increase the six casino operating licences issued, the first of which was awarded in 2001.
Last Friday, Caesars announced it had sold the 71- hectare property to an Asian developer, Pearl Dynasty Investment, for US$438 million.
"I have not been able to find out very much about Pearl Dynasty Investments, so I expect the company is somehow linked to one of Macau's wealthy families," added the source. "In due course there will probably be an issue of some sort that will lead to the re-zoning of the land, after which it will be redeveloped, meaning the golf course will obviously have to go.
"It may well be several years before this happens, but this is the last piece of open space on the Cotai Strip, so it's inevitable that the golf course will go to make way for a new development of some sort, which may also turn out to be a business park or residential units if a [new] gaming licence is not granted.
"The course is generally quite busy and caters mainly to hotel guests on the Cotai Strip, but make no mistake about it: these people don't come here to play golf, they come to gamble at the tables, and then some of them get in a round of golf while they're here."
Another industry insider familiar with the situation said the writing was on the wall when the Butch Harmon academy closed down six months ago.
"The driving range and golf academy were very well run, but to be honest there wasn't all that much business from the visiting golfers," the insider commented.
"Harmon has a contract with Caesars Golf in the US so he used to come here annually to host VIP golf clinics. They were quite expensive but well attended in the early years, however the interest seems to have dropped off over the past year or two. Basically there was no business there for him.
"Most new golf clubs in this part of the world are linked to property development, so to buy the club and run it solely as a sporting venture does not make any sense at all.
"Working on the average number of rounds played per year multiplied by an average green fee of US$200, it would take more than 80 years for the new owners to simply recoup their investment.
"There is still a plan for several golf courses to be built on [neighbouring] Hengqin Island, and so we may see one course go and some new ones built nearby to take its place. A tunnel has just been built that will complement the bridge that now links the Cotai Strip with the island, so the infrastructure is already there."