Transcript Document

Session 1: GOLF AND THE
ECONOMIC ENVIRONMENT MEETING THE GLOBAL
CHALLENGE
Steven C.M. Wong
Assistant Director General
ISIS Malaysia
[email protected]
OUTLINE
1.How does the global economic crisis impact leisure
activities?
2.What are the immediate and medium-term
prospects for the global economy?
3.What are the immediate and medium-term
prospects for the Malaysian economy?
4.What are some implications for golf managers?
1.
How does the global economic crisis impact leisure activities?
Households
Corporations
Government
1.
How does the global economic crisis impact leisure
activities?
•
Income effects, i.e. nominal (money) discretionary
incomes – prices matter; bonus payments; gross national
income
•
Wealth effects, e.g. share portfolios, unit trusts, bonds,
land value (esp. retirees)
•
Changed employment status – unemployment; part-time;
emigration/immigration
•
Personal & corporate expense curbs, decline in
corporate sponsorships
•
Government policies – positive/negative fiscal impulses;
borrowings
2.
What are the immediate and medium-term prospects for the global
economy?
2008
2009(f)
2010(f)
US
1.1
-2.8
0.0
EU
0.9
-4.2
-0.4
Japan
-0.6
-6.2
0.5
China
9.0
6.5
8.0
India
7.3
5.1
7.5
ASEAN-5
4.9
0.0
2.3
World
3.2
-1.3
1.9
International Monetary Fund, 22 April 2009
2.
What are the immediate and medium-term
prospects for the global economy?
•
Greatest economic crisis in modern history probably
averted through financial bail-outs and demand
management
•
But ‘V’-shaped recovery?
Depends on effectiveness of government
stimulus packages
Height of the ‘bounce’?
•
Many problems still not resolved
•
Toxic financial assets
•
Income and wealth destruction
•
Record budget deficits, debt overhang & excess
liquidity levels, etc.
What are the immediate and medium-term prospects for the
Malaysian economy?
- GDP MALAYSIA'S REAL GDP & INDUSTRIAL PRODUCTION,
2000-2008
25.0
20.0
15.0
10.0
5.0
2008
2007
2006
2005
2004
2003
2002
(5.0)
2001
0.0
2000
3.
(10.0)
(15.0)
(20.0)
GDP (2000=100)
Industrial Production Index
3Q08: +4.7%
4Q08: +0.1%;
Official 09: +1.0%-1.0%
Personal 09: -3.0%
- Industrial Production –
3Q08: -1.6%
4Q08: -15.6%
1Q09: -14.7% (Feb)
- Exports –
3Q08: +15.1%
4Q08: -14.9%
1Q09: -22.2% (Jan-Feb)
3.
What are the immediate and medium-term prospects for the
Malaysian economy?
- Active Job Seekers 3Q08: +88.7%
4Q08: +109.0%
1Q09: +130% (Est.)
CONSUMPTION INDICATORS (% CHANGE)
2000-1Q2009
80.0
70.0
60.0
- Bank Loans Approved 3Q08: -1.2%
4Q09: -23.7%
1Q09: -26.6% (Jan-Feb)
50.0
40.0
30.0
20.0
10.0
0.0
(10.0)
2000
2001
2002
2003
2004
2005
2006
2007
2008
(20.0)
Sale of passenger cars
Consumption credit
Consumption goods imports
Outstanding bal of credit cards
IQ09
3.
What are the immediate and medium-term prospects for the
Malaysian economy?
MALAYSIAN WEALTH INDICATORS (% CHANGE)
2000-1Q2009
IQ09
2008
2007
2006
2005
2004
2003
2002
2001
2000
(40.0)
(30.0)
(20.0)
(10.0)
0.0
Malaysian Housing Price Index
10.0
20.0
Market capitalisation
30.0
40.0
Second Stimulus Package – RM60b
19
2
7
10
15
25
10
29
Reduce unemployment
Ease rakyat's burden
Fiscal expenditure
Tax incentives
Assist private sector
Build future capacity
Loan guarantees
PFI & other projects
Equity investment
3
4.
What are some implications for golf managers?
•
Economy has declined sharply as expected. Expectations are for
recovery but no clear evidence that it will bottom-out soon
•
Recovery will first be signalled by pick-up in exports and this is not
expected for at least 2 - 3 quarters
•
RM60bn mini-budget is seen by most to have positive but limited
cushioning effect on economic growth (bet. RM5-7b of additional
fiscal stimulus must be injected in 2009)
4.
What are some implications for golf managers?
•
Challenging business environment through most of 2009 and
possibly into 2010; ‘V’-shape recovery is possible but not likely
•
Business consolidation and rationalisation are underway in many
sectors; (Are golf clubs vulnerable?)
•
Top-end facilities will probably be cushioned by players’ affluence
but others could find it very tough and unrewarding
•
Like most leisure (discretionary) activities, new and creative
marketing strategies will probably be needed
4.
What are some implications for golf managers?
•
Club finances need to be strong; be realistic - more debt is not the
answer; maintain positive net equity
•
Manage business cash inflows & outflows; do not overtrade
(maintain profit margin-asset turnover-gearing balance)
•
Use down-time to sharpen competencies and master new skills
(e.g. IT, language, etc); invest in new relationships
•
Demonstrate ownership in the workplace; put in more than you
take out; offer help where needed, not when asked
4.
What are some implications for golf managers?
•
Is cutting back on course & service quality counter-productive
given the high income market segment being catered to?
•
Can more be done to increase revenue yields through direct &
cross-selling and promotion strategies?
•
Would increased value-added services, say through ICT, be a
viable way of attracting and retaining client communities?
•
What about packaging memberships with Malaysia My Second
Home (MM2H) programme?
•
Should more be done to introduce developmental aspects such as
golfing as an elective subject in universities?
THANK YOU!
SAUJANA GOLF MANAGEMENT