New Zealand’s golf tourism: A billionaire’s bet on ‘Lord of the Rings’ paradise

Venturing into the breathtaking landscapes of New Zealand for a round of golf may sound like a dream, but for investors, it's a strategic gamble. Bloomberg explores the allure and challenges as wealthy financiers pour resources into the country's golf scene, banking on its potential to capture a larger share of the global golf tourism market. With stunning courses and a push to diversify activities, New Zealand aims to become a premier destination for golf enthusiasts worldwide..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..By Ainsley Thomson.The golf courses are gorgeous. But they're very far away..That's the challenge facing the wealthy investors who are pumping money into New Zealand's golf industry in a bid to draw Americans and other international travelers to the bottom of the world. On the one hand are world-class courses tucked between snow-capped mountains and glacier-fed lakes high atop the Pacific Ocean. On the other hand? The flight from New York takes about 18 hours. .But in an era of YOLO travel, developers are betting that New Zealand can grab more of the roughly $24 billion global golf tourism market, which is expected to grow an estimated 60% over the next 10 years..California financier Ric Kayne is backing his fourth golf project in the country this year, while former Alibaba Group Holding Ltd. Chief Executive Jonathan Lu announced plans to build a championship course on a beachside farm west of Auckland. Construction is also in progress on two exclusive courses in the South Island resort towns of Wanaka and Arrowtown, near Queenstown — favorite locations for billionaires seeking a sanctuary far away from the world's turmoil..Golfers tend to be relatively wealthy and, as the thinking goes, groups of North Americans who travel to play courses in Ireland and Scotland, or Brits and Europeans who go to the US, might be open to a longer journey for a bucket list trip. Closer to home, the New Zealand projects are looking to compete against courses in Australia and Vietnam for well-heeled Asian tourists. .Read more: Drawing the teams for the David Carte Memorial Golf Challenge 2024 at BNC#6."New Zealand has great golf, the scenery is out of this world and so is the food and wine," said Jim Rohrstaff, an American who became Kayne's business partner on the golf projects after meeting him at the Vintage Club in Indian Wells, California. "It adds up to a complete package — that's why we're bullish on it and why we're building more.".With a population of slightly more than 5 million, New Zealand ranks high globally in the number of golf courses per capita, alongside Scotland and Ireland. Its dune-dotted coastline and rolling pastures are well-suited for the sport, and the year-round temperate weather is a draw, particularly for Australians and Asian travelers who want to escape sweltering heat..And of course, the scenery is hard to beat. Peter Jackson, who wrote and directed the 'Lord of the Rings' trilogy, is from New Zealand and there are filming locations across the country..Still, New Zealand is a relative newcomer to high-end golf. Historically, it was dominated by modest, local clubs. That started to change about 20 years ago in large part because of the late Tiger Management founder Julian Robertson, who was pivotal in spreading the word on Wall Street about golf in the nation..The hedge fund billionaire, who fell in love with New Zealand after a trip in the 1970s and amassed substantial assets there before he died in 2022, developed two high-end golf courses, Kauri Cliffs and the Tom Doak-designed Cape Kidnappers, in the early 2000s, each featuring a luxury lodge.."He had everyone scratching their heads wondering what an astute investor like him was doing building golf courses in New Zealand," said John Darby, a property developer and golf architect who's been involved in many of the nation's top courses including the Jack's Point course in Queenstown. .Among the frequent visitors to the courses developed by Robertson was Kayne, the co-founder of Kayne Anderson Capital Advisors. He eventually called Darby "out of the blue looking for a piece of land for a golf course.".That project became Tara Iti, a members-only course north of Auckland that opened in 2015 and is ranked by Golf Digest as one of the best in the world outside the US. They quickly followed that with two more courses at the nearby Te Arai Links..Rohrstaff and Kayne's current project is a redevelopment of The Hills near Queenstown, a private course ringed by mountains and overlooking Lake Hayes. They are undertaking it alongside the family of New Zealand jeweler Michael Hill. Lu's course is expected to open in 2027 on a 500-hectare (1,235-acre) farm in Muriwai that he bought in 2020..Read more: Golf's Next Paradise Is Being Built in Swamps Near Palm Beach.Despite the abundance of viable locations, the business of developing courses in New Zealand isn't easy. It requires deep pockets — Rohrstaff estimates the two Te Arai Links projects cost a combined NZ$200 million ($121 million) — while the regulatory approval process can take many years. Then there's opposition from environmental groups and the nation's ban on most foreigners buying property..Darby is currently building a course at Glendhu Bay on Lake Wanaka, a few miles from the site where billionaire investor Peter Thiel hopes to build a luxury lodge. The project was in the works for 20 years before a shovel hit the ground..Repeat Visitors.New Zealand's golf tourism industry grew in value to NZ$425 million in 2019, three times what it was in 2012, partly by targeting country clubs in US cities with direct flights to the country. They also appealed to Australians to make the short trip across the Tasman Sea..That momentum was derailed by the pandemic, and now, as travelers once again jet across the globe, the competition for golf tourism dollars is even more intense. Golfers tend to spend more and stay longer than average leisure travelers, according to David Griffiths, events manager at International Golf Travel Market. And other countries have taken notice, as courses pop up in locations such as Kenya, Vietnam, Bermuda and Barbados..New Zealand is 5,500 miles from Tokyo, 6,500 miles from Los Angeles and 11,400 miles from London and the geographical isolation means most people see it as a once in a lifetime destination. With that in mind, the industry has deliberately shied away from the so-called "buddies trip" model that is popular with Americans who visit Ireland and Scotland — not to mention Arizona, South Carolina and Florida — for shorter trips where the mostly male groups don't do much else besides golf, according to Ryan Brandeburg, an American golf pro who runs a consulting business behind the course that Lu is developing and another near Queenstown..Brandeburg first traveled New Zealand in 2009 to oversee Robertson's courses. On a flight on his first day in the country, he happened to sit next to then Prime Minister John Key, who invited him to play a round. He was subsequently tapped to help develop a golf tourism strategy and has been involved ever since. .These days, he said, it's pivotal to boost development so that there are "clusters" of courses near Queenstown and Auckland that help golf tourists justify the long trip. He also wants them to bring the whole family.."We want couples traveling together, families traveling together," Brandeburg said. "Golf is still the hero of their visit, but if they played four or five rounds of golf in 15 days, we would be very happy because all those other days they're spending money doing other things.".Read also:.🔒 Money can't buy the future of golf – with insight from The Wall Street Journa🔒 Money can't buy the future of golf – with insight from The Wall Street JournalRamaphosa tells SA expats Eskom has failed and SA has to move towards green energy – Geoff Johnson, Nedbank Charity Golf Day founder.© 2024 Bloomberg L.P.

New Zealand’s golf tourism: A billionaire’s bet on ‘Lord of the Rings’ paradise

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