[현장에서] Green fee cap? Japan, left to the market, appears in the 10,000 won range

Kasama Sakura Golf Course in Ibaraki Prefecture, Japan, operates by setting different green fees for each time zone according to the logic of supply and demand. The green fee at 6 a.m. on weekdays is only 1,600 yen. [사진 가사마 사쿠라 골프장]

The reporter recently covered a Japanese golf course for 32 days. The green fee at Kasama Sakura Golf Course in Ibaraki Prefecture was 1,600 yen (about 14,500 won). Although it is a golf course in the countryside and is limited to 6 o’clock in the morning on weekdays, the price includes a regular 18-hole round and cart usage fees. For a better time, the fee including lunch was 2,900 yen (about 26,000 won).

Rep. Min Hyeong-bae and others proposed a partial amendment to the Act on Installation and Use of Sports Facilities last month, saying, “We want to lower the course usage fee (green fee) for public golf courses to a reasonable level.” This is also a proposal by Representative Min Hyeong-bae to supplement and strengthen the golf course classification change (dividing large golf courses into non-member and general public) and price regulations that were created last year.

This amendment was aimed at public golf courses. Currently, large-scale golf courses must not exceed the government-announced price based on average green fees, but the revised bill includes provisions not to exceed the publicly announced price based on the maximum amount.

While covering Japanese golf courses, the reporter was able to feel that green fees move very flexibly depending on supply and demand. During Japan’s bubble period, green fees for some luxury courses exceeded 1 million won, but have now fallen to around 200,000 won. Golf courses are using various pricing policies to survive the recession. So, there is a golf course where the green fee is only 14,500 won.

We can also leave it to the market. The MZ generation, who started playing golf during the Corona era, could not bear the high cost and moved on to tennis and running. Sales of golf equipment and clothing decreased by about 30-50%. Green fees are also decreasing, especially at local golf courses.

It is common knowledge that price controls lead to side effects such as reduced supply, increased black markets, lower quality, and distorted corporate behavior. If price regulations are imposed, golf course officials will come up with tricks to avoid the regulations, and another regulation will be created to prevent this, repeating the vicious cycle. In the end, golfers become the victims.

The harmful effects of the government’s policy of setting golf course usage fees are already appearing. After the bill went into effect last year, local golf course green fees actually rose in line with the government-announced price. Green fees are now back on track, and new regulations have been proposed.

They say that in order to avoid price regulations, public golf courses can switch to a non-member system (high-end public golf course), but this is not a simple problem. South Cape Golf Course in Namhae, Gyeongsangnam-do, which is classified as a non-member golf course, recently submitted a petition to the Ministry of Culture, Sports and Tourism, requesting that it be converted to a membership system as it is difficult to pay taxes. Contrary to the purpose of popularizing golf, there are cases where public courses want to be converted into membership golf courses. However, in Korea, there is no bill that allows large-scale golf courses to convert to a membership system.

It is highly likely that the price regulation bill will drive Korean golf courses to a downward standardization. A golf course is similar to a hotel. There are cheap hotels that only have beds, and there are also luxury hotels with good facilities. Each person goes to a hotel according to their circumstances. The same goes for golf courses. Does it make sense to regulate golf courses with 7-minute tee times and golf courses with 10-minute tee times using the same standards?

Moreover, the green fee cap system also has unconstitutional elements. Most academy fee cap systems were ruled unconstitutional. This is the situation with private education fees, so it is not desirable for the government to set golf course green fees. Rather, it will have the side effect of increasing golf course usage fees.

Golf reporter Seong Hojun [email protected]