Rising Golf Membership Prices No Accident in Vietnam

There’s so much West-to-East condescension in the world of golf, it’s easy to dispatch James Hookway’s recent Wall Street Journal story regarding soaring values in the Vietnamese golf club membership market as just another example.

On subjects like this one (or perhaps the oft-bemoaned Chinese exuberance for golf development and the viability of its attendant real-estate), it’s not difficult to get inside the mind of Asian golf entrepreneurs: “Can you believe these Westerners have the gall to overbuild their course stock and component housing, run their own golf markets into the ground, and then lecture us on the dangers?”

Hookway isn’t some Asian greenhorn filing stories from Manhattan. He knows Asia, has been reporting from the region for years, and his points should be well taken. Even he sees value, to an extent, in club memberships — especially with the Vietnamese stock market and foreign investment being so very unpredictable.

But there’s something else to consider here. The Vietnamese government can come off as somewhat reactionary when it comes to golf. Here is another bit of sport in which Western media pundits engage — making light of former communist apparatchiks navigating the quasi-free market.

However, it’s important not to paint with a broad brush an entire administration. Yes, Vietnam’s transport chief recently banned his minions from playing golf, but that was a single department, it was largely symbolic (designed to score internal political points), and no ministers have followed suit.

Yes, every time a golf course is proposed in Vietnam, there is a great waving of hands and talk of shrinking agricultural land, but little of this comes from the government itself. The Vietnamese government cannot be seen overtly sanctioning golf; too much capitalist baggage there. But credit where credit is due: It has done a creditable job enabling course development while regulating its proliferation.

Decision 1946, issued in early 2010, specified development approval for 89 separate golf projects over the ensuing 10 years — a number that includes the 25 or so that were already operational. So, some 60 new golf courses by 2020, in a country the size of California, is hardly a recipe for oversupply.

In other words, it’s not anything like what’s happening in China where total development numbers are far more striking and largely unregulated, in the sense that further course-building is officially banned but routinely enabled by under-the-table land deals between local government functionaries and private developers.

There have been some official additions to the 89 Vietnam courses sanctioned by Decision 1946, but the overall number remains low — and there’s a real question whether developers will even meet this number by 2020. In other words, this quite practical, conservative target also stands to maintain the value of club memberships going forward.