Search for Tee Time May Lead to Tokyo

Johnny Sung is the chairman of a small company in Seoul and a man who loves his weekend golf. He’s been whacking drives and leaving putts short almost every week since he was in his 30s, and now, at 74 with retirement looming, he’s hoping to get out on the course a lot more often.

If only he can get a tee time.

Golf is booming in South Korea, trickling down from the elite to a new generation of golfers in their 20s and 30s who are flooding the country’s courses -- all 147 of them. Problem is, it does not take long in a country of 50 million people to flood that many courses. Teeing off, especially on weekends, has become a challenge for all but the best-connected businessmen and government officials.

Fortunately for golfers such as Sung, there are plenty of good-quality and relatively empty courses just an hour or so away.

By air. In Japan.

Japan is bursting with golf courses, 2,458 to be exact, and they’re becoming alternative links for South Korean golfers desperate enough to fly abroad for a chance to drive. Sung has made the hop by plane to Tokyo from Seoul three times in the last two years, visiting Japan for a couple of days to play several rounds and take advantage of nearby hot springs.

“I know when he’s in Japan, but he comes to golf, not to see me,” says his son, K.J. Sung, a Korean-American businessman living in Tokyo. A golfer himself, he smiles when he says he forgives his dad.

The influx of South Koreans could not come at a better time for Japanese golf courses. Golf developers built and built in the dizzy days of the late 1980s, and country clubs demanded million-dollar membership fees and still had waiting lists.

But when the bubble economy burst in the early 1990s, Japan was left with an excess of courses and not enough hackers. Compounding problems, many of those expensive club memberships had refundable deposits, and droves of golfers demanded their money back. The clubs had invested the funds in other businesses that were struggling too and couldn’t meet the cash call. Many went bankrupt.

Enter the Americans. In the last five years, Dallas-based Lone Star Funds and Goldman Sachs Group Inc. have been scooping up financially troubled Japanese golf courses, almost 200 between them. The firms are now the top two golf course owners in Japan, where golf is a $10-billion-a-year business.

Both set up management subsidiaries that aim to turn a profit by buying supplies such as sand and fertilizer in bulk, and employing American-style management techniques -- slicker pro shops and carts instead of caddies to move golfers around the fairways faster. Clubs are reporting that the number of rounds played is rising, and both Goldman Sachs and Lone Star have filed applications with the Tokyo Stock Exchange to take their Japanese golf subsidiaries public in the next few months.

Reports in the Japanese media have suggested that the IPO for Pacific Golf Management, Lone Star’s golf course operator, could be worth $445 million.

“There are still a lot of courses to purchase,” said Joseph Lenihan, Pacific Golf’s president. The company’s 98 properties control 150 18-hole courses, and Pacific has closed four new deals in the last 60 days, he said.

By contrast, finding land for new courses is tough. Flat farmland is precious and protected in volcanic Japan. And there are limits to how many greens and fairways you can carve out of the sides of mountains.

The new American management is also democratizing Japanese golf. The two companies have lowered greens fees and let nonmembers onto once-private courses, have encouraged more women to play and have persuaded the Japanese to start rounds at once unheard-of early-morning hours.

“People around here used to be allergic to the sound of the term ‘foreign capital,’ but they are happy at how things have turned out,” says Isao Ishiguro, the head of Pacific Golf’s operations in southern Japan, as he drives a visitor around Wakagi golf course. Wakagi is the company’s jewel on Kyushu island, just a three-hour hydrofoil ride from South Korea.

“The old Japanese owner used to call me up every morning and ask me how many golfers were on the course and what the weather was like,” Ishiguro said. “But the Americans trust me to run this place. They give me a budget and leave me alone.”

Curiously, though, the Japanese courses don’t seem inclined to go out of their way to lure South Koreans. The less-than-warm reception may have its roots in Japanese-Korean tension that lingers from the first half of the 20th century, when Japan occupied the Korean peninsula. Japanese clubs post no signs, or even clubhouse menus, in Korean.

In Asia, where caddies tend to be women, South Korean men prefer their caddies to be young and, well, flirtatious. Japan’s female caddies were hired young but have aged along with the industry over the last 20 years. The South Koreans mutter that these older Japanese women caddies can be bossy. It’s like golfing with your older sister, they say. Not only that, they can’t speak Korean.

“Our caddies cannot speak Korean, but they can communicate with body language,” insists Tadashi Yukitake, the caddie master at Wakagi, when asked how his caddies would tell a Korean golfer to keep his drive to the left to avoid the water hazard. “Most Korean golfers can read the caddie’s face.”

Yet it’s hard to escape the sense that the Japanese are happy to take the South Koreans’ greens fees while business is in a slump but aren’t about to encourage them to make a habit of coming.

The South Koreans, for their part, tend to keep to themselves.

“There is hardly any opportunity for the golfers to meet Japanese people, beside their caddies, for any possible cultural clash to occur,” says Kim Young-min, 38, a golf tour manager in Seoul. “Those would happen if the Korean golfers went into the city on a tour and wandered about. But they basically remain on the grounds of the country club.”

Still, Kim said business fell 30% last spring after tempers flared in Seoul and Tokyo over ownership of a rocky outcrop the Japanese call Takeshima island and the South Koreans claim as Dokdo -- causing some South Korean golfers to cancel trips to Japan.

Nobody keeps track of how many rounds South Koreans play in Japan. But Lee Kyong-jin, a spokesman for Emerson-Pacific Inc., South Korea’s first specialized golf management company that operates three links, estimates that South Koreans spend $1 billion a year on golfing abroad. Much of that is spent in Japan because of its proximity and because the courses are good, he says. Emerson-Pacific is considering buying some courses in Japan too, Lee adds.

At Pacific Golf, Lenihan and Ishiguro say they see the potential: a nation of golf nuts with nowhere to play, sitting just across the water.

“We have larger budget plans to attract the Koreans,” Lenihan says. “Maybe it’s not as well formulated as it could be, but it will be.”

Back in the clubhouse at Wakagi, Ishiguro envisions closer ties too. “Our course is close to onsens [hot springs] here. We could tie up with them to promote the region in South Korea,” he says. “I think we have to make it an opportunity.”

Jinna Park of The Times’ Seoul Bureau contributed to this report.