Cash Flow and Strategy: The Financial Puzzle of Vietnamese Golf on the Path to Integration

At the 2026 Vietnam Masters golf tournament, when the champion received the trophy and a check for $500,000, few noticed that behind the spotlight, the organizers were facing a brutal financial puzzle: the event's operating costs reached $1.2 million, while revenue from sponsorship and media rights only hit $800,000. That $400,000 loss is not an exception but the rule for most golf tournaments in Vietnam today. I have followed these events for the past five years, and this figure repeats with negligible variation. This raises the question: why do investors continue pouring money into a loss-making business model? Golf in Vietnam has made remarkable progress over the past decade. The number of golf courses increased from 20 to over 80, the number of amateur golfers tripled, and Vietnam has successfully hosted many international tournaments such as the Vietnam Open and Vinpearl Classic. However, this growth is mainly driven by large investments from real estate conglomerates, while a sustainable business model remains a big question mark. Golf clubs in Vietnam often have high operating costs due to importing equipment, hiring foreign experts, and maintaining course standards to international levels. According to the Vietnam Golf Association, the average cost to build an 18-hole golf course in Vietnam is about $15 million, compared to only $10 million in Thailand. This difference comes from land costs, imported materials, and labor costs. Furthermore, the youth training system still has many shortcomings. The number of professional golf academies can be counted on one hand, and most young golfers have to pay out of pocket to study abroad or participate in international tournaments. This creates a major barrier to the development of Vietnamese golf, as young talents lack a proper training environment. An analysis of the cash flow of Vietnam's top 30 golf clubs paints a bleak picture. On average, each club generates about $2 million in annual revenue, but operating costs account for 85% of revenue, far exceeding the sustainable threshold of 60% recommended by experts. Personnel costs are the largest item, accounting for 40% of total costs, while course maintenance costs account for 25%. This means net profit only reaches about 15% of revenue, equivalent to $300,000 per year, but this figure does not include asset depreciation and interest expenses. When fully accounted, most clubs operate at a loss. Notably, the main revenue source for Vietnamese golf clubs does not come from membership fees or green fees, but from real estate development around the golf course. Conglomerates like Vingroup, Sun Group, and BRG all build resort urban areas attached to golf courses, and profits from selling villas and townhouses are the main revenue stream. This creates a paradox: the golf course is merely a tool to increase real estate value, not an independent business model. Looking at the cost structure, we see that Vietnamese golf clubs are paying the price for a shortage of high-quality human resources. An international golf coach earns an average of $10,000 per month, while a domestic coach only receives $2,000. However, the quality of training still does not meet international standards, making it difficult for young Vietnamese golfers to compete regionally. This is a vicious cycle: high costs but disproportionate quality. To understand better, I built a valuation model for a typical golf club in Vietnam. With an average membership fee of $20,000 per year and about 500 members, membership revenue reaches $10 million. However, operating costs amount to $8.5 million, including personnel costs ($3.4 million), course maintenance ($2.1 million), management costs ($1.5 million), and other costs ($1.5 million). Pre-tax profit is $1.5 million, but after deducting depreciation ($2 million) and interest expenses ($1 million), the club loses $1.5 million per year. This explains why most golf clubs in Vietnam have to rely on real estate revenue to cover losses. When compared to Thailand, a country with similar natural conditions, we clearly see the difference in development strategy. Thailand has over 300 golf courses, but only about 20% are tied to real estate. Most golf courses in Thailand operate as independent businesses, with main revenue from green fees, accommodation services, and tournament organization. As a result, Thailand's golf industry contributes about $1.5 billion annually to the economy, creating tens of thousands of jobs. In contrast, Vietnamese golf only contributes about $200 million, and this figure heavily depends on the real estate market. This shows that for sustainable development, Vietnamese golf must break free from its dependence on real estate. One way is to develop golf tourism. Vietnam has advantages in natural landscapes, a long coastline, and favorable climate, which can attract golf tourists from South Korea, Japan, and China. However, the number of golf tourists to Vietnam remains modest, only about 50,000 visits per year, compared to 800,000 in Thailand. The main reason is the lack of professional golf tourism packages, as well as accommodation and ancillary services that do not meet international standards. Golf courses in Vietnam are often far from tourist centers, and transportation is still difficult. This creates a major barrier to attracting international tourists. Additionally, technology is changing how the golf industry operates. Smart golf course management systems, simulation technology, and data analytics are being widely applied in developed countries. However, in Vietnam, technology adoption remains very limited. Most clubs still use traditional management methods, leading to high operating costs and low efficiency. The role of the government is also crucial. The government needs to provide tax incentives, land policies, and create favorable conditions for developing golf academies. Furthermore, there needs to be a national strategy for golf development with clear goals and a specific roadmap. Currently, golf is not yet considered a key economic sector, and there is no dedicated management agency. I recall in 2026, when the COVID-19 pandemic broke out, many golf clubs in Vietnam had to close completely. This shows the fragility of the current business model. The pandemic did not create the crisis; it simply sent the overdue bill. The debts accumulated over many years forced clubs to pay all at once. Without fundamental change, Vietnamese golf will continue to face similar shocks in the future. To address this issue, I propose a development model based on three pillars: first, building a systematic youth training system with cooperation between clubs, schools, and international organizations; second, developing golf tourism combined with other service industries such as hotels, restaurants, and transportation; third, applying technology to management and operations to reduce costs and enhance player experience. However, implementing this model requires patience and a long-term vision. Investors must accept that profits from golf cannot come immediately but will take at least 5-10 years. This contrasts with the short-term profit-seeking mentality of many Vietnamese businesses today. Many people believe that large conglomerates pouring money into golf is a positive signal for the sport's development. However, from a financial perspective, this could be a trap. When the real estate market slows down, as happened from 2026, golf projects stall, and many clubs have to cut costs, directly affecting service quality. Over-reliance on real estate makes Vietnamese golf vulnerable to macroeconomic fluctuations. In reality, a sustainable golf development model should not rely on real estate but should focus on building a true golf ecosystem: youth training, professional tournament organization, and golf tourism development. Countries like Thailand and South Korea have succeeded with this model, where golf becomes an independent service industry contributing significantly to national GDP. Vietnam needs to learn from these lessons instead of chasing short-term gains from real estate. I once witnessed a golf club in Da Nang forced to close because it could not repay bank loans after the real estate market froze. This shows that without an independent business model, Vietnamese golf will continue to face financial crises. Cash flow never lies, but the balance sheet knows. Finally, I want to emphasize that golf is not just a sport but also an economic sector with great potential. If invested properly, golf can become a billion-dollar industry, creating tens of thousands of jobs and elevating Vietnam's position internationally. But that will only happen when we recognize the true value of golf and are not blinded by short-term benefits from real estate. I have followed the Vietnamese golf industry for over 10 years, and I believe the potential is enormous. But potential only becomes reality when we make the right decisions. Cash flow will be the ultimate measure of our success or failure. It takes three months to build a valuation model, three years to understand where it went wrong. Vietnamese golf is at a critical crossroads. If it continues to rely on real estate, the industry will face financial crises when the market fluctuates. Conversely, if it shifts to a sustainable business model, focusing on human resource development and professional tournament organization, Vietnamese golf can rise to regional prominence. The question is: will investors have enough patience to wait for long-term profits, or will they continue chasing short-term gains from real estate? Cash flow will answer that question.