Thanks to Werner for this article.
This weekend my weekly newspaper, *Madeira-Nachrichten*,
will be publishing an article that takes a critical look at the golf craze.
I’ve attached an English version of the article as a PDF.
High turnover, low margins – why Madeira is still banking on golf.
Madeira is firmly committed to golf – and the figures show why. But they also reveal the limitations of this model.
At first glance, the planned major project in Ponta do Pargo promises impressive scale: €110 million in one-off revenue from property and hotel development, as well as around €15 million in annual turnover during ongoing operations. More than 500 jobs are set to be created. At the same time, the existing golf course on Porto Santo serves as a success story: With just under 40,000 rounds of golf played annually, it generates an economic impact of around 26 million euros.
But a closer look reveals that the golf sector is no miracle of profitability.
The operating revenue in Ponta do Pargo is offset by an estimated gross wage bill of 9.6 million euros annually – a wage ratio of over 60 per cent. This is typical of a labour-intensive industry, but also an indication that operating profits are likely to remain comparatively low. An annual return of perhaps 2 to 3 million euros seems realistic – solid, but far from spectacular returns.
So why this massive funding?
The answer lies not in the balance sheets of individual facilities, but in the
overall economic impact. Golf in Madeira is not an isolated business, but a
multiplier for high-value tourism. Every golfer brings not only green fees, but also hotel stays, restaurant visits and additional consumer spending.
On Porto Santo, this equates to around €650 in added value per round of golf – an exceptionally high figure.
This is precisely where the regional government’s strategic logic lies: Golf is intended to attract affluent visitors, diversify the economy and stabilise structurally weak regions. Particularly in northern Madeira, where depopulation is a problem, the project in Ponta do Pargo is explicitly positioned as a tool to combat demographic decline.
Yet the model also carries risks. It is capital-intensive, dependent on international tourism and not without its environmental controversies.
Furthermore, the direct return remains limited – success stands or falls on the indirect effects.
The bottom line is this: Madeira is not investing in golf courses to maximise short-term profits. It is investing in a system that generates revenue, creates jobs and stabilises the regional economy.
Whether this strategy will pay off in the long term remains to be seen. The figures provide arguments in its favour – but no guarantees.