For the hole to show up, you must collect all but one of the flag coins. The hole will appear where the final flag-coin was positioned.
The goal is to line up the final two coins so that when you collect the next to last coin, you will still be traveling in the direction of the last coin (now the hole) and hopefully enter it. The tricky part is, you have to be going the right speed. Too slow and you will stop short; too fast and you will fly right past it.
After having a little bit of trouble, I found a setup that would make it much easier. If you enter a level where a flag-coin is next to a spike, you will want to leave this flag-coin as the final one. Now, find the next closest flag-coin and use it as the next to last. Line up your shot and aim for the spike. This will force your character to stop over the hole and unlock the achievement.
Below is a video I made using the described method. Use it as an example (levels are randomly generated).