The Pellucid Perspective - August 2011 - (Page 15)

In summary, the Miami/Ft Lauderdale CBSA’s primary weakness is the relative lack of diversity across Pellucid’s consumerbased access and value segments. As long as the Private facilities are full and the Public-Premiums aren’t significantly discounting to generate rounds, the relatively limited supply of value-based golf should survive nicely if not thrive. If, however, the 10% decline in rounds since 2000 in the market has touched off panic among the value-added segments (i.e. Privates open to moderate outside play and Public-Premiums pricing themselves in the Public-Value range), life could be very challenging currently for the minority group of value-based facilities in the market. From a golfer’s perspective, if you’re one of the “haves,” life is probably good in Miami. For the “have lesses” (remember, the “have nots” aren’t generally engaged in the sport based on a variety of factors), you’re probably either having to drive a little to find your niche or you’re reveling in the abundance of value-added golf that’s having to play the low-rent district game based on their financial challenges coupled with declining rounds in the market. Our advice? Just wait around for that Jack Nicklaus Golf Trail proposal to resurface and get passed when no one’s looking, then the value golfers of Florida will be in tall cotton! n (Tech Security continues from page 7) try. Last March they were hacked and a subset of their clients’ customer information was compromised. These clients include major brands like Marriott, Walgreens, Citigroup, Best Buy… and more. You may have been one of millions of people who received a disturbing email from a company you do business with, and that you trusted with your personal information. The other alert involves one of the major golf course website and email marketing companies, and is more about reading and understanding the terms and conditions of an agreement, and the damage that might occur if you don’t. This company uses “trade” in lieu of cash with some clients. They take two tee times a day and sell them on their own online “network.” They solicit buyers by sending emails that appear to come from the golf course itself to the golf course’s own database. But they are not really from the course. The course has no control over when and how often these emails are sent. Knowingly or not, the golf course client has allowed the website company access to use and manipulate the golf course email database for its own purposes. It also places a “Tee Time Specials” link on the course website linked to the sale of the trade tee times. And, the course has given up the right to set a price for the two daily tee times, which often are sold for 50% or more off the rate sheet rates. On top of all that, the website company charges the course a 5% “administrative fee” on whatever revenue they receive by selling the trade tee times. Hard to believe? Here is their “terms and conditions” specific to this, taken directly from their website: cart and greens fee, and are marketed via Customer website and email database. Reasonable ”blackout” days are available with compensating tee times that are comparable in time, rate, and day of week. Prices for such tee times are determined by (Web site company) and/or its affiliates. Annual results are calculated net returns and a 5% administrative fee. So read all the rules, Dustin Johnson. And beware of danger, n Will Robinson. (Top Properties continues from page 12) In the future, DeLozier said, “Everyone in the community will have to be a member of a club, whether it’s a golf, social or other kind of membership. Most of the [clubs] in trouble are those with 1,500 residents and only 200 members.” Continuing a trend, Bluegreen’s Powers disagreed, saying “If people think they can tell people they’re trying to sell a house to that they have to pay to join a club they might not ever use, in this economy, they’re nuts.” Regarding the actual clubhouses, DeLozier said that he’s hearing from people in the industry that they are looking at reduced square footage for clubhouses, with fewer varieties or just one type of dining offered. Richey, on the other hand, said that his preference is for a larger original clubhouse with room to build out amenity space as needed. Where will new golf be? 5. Tee Time Policies. To the extent that the Agreement involves marketing affiliate tee times, the following policies apply, unless otherwise agreed in writing. Tee times are for eighteen holes including www.PellucidcorP.com There were few surprises in terms of where new golf will be built, most falling into the model DeLozier laid out of ”attractive residential markets with low residual inventory overhang.” He specifically cited Florida, Arizona and the Carolinas, and to a lesser degree Texas and Nevada, with those states offering no state income tax, like Florida and Texas, having an added advantage. Hinkle said Shea is looking at Texas, the East Coast and Mid-Atlantic regions, while continuing to be opportunistic in Arizona where the company is home-based. Toll Brothers’ Richey, specifically referring to the company’s Regency agetargeted home product, said, “If the fish are there, you want to keep fishing there. For us, that means South Carolina, Florida, the Mid-Atlantic and the Carolinas. We’re actually bullish on Florida, maybe with the exception of the Miami area because of all the condos.” While golf course contractors, architects and suppliers will be happy to hear that some homebuilders are at least looking at future golf communities down the road, current course operators may groan. Although most major markets remain oversupplied for the local demand, which is a major roadblock for standalone golf course developers, homebuilders may not worry about that if the potential for home sales and lot premiums exist, and there is a viable exit strategy in place to unload the golf course when the community is built out. “Homebuilders and developers couldn’t care less about golf supply,” said DeLozier. “If that amenity helps them sell homes, they don’t worry about over-supply.” Which begs the question: Isn’t that a major part of the thinking that got us into this mess in the first place? n The Pellucid PersPecTive 15 http://WWW.PELLUCIDCORP.COM

Table of Contents for the Digital Edition of The Pellucid Perspective - August 2011

The Pellucid Perspective - August 2011
Contents
Why cost cutting doesn’t yield long-term prosperity
Get Golf Ready showing some traction
Danger, Will Robinson!
Golf holding up but heartland hammered by weather
U.S. golf course development dead, or just sleeping?
Whither the weather
Miami/Ft Lauderdale, FL Core Business Statistical Area (CBSA)
Comings & goings
A few changes of note in August’s dog days

The Pellucid Perspective - August 2011