The Pellucid Perspective - May 2014 - (Page 14)

MARKET FOCUS 'Big D' indeed, relatively speaking Dalla, TX Core Business Statistical Area (CBSA) C ontinuing our sequential series of profiling the healthiest Top 25 US Golf Markets as quantified and ranked by Pellucid using a 10-measure composite scoring system (things like population size/growth, golfer base, rounds generation, supply/demand balance, utilization and RevpAR), this month we highlight the 14th healthiest golf market in the country, Dallas TX. After an unseasonably cool and dry spring, someone in early May turned the heater on down there as temperatures soared into the 90s, going from "too cool" to "too *!#% hot." Now if they could only get the water machine turned on as well but....in moderation. By rounds demand (our selection criteria for market inclusion in the Top 25 list), Dallas ranks number 13 among US markets with facility-reported annual demand of roughly 5.0M rounds (that facility-reported tally counts both local and tourist play). Looking at the golf consumer base, we see that Dallas is home to a sizeable local golfer base of roughly 437K golfers (this is only local, resident population, doesn't count the tourism crowd, mostly around sports it seems). That golfer base is served by a healthy 168 18-hole equivalent (EHE) facilities, producing an average ratio of 2.6K local resident golfers per EHE, well above the national average. The supply mix vs. the national distribution across Pellucid's five access/value/usage segments shows a bias to the Private segment at 39% of holes vs. 27% of holes nationally. The balance of Value-added golf supply (Private & Public Premium) vs. Value golf (Public Value, Price and Learning & Practice) is 58%/42%, which is slightly skewed to Value-added vs. the national average (50%/50%). Within Public-Regulation golf, the distribution between Premium/Value/Price is 32%/44%/24% which is almost dead on the national distribution of 34%/42%/24%. During the "go-go" years of supply development (19902000), Dallas participated fully in the "build a course a day" craze, exceeding the national rate of supply expansion (~2%/yr) by adding holes at a Compound Annual Growth Rate (CAGR) of between 2-3%. This was somewhat offset by similar annual population growth (2-3%), meaning that theoretically the market entered 2000 at the same supply/demand balance as 1990 (not bad relative to the national supply dilution overhang of -11% for this period). Since 2000, the rate of supply growth has throttled back (~1% CAGR but still above the national average of <0.5%) while population has continued to grow robustly at >2%/yr. Looking at supply dilution/absorption in the post2000 period, the presence of rounds demand tracking at the market level allows us to create a better metric by comparing supply growth to rounds demand growth/decline (rather than population growth). Since 2000 rounds demand in the market has declined between 2-3% annually. Combining that demand 14 The Pellucid PersPecTive Private PublicPremium PublicValue Golfer Base - Est. # of Golfers (Ks) - # of 18 Hole Equivalent Facilities - Golfers per 18-Hole Equiv. PublicPrice Learning & Practice Dallas, TX CBSA Tot US Index vs. US 437.3 24,400 168 14,675 2,611 1,663 Supply Mix - Private - Pub-Prem - Pub-Val - Pub-Price - Learn & Prac 157 39% 19% 26% 14% 2% 27% 23% 28% 16% 6% 144 83 93 88 33 12% -28% 8% -15% 157 179 -40% -23% 171 28.6 26.7 107 53% $1,085 44% $836 120 130 $20 $14 143 Supply/Demand Balance - '00-'11 Cume Supply Growth/Decline - '00-'11 Cume Rds Demand Growth/ Decline - '00-'11 Cume Mkt Supply Dilution (-)/Absorption (+) Level* - Avg Ann Rds Velocity (ks per 18-hole Equiv.) Rounds & GF Revenue Health - % Utilization Rate - Avg. Ann. Rev. per Public Regulation EHE ($Ks) - Revenue per Available Round (RevpAR) Future Facility * Period % Chng in Rds vs. Period % Chng in Supply + Inverse index, lower is better Above average level vs. US (Index >105) Average level vs. US (Index 95-104) Below average level vs. US (Index <95) May 2014

Table of Contents for the Digital Edition of The Pellucid Perspective - May 2014

TOC
Why defectors are the key to stabilizing golf's participation decline
OpenTee opens our golf season
PGA Junior League helping golf catch up
Powering up long-term savings
Tom Abts: It's always fun at the Run
April '14 golf weather impact: Two (in a row) positive months
Dallas, TX: 'Big D' indeed, relatively speaking
ClubCorp acquires TPC properties in Michigan and North Carolina
It ain't over 'til it's over

The Pellucid Perspective - May 2014