The Pellucid Perspective - August 2014 - (Page 17)
tracking (rather than population growth, which tends to always
increase, just at different rates). Since 2000, rounds demand in
the market has declined ~1% annually. Combining that demand
decline with the modest supply increase translates to a supply
dilution level for the decade of -11% (below the national average).
Putting together the 1990-2000 decade (-11%) and the
2000-2011 period decline (-11%), the average facility in Cleveland
has suffered a 24% reduction (not a math error, it's in the
decimal precision in the component numbers) in revenue, driven
by some combination of rounds or rate decay when compared
to the 1990 baseline (chosen semi-arbitrarily by Pellucid as a
period of economic health for the majority of US golf facilities).
The big challenge in Cleveland (similar to many other Top 25
markets due to the fact that supply growth is already about nil
and their population isn't growing) will be figuring out a way
to stimulate rounds demand. That said, rounds demand growth
could come from either new golfers or an increase in frequency
from the existing golfers (see the August issue of Outside
the Ropes for an in-depth treatment of this topic and how the
short-term stabilization of the industry at large and many key
markets may hang on figuring this out).
The average facility has throughput of roughly 25K rds/yr,
slightly below the national average before factoring in climate
and daylight influences. The more accurate measure is the market's
healthy 50% utilization rate, which is nicely above the national
average. This means that, after neutralizing the weather
impact of a less-than-12 month season, the market's average
golf "factory" runs at a higher throughput vs. the average US
(FootGolf continues from page 8)
and etiquette. Players are expected to understand and play by
rules set forth by their American FootGolf League, which is
part of the Federation of International FootGolf. Coming very
soon is a FootGolf player rating system (read: handicaps), modeled
after golf's but without some of the byzantine rules associated
with it, such as peer review.
A FootGolf Pro-Am tour is being organized now. Roberto
cites the substantial number of ex-pro and college soccer players
pining for a way to use their skills in a competitive format.
FootGolf can fill that desire and the Balistrinis think a business
can emerge as sponsors sign on (adidas already has), along with
a possible media partner (Golf Channel? ESPN? Back 9 Network?
Everyone's looking for content).
Can your course accommodate a FootGolf course? Not all
can. Additionally, the Balistrinis have been counseled about not
following the NGF's failed "build a course a day" strategy. They
hope for 500 U.S. courses planted in locations easy for players
to find and frequent. Their selection and certification criteria is
well thought out - they've said "no" a number of times. A fully
committed buy-in by management and ownership is required.
In fact, in more than one instance a new job title has been created
at a FootGolf facility, "FootGolf Manager." (I was thinking
Check out their beautiful new website at www.FootGolf.net.
course. On the revenue productivity side, the market generates
roughly $0.8M per public regulation-length EHE, which
is slightly below the Top 25 Markets average. After factoring
that for weather influence, the market's Greens Fee Revenue
per Available Round (RevpAR = Greens Fee Revenue/Available
(Capacity) Rounds) registers at $15, slightly above the Top
25 Markets' average of $14.
In summary, as a market Cleveland is on par or better than
the majority of key benchmark values while also suffering from
some of the same malaise affecting most other markets. On
the positive side, they're not overbuilt on Public-Premium golf
(which is good considering the predominately blue-collar population
base of "working folks") and their factories are generating
a reasonable amount of rounds within their weather-constrained
season. On the flip side, it appears that there's a glut
of courses in the Public-Value segment which is likely leading
to significant discounting, and the relative lack of Public-Price
golf may be a barrier to easily expanding the golfer base. The
supply "overhang" from the 1990s doesn't appear to be overwhelming
but, unless they figure out how to light a fire under
golfers to increase their frequency, growth and/or real profit will
likely be elusive. Population growth is what it is so, were I a local
Cleveland golf operator, I'd be figuring out creative ways to
connect with the existing population because they're not coming
"ten-on-a-mule" to Lake Erie's southern shores. All in all,
not a bad golf market if, like in many others, you have money,
patience and basic skills and a desire to practice fundamental
facility marketing. No problem.
You'll find a map and list of courses already hosting FootGolf,
and a video and information about the game, and a lot more.
So what's the vote, fad or phenomenon? For now it's the latter.
Time will tell if it becomes the former. But I'm hanging on
to the website URL I bought last year after first speaking with
Roberto and Laura: FootGolfnow.com.
(Golf Publications continues from page 9)
of cases, he was right at the time, or was proven correct when the
accuracy of his analyses became too obvious to ignore or sweep
under the rug. Again, good information, even if it's not what you
were hoping to hear, enables good businesspeople to make the
best of a less than ideal situation going forward.
We are hoping to upgrade our online presence in the near future
to better serve and inform our readership. To date, we have
benefitted tremendously from the support of forward-thinking
companies such as our current sponsors, Troon Golf, KemperSports,
Bayer CropScience and EZLinks, all recognized industry
thought leaders, as well as others along the way including Club
Car, GolfSwitch, Sequoia Golf, 1-2-1 Marketing and even one
of our most frequent foils, GolfNow. We are very grateful to all
for helping us muddle through for our first five years, and invite
others to join us for the next five.
The Pellucid PersPecTive
Table of Contents for the Digital Edition of The Pellucid Perspective - August 2014
Dick’s golf dilemma: Industry barometer or self-inflicted wound?
Where have all the handicaps gone?
FootGolf – fad or phenomenon
Five years and counting
Court supervision ordered for Spokane CC
Cincinnati muni courses win round 2 of complaint opposing tax-exempt status
July golf weather impact: Up (marginally), winning streak extends to 5
Development restraint keeps Cleveland afloat
Dick’s Sporting Goods lays off 500 PGA professional staffers
America’s laziest sport’? We beg to differ
The Pellucid Perspective - August 2014