The Pellucid Perspective - January 2016 - (Page 2)
Golf industry
score sheet
2015 industry tale of the tape:
What will the numbers tell us?
By Jim Koppenhaver
W
ith the 2015 season now officially behind us, I'm in the
midst of compiling the figures and creating the storyline for the quantitative performance of the industry in
preparation for the 13th annual State of the Industry discussion
for the upcoming PGA Show in Orlando. While I'm not going to give away the storyline (we want you to register to either
attend or watch the live webcast; click here to learn how), I
thought I would provide a preview of what the various measures
will tell us across the key indicators that we track with either
December's results in (weather) or with enough months' history that December won't make any material difference (rounds,
revenue, equipment sales).
Starting with the most important variable, revenue (last I
checked nobody took rounds to the bank), it appears that we'll
finish '15 in the black on both the Total Facility Revenue and,
to a lesser extent, the Golf Fee Revenue line according to the
PGA's November PerformanceTrak figures. It appears that Total Revenue Rate will advance slightly but Golf Fee Revenue
Rate will decline modestly. What's driving that is we're seeing the Total Revenue growth being driven more by the ancillary departments of Food & Beverage and Merchandise, which
would mean that in 2015 we convinced more golfers to "linger
longer" and drop more money off-course than previous years.
I'm personally suspicious of that reality given the work we do
with our client courses, particularly in F&B, but being analysts
we're inclined to trust figures vs. intuition until those figures are
proven wrong.
Moving next to rounds demand, we'll finish '15 in positive
territory, which will break a two-year "losing streak" for the industry at the national level and takes us back to '12 when we
had abnormally favorable weather which drove our last gain.
Following that theme, you'll see in the Weather Impact and Bythe-Numbers sections of this issue that we once again saw that
pattern in '15 as we had very favorable weather vs. '14 and just
a barnburner of a 4th quarter up in the northern geographies,
many of which didn't close their doors/courses until mid-December this past year. In the midst of this good news, we're
obligated to point out that Utilization for the year in '15 will be
off slightly, meaning the lift we got in rounds can be completely
attributed to weather at the national level. (Several markets did
achieve Utilization gains, however, and we'll highlight those in
the State of the Industry presentation. The other good news is
that several of them are in the top 5 of our Top 25 Markets
Scorecard Ranking).
Turning to Supply levels and the ongoing absorption challenge from the "Build a Course a Day" era facilitated so ably by
our friends in Jupiter, FL, we will see a slight acceleration in the
take-out rate vs. recent years, but we continue to track against a
stabilization target for supply/demand balance sometime after
2020. It's somewhat ironic that the initial Golf 20/20 conference was setting that year as a major milestone for doubling
participation to 55M golfers and rounds demand to 1B annually and it turns out that the most likely benchmark for that
date target will be the industry clawing its way back to the supply/demand balance of 1990. Sometimes you just can't make
this stuff up...
Turning to the topic of the golf consumer base ("it's all about
that base, 'bout that base, no TV....), our information shows that
for the most recent year tracked ('14, the golf consumer surveys
are fielded in the 1st quarter of the following year so we're just
now fielding the results for '15), we once again saw meaningful
erosion in the consumer base. Not surprisingly, we differ from
the industry associations' assessment of the health of the golfer
base as NGF asserts that participation has "stabilized around
25M annual participants for the past 3 years." While on that
topic, we'll also take a look in the State of the Industry at how
the projections of the PGA's Golf 2.0, the NGF and Pellucid
fared as each of us gazed into our crystal balls back in 2010
and attempted to forecast where the golfer base would be by
2020. Spoiler alert, it's one that the PGA and NGF likely don't
want to be reminded of, plotting the '14 count of golfers vs. the
interim 2014 golfer base targets for each prognosticator. We'll
outline a theme in this year's assessment of the consumer base
of "Close the back door, energize the core," outlining why reten-
starting with the most important variable, revenue (last i
checked nobody took rounds to the bank), it appears that we'll
finish '15 in the black on both the total facility revenue and,
to a lesser extent, the Golf fee revenue line according to the
PGA's november Performancetrak figures.
2 The Pellucid PersPecTive
January 2016
http://www.pellucidcorp.com/event-registration
Table of Contents for the Digital Edition of The Pellucid Perspective - January 2016
TOC
2015 industry tale of the tape: What will the numbers tell us?
Uneven lies in search of a level playing field
Courses denied tax deduction for conservation easements
One-year anniversary of revolutionary course management technology product
December golf weather impact: Near-record for much of Northern US!
Chicago: Bull-ish on supply, Bear-ish on demand
Braving the third party tee time wilderness
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