The Pellucid Perspective - May 2017 - 13

ter available metric for supply dilution/absorption however in the
post-2000 period is comparing supply growth to the changes in
rounds demand tracking (rather than population growth, which
tends to always increase, just at different rates). San Francisco has
managed to not suffer rounds declines (compared to the national
average of 1%/yr decline) since 2000 so we're actually showing
them "treading water" in supply balance for the '00-'13 period.
Combining the 1990-2000 decade (-3%) and the 2000-2013 period results (0%), the average facility in the San Francisco CBSA
should be in only modestly worse supply equilibrium shape today
than in 1990 (chosen semi-arbitrarily by Pellucid as a period of
economic health for the majority of US golf facilities).
The average facility has throughput
of just over 37K rds/yr, above the national average before factoring in climate and daylight influences. The more
accurate measure is the market's 46%
Utilization Rate which significantly lags
the Top 25 US Golf Markets average
(56%). This means that, after neutralizing the weather impact of a 12-month
season, the market's average golf "factory" runs at a lower throughput than
its Top 25 US Golf Markets peer group.
On the revenue productivity side, the
market generates roughly $2.1M per
public regulation-length EHE which
is meaningfully above the Top 25 Markets average (not surprising given the
high cost-of-living mentioned earlier
here). After factoring that for weather
influence, the market's Greens Fee Revenue per Available Round (RevpAR =
Greens Fee Revenue/Available (Capacity) Rounds) registers at $26, once again
beating by a healthy margin the Top 25
Markets' average of $19. As a final new
measure for the Top 25, the Golf Fee
Profit-per-Available Round estimate
(designed to equalize the equation when
comparing high cost-of-living markets
to more reasonable ones) is $8, relatively
similar to the national average of $9. In
other words, after weather adjustment
and factoring out maintenance cost differentials, it appears that they're making
about average "bank" compared to the
Top 25 Markets peer group using all
our incorporated assumptions and estimations. For more detail on what this
means and how that's calculated, Jim's
article in the October '14 Perspective
edition explains it (or send us an email
at jimk@pellucidcorp.com and we'll fill
in the blanks).
In summary, we see positives in the
golfer base, supply distribution and
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supply/demand balance. On the other hand, the below average
throughput (Utilization) is a caution but, despite that, they're
posting at least average results for Profit-per-Available-Round so
somewhere that deficit is being offset. From the golfer's perspective, there could probably be more supply available (but they're
not necessarily "maxing out" the supply they have) but the operators probably like it the way it is just fine. Short of shooting
themselves in the foot by launching "discount wars" in trying to
vie for golfers' attention, rounds and dollars, it would seem that
San Francisco currently isn't a bad place to operate a facility in the
absolute and, relative to the rest of the golf economy, it's probably
a significantly better place to be today than most others.
n

The Pellucid PersPecTive

13
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Table of Contents for the Digital Edition of The Pellucid Perspective - May 2017
