The Pellucid Perspective - September 2017 - 14

MARKET FOCUS

across each of the markets driven by the local market price spectrum, so the absolute price of golf isn't necessarily revealed by a
balanced distribution. (For reference, the Public-Value segment
is defined as $52-$75 for this market).
During the "go-go" years of supply development (1990-2000),
the Miami CBSA didn't participate in the "build a course a day"
craze, increasing supply at an annual rate of <1% (compared to
the (unreasonable) US average of ~2%). During the 1980-1990
period however, their annual rate was >3% so they actually just
overbuilt before it was fashionable. Working in their favor was
above average annual population growth (>2%, double the na-

14 The Pellucid PersPecTive

tional rate of ~1% annually during that period). Using our pre2000 calculation for supply dilution/absorption (supply change
vs. population change) we estimate that the market was ~10% "to
the good" at the turn of the century vs. the 1990 benchmark (not
bad compared to the US average of 11% overhang). Since 2000,
the annual rate of supply growth has throttled back to <0.5%
while the population growth rate has remained healthy but not
quite as robust as pre-2000 (~1%). A better available metric
however for supply dilution/absorption in the post-2000 period
(because we have semi-accurate facility-reported rounds figures
at state and market level) is comparing supply growth to the
changes in rounds demand. Since 2000,
the market has experienced declining
annual rounds results (on par with the
national average of -1% annually) so
we're actually showing a supply dilution situation emerging during the '00'13 period. Combining the 1990-2000
decade absorption rate (+14%) and the
2000-2013 period results (-18%), the
average facility in the market shouldn't
be much worse off than they were in the
1990 benchmark (a much more favorable picture than the national rate of
-33% supply dilution for that same '90'13 period). Miami's benefit compared
to many of the other markets we've
studied is they didn't bring supply dilution overhang to the party pre-2000 but
they suffer from the same malady since
2000: the inability to generate rounds
demand increases which means any net
new supply is bad news.
The average facility throughput of
roughly 30K rds/yr is below the national
average before factoring in climate and
daylight influences. The more accurate measure is the market's 38% Utilization Rate which is also well short of
the Top 25 US Golf Markets' average
(56%). This means that, after factoring
in the benefit of a 12-month season, the
market's average golf "factory" runs at a
lower throughput vs. its Top 25 US Golf
Markets peer group. On the annual
Golf Fees Revenue productivity side,
the market generates just over $1.6M
per public regulation-length EHE
which is well above 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 $22, also
above the Top 25 Markets' average of
$19. (Remember however that all the
September 2017

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